Arvada Municipal Code imposes a sales tax on the price paid for some goods and services sold in the City. This includes a tax on anything sold from sources outside the City on which sales tax was not paid.
Owners and managers of facilities in the City, must get a Business License and pay Arvada sales tax on items used in their facilities. If Arvada sales tax is not paid at the time of sale, then a use tax must be paid to the City. Sales or use taxes paid to other municipalities will be credited toward Arvada taxes. Such credit may not exceed the Arvada use tax due.
Materials used in minor repair work (not requiring a building permit) are subject to sales and use tax. Labor, if billed separately, is not subject to sales and use tax. Property like finished units, appliances, water heaters, carpets, etc., are subject to sales and use tax.
For-Profit Nursing Home
For purposes of this guide, a for-profit nursing home includes:
- skilled nursing facilities
- intermediate care facilities
- assisted-living facilities
- nursing facilities
- home health agencies
- hospice facilities
- adult day services
- respite care facilities
Buying an Existing Assisted Living Facility
When a business purchases an existing facility, tax is due on everything included in the transaction. This is true even when the sale is a lump-sum transaction. The amount taxed is the price recorded in the bill of sale or agreement, as long as the price is greater than or equal to the fair market value at the time of sale. The City uses the best information available to find the tax due on property like appliances furniture, and window coverings. Sometimes, past taxes or an independent appraisal is required.
Rent payments or charges are not subject to City sales or accommodations tax if the contract is for a period of at least 30 consecutive days. City sales tax applies to personal property like vending machine sales, and furniture or equipment rental.
Meals and Beverages
Facilities serving meals and beverages only to regular residents and not to the public should pay tax on the cost of the food purchased. If the facility is an exempt organization and sells meals to employees or family members, sales tax should be collected on those sales.
- Arvada Assisted Living buys new washers and dryers for the laundry room from an online retailer. The units arrive at the facility in Arvada. They hire an Arvada plumber to remove the old units and install the new units. Arvada Assisted Living pays $2,500.00 for the units plus freight of $300.00. The plumber charges $500 for labor and $85 plus tax for miscellaneous hoses, clamps and PVC extensions. The online retailer did not charge any sales tax for the new washer and dryer units. Use tax is due from the Arvada Assisted Living to the City on both the $2,500.00 sale price and the $300.00 freight charges. The plumber separated parts and labor, and charged City sales tax on the parts he used. There is no tax due on the amount paid to the plumber.
- Arvada Assisted Living buys the food and ingredients for their meals from Good Food Distributors. Good Food Distributors is not collecting sales tax on anything sold to the facility. The facility will need to pay use tax on all items purchased from Good Food Distributors.
- The Breezy Retirement Home is an assisted living complex was recently sold to a new owner. The complex consisted of 70 apartments and sold for $800,000.00. The complex consisted of 70 apartments and sold for $800,000.00. The sales contract did not list any separate charges for personal property. Appliances (refrigerators, microwaves, and more) were present in each apartment unit. There were also washers and dryers in the on-site laundry room, furniture and games in the clubhouse, and office equipment in the main office. Those items are all subject to use tax, even though they were not listed on the sales contract.
*THIS INFORMATION IS A SUMMARY IN LAYMAN'S TERMS OF THE RELEVANT ARVADA TAX LAW FOR THIS SUBJECT, INDUSTRY OR BUSINESS SEGMENT. IT IS NOT INTENDED FOR LEGAL PURPOSES TO BE SUBSTITUTED FOR THE FULL TEXT OF THE ARVADA MUNICIPAL CODE. HOWEVER, THE TAX GUIDE SHALL BE USED IN CONJUNCTION WITH THE ARVADA MUNICIPAL CODE (CHAPTER 98) IN DETERMINING TAX LIABILITY.
- by Finance