Hot Sulphur Springs Building Materials Use Tax

Hot Sulphur Springs already charges its 4% sales tax on construction and building materials sold in town. This question adds a 4% use tax on materials bought at retail anywhere else and used or consumed in town. In Ordinance No. 2026-08-20-430, the Board of Trustees found that the tax would benefit the town by reclaiming revenue now paid to other jurisdictions through their sales taxes. On April 16, 2026, the trustees ended a moratorium on new water and sewer taps everywhere but one neighborhood; the town clerk told Sky-Hi News that moratoriums on new taps had been in place since 2021.

The contractor, the property owner or lessor, and the lessee are liable for the tax. Materials whose sale is subject to the town's sales tax are exempt. Sales or use tax that another town, city or city and county legally imposes counts as a credit, up to the town's 4%. Materials used in structures and public works owned and used by governments in their governmental capacities, charities carrying out their regular charitable activities, and qualifying educational institutions are exempt. The school exemption requires a comparable grade-school-through-college curriculum, daily attendance, at least 40 students and tuition, and excludes institutions run for private or corporate profit. The renewable-energy exemption covers components producing alternating-current electricity, but excludes components beyond the production-site generator step-up transformer, labor, energy-storage devices and remote monitoring systems. State-law exemptions allowed on January 1, 2026 also apply.

A builder who receives a building or other town permit pays a use tax deposit before the permit issues, unless the clerk approves monthly returns instead. The deposit is 4% of half the project's total valuation, as the town determines it. The town may audit the actual materials costs within three years after the certificate of occupancy; a taxpayer-requested audit is at the taxpayer's sole cost. An audited shortfall, with applicable interest and penalties, is payable immediately upon the town's final determination with notice to the taxpayer. An audited overpayment must be refunded within 30 days. For ordinary deposit reconciliation, the town may determine a shortfall or excess within 36 months after the certificate of occupancy or final inspection, with payment or refund due within 30 days of that determination. A deposit payer must separately apply for a refund within 36 months after the certificate of occupancy or the purchase, whichever comes sooner; refunds also face that cutoff unless a written request to the town tolls the limitation period. A builder who paid the town's sales tax to licensed town retailers may apply with invoices within 60 days of that determination for a credit or refund. Ordinary delinquency carries the greater of $15 or 15% of the amount due, plus 1.5% monthly interest. Fraud with intent to evade the tax adds a penalty of 100% of the deficiency; the unpaid tax and additions are due ten days after written notice and demand, with an additional 3% a month on that amount until paid. A taxpayer may seek reasonable-cause relief at a hearing, and the clerk may waive penalties or interest for good cause. The clerk may waive penalty or interest for good cause, and a taxpayer may seek relief from an estimate or penalty for reasonable cause at a hearing. Unpaid tax, penalties and interest constitute a lien on the benefited property.

The question puts the increase at $200,000 in the first full fiscal year, beginning January 1, 2027, and whatever the tax raises in later years. The trustees may spend it for any municipal purpose. The tax has no end date, and the town keeps all the revenue and its earnings outside the revenue limits of the Taxpayer's Bill of Rights (TABOR) or any other law. Town voters decide it on November 3, 2026.