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Sales tax on labor in Colorado: not taxed on building repairs and new construction; repairs to things and installation depend on the job
In Colorado, labor is not taxed on building repairs and new construction; for repairs to things and installation it depends on the job. The sales taxes of its home-rule cities were not checked here. Read from Colorado's own revenue pages, checked November 6, 2026, with every answer quoted below.
The tax in Colorado
How the tax works in Colorado: The state's guidance below does not apply to the sales or use taxes of home-rule cities, which the state does not administer.
- “The information in this publication does not apply to the sales or use taxes of any home-rule cities that the Department does not administer.” — Sales & Use Tax Topics: Auto Repairs (Colorado Department of Revenue), page date: May 2026
Repairing a thing in Colorado
It depends. On a repair of a thing, the parts are taxed; the labor is not, as long as it is a separate line on the invoice. What it turns on: labor separately stated (and separable) on the invoice.
- “The taxable amount is the total charge made to the customer for the parts and accessories, minus any separately stated service or labor charges.” — Sales & Use Tax Topics: Auto Repairs (Colorado Department of Revenue), page date: May 2026
Repairing a home or building in Colorado
Not taxed. Repair of a building is contractor work. On a lump-sum job you pay tax when buying the building materials and do not charge sales tax on the job. On a time-and-materials job you charge sales tax on the marked-up materials, but not on labor listed separately.
- “For lump-sum contracts, the contractor is treated as the consumer of all construction and building materials included in and associated with the contract.” — FYI Sales 6: Contractors and Retailer-Contractors (Colorado Department of Revenue), page date: 03/20
- “A retailer-contractor should not collect tax on installation or labor charges if such charges are listed separately on the bid proposal, sales invoice, or contract.” — FYI Sales 6: Contractors and Retailer-Contractors (Colorado Department of Revenue), page date: 03/20
- “anyone engaged, under a contractual arrangement, in the construction, reconstruction, or repair of any building, bridge or structure” — FYI Sales 6: Contractors and Retailer-Contractors (Colorado Department of Revenue), page date: 03/20
Installation work in Colorado
It depends. Installation charges are untaxed only if the customer could decline them and they appear as their own line on the invoice. If item and installation are lumped together, the whole price is taxed. What it turns on: installation separable and separately stated.
- “An associated service charge is separately stated if it appears as a distinct line item on a written sales contract, retailer's invoice, or other written document issued in connection with the sale.” — Sales Tax Guide (Colorado Department of Revenue), page date: May 2026
- “Service charges associated with the sale of tangible personal property, such as charges for installation or delivery, are generally included in the taxable purchase price, unless two conditions are met.” — Sales Tax Guide (Colorado Department of Revenue), page date: May 2026
- “A retailer-contractor should not collect tax on installation or labor charges if such charges are listed separately on the bid proposal, sales invoice, or contract.” — FYI Sales 6: Contractors and Retailer-Contractors (Colorado Department of Revenue), page date: 03/20
New construction in Colorado
Not taxed. Lump-sum building contracts: the contractor is the consumer of the materials and pays the tax on them; no sales tax license needed. Time-and-materials: contractor collects tax on the materials, not on separately listed labor.
- “For lump-sum contracts, the contractor is treated as the consumer of all construction and building materials included in and associated with the contract.” — FYI Sales 6: Contractors and Retailer-Contractors (Colorado Department of Revenue), page date: 03/20
- “A retailer-contractor should not collect tax on installation or labor charges if such charges are listed separately on the bid proposal, sales invoice, or contract.” — FYI Sales 6: Contractors and Retailer-Contractors (Colorado Department of Revenue), page date: 03/20
Listing labor separately on the bill in Colorado
Changes the answer.
- “An associated service charge is separately stated if it appears as a distinct line item on a written sales contract, retailer's invoice, or other written document issued in connection with the sale.” — Sales Tax Guide (Colorado Department of Revenue), page date: May 2026
- “Service charges associated with the sale of tangible personal property, such as charges for installation or delivery, are generally included in the taxable purchase price, unless two conditions are met.” — Sales Tax Guide (Colorado Department of Revenue), page date: May 2026
Materials on jobs in Colorado
Lump-sum contract: contractor is the consumer and pays tax on materials. Time-and-materials contract: contractor is the retailer of materials and collects tax on their marked-up price.
- “For lump-sum contracts, the contractor is treated as the consumer of all construction and building materials included in and associated with the contract.” — FYI Sales 6: Contractors and Retailer-Contractors (Colorado Department of Revenue), page date: 03/20
Trade services Colorado taxes
Not checked here. No official Colorado list of taxed trade services was found.
What was not checked for Colorado
- No general Colorado publication on repair labor was found: the answer for repairing a thing comes from the state's auto repair guidance and its rule on separately stated charges.
Check with the Colorado Department of Revenue
Before you bill: check with the Colorado Department of Revenue. As of November 6, 2026.
Worth knowing: Colorado's own guidance does not apply to the sales taxes of its home-rule cities, as the publication quoted here says. Those were not checked here.
This is a plain-words summary of each state's own revenue guidance as of November 6, 2026, not tax advice. Rules have exceptions, and cities and counties can add taxes of their own. Check with the state's tax department, linked on every state's page, before you bill.
Compare Colorado with every state's answer, or with its neighbours just below.
Next door to Colorado
- Kansas: home repair depends, installation depends
- Nebraska: home repair not taxed, installation depends
- New Mexico: gross receipts tax; home repair taxed, installation taxed
- Oklahoma: home repair not taxed, installation depends
- Utah: home repair not taxed, installation depends
- Wyoming: home repair not taxed, installation depends
Official sources for Colorado
- Sales Tax Guide (Colorado Department of Revenue) — May 2026
- Sales & Use Tax Topics: Auto Repairs (Colorado Department of Revenue) — May 2026
- FYI Sales 6: Contractors and Retailer-Contractors (Colorado Department of Revenue) — 03/20
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