Effective May 12, 2023, the Sales Use Tax Exemption Wildfire Disaster Construction Act (HB23-1240) creates a refundable exemption for the sales and use tax paid for construction and building materials used directly in rebuilding or repairing a qualified homeowner's qualified residential structure due to a declared wildfire disaster between January 1, 2020, and December 31, 2022.
No retailer may exempt construction and building materials at the point of sale. The exemption is claimed solely as a refund by a qualified homeowner for each qualified residential structure for which a building permit and a wildfire rebuild exemption certificate are issued by a local government. The refund is equal to the state, regional transportation district, and science and cultural facilities district taxes, (a total of four percent), imposed on the estimated construction and building materials cost to rebuild or repair a qualified residential structure due to a declared wildfire disaster. The exemption does not apply to city, county, or other special district sales and use taxes.
See FAQ #6 below for detail on how to claim the exemption.
Frequently Asked Questions
It is a refund for the state, regional transportation district, and scientific and cultural facilities district taxes imposed on building materials to rebuild or repair a home damaged or lost in a declared wildfire disaster.
The State of Colorado, the regional transportation district, and the scientific and cultural facilities district impose sales and use taxes on the sale and use of most goods, including construction and building materials. Most contractors and subcontractors pay these sales taxes when they buy building materials. In some cases, they are reported to the state as a use tax.
NOTE: The state, regional transportation district, and scientific and cultural facilities district sales and use taxes are in addition to the municipal and county sales and use taxes. The municipal and county sales and use taxes are typically paid at permitting, not at the point of sale. The Department of Revenue will not issue refunds for municipal or county sales and use taxes; however, these local governments may have their own refund or exemption programs for wildfire disasters. Contact the applicable local government for more information.
No, your refund will not be less. By rule a qualified residential structure that is outside the regional transportation district, the scientific and cultural facilities district, or both, is still eligible for the four percent refund rate.
To qualify, you must meet the following criteria:
- You owned a home when it was destroyed or damaged in a declared wildfire disaster in 2020, 2021 or 2022 (see the list below);
- You are rebuilding or repairing that home, or you have hired a contractor to rebuild or repair that home; and
- The replacement/repair costs exceed your homeowner’s insurance coverage under any policy associated with the home.
The following disaster declarations qualify:
- D 2020 143: July 2020 - Elephant Butte, Jefferson County
- D 2020 171: July 2020 - Pine Gulch, Mesa and Garfield Counties
- D 2020 187: August 2020 - Grizzly Creek and Red Canyon, Garfield/Eagle Counties/I-70
- D 2020 197: August 2020 - Lewstone, Larimer County
- D 2020 204: August 2020 - East Fork, Las Animas County
- D 2020 208: August 2020 - Cameron Peak, Larimer County
- D 2020 233: September 2020 - Mullen, Jackson County
- D 2020 252: October 2020 - East Troublesome, Grand and Larimer Counties
- D 2020 253: October 2020 - Calwood, Boulder County
- D 2020 254: October 2020 - Lefthand, Boulder County
- D 2021 123: June 2021 - Muddy Slide, Routt County
- D 2022 004: December 2021 - Marshall Fire, Boulder
- D 2022 019: April 2022 - Bent’s Fort and Fort Lyons, Otero and Bent Counties
- D 2022 024: May 2022 - High Park, Teller County
- D 2022 025: May 2022 - Ute Pass, La Plata County
- D 2022 030: May 2022 - Menkhaven, Conejos County
Before filing a claim for refund, a qualified homeowner must first obtain a building permit from the local government with jurisdiction to issue the building permit for the residential structure(s). However, you do not need to obtain a new building permit if you were already issued one. If you no longer have a copy of a previously issued building permit, the local government can help you acquire one.
A few local government emails to submit your application to:
A qualified homeowner must complete and submit an Application for Wildfire Rebuild Exemption Certificate (form DR 0992) to the applicable local government for the Wildfire Rebuild Exemption Certificate. Upon receipt of a completed application from a homeowner, an authorized official from the applicable local government that has issued a building permit to the homeowner (or the homeowner’s contractor) for an area affected by a declared wildfire disaster will review the application and, if appropriate, issue a Wildfire Rebuild Exemption Certificate to the qualified homeowner.
Once a qualified homeowner receives a Wildfire Rebuild Exemption Certificate from the applicable local government, the qualified homeowner must complete section 6, entitled “Wildfire Refund Claim”, on the Wildfire Rebuild Exemption Certificate. That claim must be submitted to the Colorado Department of Revenue. Submission instructions are included on the Wildfire Rebuild Exemption Certificate. The Wildfire Refund Claim must be filed with the Colorado Department of Revenue no later than June 30, 2028.
Refund claims may be submitted as soon as the homeowner obtains the building permit and wildfire rebuild exemption certificate from the applicable local government and must be submitted no later than June 30, 2028.