Colorado Contractor Sales Tax 2026

Colorado sales tax rate for contractors

• Combined rate: 2.9% + local (~7.8% combined avg)
• Construction labor taxable: NO - real property labor is exempt
• Tax authority: Colorado Department of Revenue

How Colorado treats contractor labor

Real property labor exempt. 70+ home-rule cities administer their own tax separately from state.

Colorado-specific rules

Most complex sales tax structure in US. 70+ home-rule cities each administer their own tax. No statewide general contractor license, but most cities require one.

Colorado mechanics lien rights

Beyond sales tax, Colorado contractor billing must respect the mechanics lien deadline of 4 months from last work (2 months for residential). Preliminary notice: Notice of intent to file lien served 10 days before recording.

Colorado contractor licensing

No statewide GC license; municipal/county requirements apply (Denver, Boulder, Aurora, Colorado Springs). Board: https://dre.colorado.gov.

Automate Colorado sales tax with KaamCam

KaamCam applies the Colorado sales tax rate, labor tax treatment, and contractor license number to every invoice automatically. Stop tracking tax rules manually. $12 per seat per month. Start a free 14-day trial.

Colorado contractor resources by trade

• Colorado HVAC Cost
• Colorado Plumbing Cost
• Colorado Electrical Cost
• Colorado Roofing Cost
• Colorado Painting Cost
• Colorado Concrete Cost