BOULDER — City of Boulder officials said Monday they are suspending a controversial plan to collect delinquent construction use taxes.
The construction use tax, which has been part of the City Code for more than 25 years, recently came under scrutiny when audits uncovered discrepancies in the amount of taxes owed in the city for construction projects.
According to the city’s tax code, contractors pay an estimated tax based on the construction permit and then must reconcile the estimate with actual costs upon completion of the project. Traditionally, project estimates and actual costs have been similar, city officials said.
But the results this year were different, raising questions about errors in the system and the inequities among those companies that were audited and those that weren’t. About 1,000 contractors were to be notified to reconcile estimated construction values with actual project costs.
