Town of Avon 4% use tax on construction materials goes into effect January 1

The Town of Avon recently issued the following press release on its 4% use tax on construction materials going into effect January 1, 2025:

In the November election, Town of Avon voters passed a 4% use tax on construction materials. Like many other municipalities, this tax is assessed at the time the building permit is issued and when other fees are assigned. The tax will apply to projects which have a total building construction materials value of greater than $125,000. Projects with total building construction material valued at less than $125,000 are exempt from the tax.  

The taxable amount is calculated as 50% of the total valuation of the project, and total valuation is defined as the total value of materials and labor. For example, a project with a total valuation of $300,000 would pay a use tax of $6,000 (4% of $150,000). If at the end of the project the total cost of materials is proven to be less than the taxed amount, there will be a reconciliation process to recoup overpaid taxes. 

Upon permit issuance, the applicant will be provided with a certificate of payment of the use tax. The applicant can present this certificate to wherever they are purchasing materials from (regardless of municipality) and will not have to pay additional sales tax on those materials if the municipality’s sales tax is 4% or less. 

The use tax will go into effect on January 1, 2025 and will apply to any building permit issued after this date. For any questions, please reach out to Finance Director Paul Redmond at predmond@avon.org.