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Colorado · 2026 · 38 steps · official links

How to start a business in Colorado

Every step to open an LLC in Colorado and get ready to hire, in order, with the official state page for each one. Agencies you'll deal with: Secretary of State · Department of Revenue · CDLE (Unemployment Insurance, Labor Standards, Workers' Compensation) · FAMLI Division · Colorado SecureSavings · Colorado Medical Board.

LLC filing fee
$50
State sales tax
2.9%
Seller's permit
$16 per location
Out-of-state sales threshold
$100,000
Last verified
October 27, 2026

This is the most common path: a new LLC, general business, paying W-2 employees and 1099 contractors. Adding a location, forming a corporation, or in a licensed industry? Customize it and check off steps as you go.

Customize this checklist

Popular Colorado business types:

Step 1

Set up the business with the state

Do this first. The state tax and payroll accounts ask for your registration details.

Get a federal EIN

Apply free on the IRS website and get the number immediately. You'll need it for the state tax registration, a business bank account, and payroll. Opening a new location? You already have one; the same EIN works in every state.

FederalFreeIRS: Get an EIN

Sign an operating agreement

This internal document sets out who owns what, how decisions get made, and what happens if an owner leaves. It isn't filed with the state, but banks often ask for it, and it helps protect your liability shield. Single-owner LLCs need one too.

Every state

Open a business bank account

Bring your EIN letter, filed formation documents, and operating agreement or bylaws. Keeping business and personal money separate is one of the main things that protects your personal assets.

Every state

Check industry licenses and permits

Many businesses need a license or permit before opening, separate from registering the company. Check three levels: the state licensing board for your field, your city or county, and any federal agency that regulates your industry.

  • Trades and construction: general contractors, electricians, plumbers, HVAC and roofers usually need a state or local license, and often a bond
  • Personal services: salons, barbers, nail and esthetics shops need a shop license plus licensed staff; massage and tattoo studios are licensed too
  • Professional services: accounting, engineering, architecture, law, real estate and insurance require state licenses for the people and sometimes the firm
  • Child care, elder care and home care need a state facility or agency license and background checks
  • Retail with restricted products: alcohol, tobacco and vape, cannabis, firearms (federal FFL), pawn and secondhand dealers
  • Auto, transport and logistics: auto dealers and repair shops, towing, movers, and trucks that need a USDOT number
  • Money and finance: lenders, mortgage brokers, debt collectors and money transmitters are licensed by the state, often through NMLS
  • Local permits for almost everyone: city business license or tax registration, zoning or home occupation permit, sign permit and fire inspection

Decide on S corp tax treatment (optional)

If you want S corp taxation, file IRS Form 2553. The deadline is tight: generally within 2 months and 15 days after the start of the tax year you want it to apply. See Business basics for when it makes sense.

Form your LLC with the state

File Articles of Organization (or the state's equivalent) online through Secretary of State online filing (sos.state.co.us/biz).

Name a Colorado registered agent

You need a registered agent with a street address in Colorado to receive legal papers and state notices. Use a registered agent service if you have no one local.

CO

Register a trade name (DBA) if you use a different name

Trade names are filed with the Secretary of State online, not with counties.

COIf it applies$20

Know Colorado's formation rules

Formation documents are filed online with the Secretary of State. Out-of-state entities file a Statement of Foreign Entity Authority.

CO
Step 2

Register for state taxes

Register with Department of Revenue

In-state businesses register for a wage withholding account and a sales tax license together through MyBizColorado. Out-of-state businesses use Revenue Online, and paper Form CR0100 is also accepted.

  • Employees complete Form Federal W-4 (Colorado form DR 0004 is optional for employees) for state withholding
  • Colorado has a state sales tax plus local sales taxes. Some home-rule cities run their own sales tax licensing and collection.

Check local taxes and business licenses

Denver, Aurora, Glendale, Greenwood Village and Sheridan charge occupational privilege taxes (monthly per-employee head taxes). Home-rule cities may require their own business or sales tax licenses.

CO
Step 5

Collect sales tax

Applies if you sell products, or services this state taxes. Most medical care is exempt. See Business basics for sales tax.

Register to collect sales tax

Colorado calls it a Colorado Sales Tax License (Standard Retail License). Register with the Colorado Department of Revenue through MyBizColorado (or paper Form CR 0100) before you make your first taxable sale in Colorado. You'll collect tax from customers and send it to the state.

  • State rate: 2.9%
  • Local taxes: Cities, counties and special districts add local taxes, and the state collects many of them on its return. Some home-rule cities run their own sales tax and license, filed separately with the city or through SUTS, the Sales and Use Tax System portal.
  • Renews every two years; the current period began January 1, 2026, and renewal costs $16 per location
  • Colorado generally does not tax services, except items like prepared food, short-term lodging, and some utilities.
CO$16 per location if you apply January to June of an even year, dropping to $12, $8 or $4 later in the two-year cycle; plus a one-time $50 deposit for the first location, refunded after you remit $50 in state sales taxColorado: Register for sales tax

Buy items you resell tax-free with a resale certificate

Give your supplier DR 5002, Declaration of Wholesale or Entity Sales Tax Exemption (replaced DR 0563, which Colorado eliminated); the MTC Uniform Resale Certificate is also accepted so you don't pay tax on inventory you'll resell. Sellers must check that the buyer's license or certificate is current and valid at the time of sale; the MTC form is accepted only for state-administered taxes, not by self-collecting home-rule cities. Keep certificates your own customers give you, too.

  • Accepts the MTC Uniform Sales and Use Tax Resale Certificate
COIf it applies

Selling into Colorado from another state? Watch the threshold

Out-of-state sellers must register once sales into Colorado pass $100,000 (current or previous calendar year), even with no office here.

  • Counts retail sales of goods and services into Colorado. If you cross $100,000 mid-year, you must start collecting by the first day of the month that begins at least 90 days later.
  • Since October 1, 2019, marketplace facilitators collect state sales tax for their sellers, so marketplace-only sellers do not collect state tax on those sales.

Note this Colorado sales tax rule

Home-rule cities can have different rules, rates and licenses, so check each city where you sell.

CO
Step 6

Before your first payroll

Applies once you pay W-2 employees who work in this state.

Complete Form I-9 and W-4 for each hire

Form I-9 is never mailed to the government. You keep it in your own files and show it only if ICE or the Department of Labor asks for an inspection.

  • The employee completes Section 1 by their first day of work
  • You review their original documents and complete Section 2 within 3 business days of the start date
  • Keep it for 3 years after the hire date or 1 year after employment ends, whichever is later
  • Store I-9s together, separate from personnel files, so an inspection doesn't expose other records
  • Remote hire? Have an authorized representative check documents in person, or, if you use E-Verify, use the DHS remote video inspection option
  • Also collect a federal W-4 for withholding

Post federal workplace notices

Federal posters (minimum wage, EEO, FMLA if you have 50+ employees, and others) go alongside the state ones.

Register for unemployment insurance with CDLE Division of Unemployment Insurance

Register once you pay wages to employees working in Colorado. Reports and payments are usually quarterly.

  • 2026 new employer rate: 3.05%
  • Taxable wage base: $30,600
  • The 3.05% new employer rate includes a 1.53% base rate, a 0.17% support rate and a 1.35% surcharge. After 2026 the wage base is indexed to wages. Wage reports and premiums are filed quarterly in MyUI Employer+.

Set up the state paid leave or disability program

Colorado FAMLI (paid family and medical leave). The 2026 premium is 0.88% of wages, split 50/50 between employer and employee. The rate drops to 0.86% on January 1, 2027.

  • Employers with fewer than 10 employees do not pay the employer half but must still collect and remit the employee half
  • Wage reports and premiums are due quarterly through My FAMLI+ Employer (Q3 2026 due October 31, 2026)
  • Employers cannot make workers use PTO or sick leave before or during FAMLI leave
  • Approved private plans are allowed

Buy workers' compensation insurance

Required at 1 or more employees (full- or part-time). Coverage is bought from private insurers such as Pinnacol Assurance. Exceptions include sole proprietors and partners, independent contractors, and some domestic and casual workers.

Report each new hire

Report online through the State Directory of New Hires. Electronic filers submit twice a month, 12 to 16 days apart. Independent contractors who give you an SSN should also be reported.

Check income tax reciprocity

None. Colorado has no income tax reciprocity agreements.

CO

Follow Colorado pay timing rules

Colorado's wage payment rules:

  • Pay frequency: At least monthly, with paydays posted.
  • Final pay: Due immediately if the employee is fired. Due by the next regular payday if the employee quits. Unused vacation must be paid out.
  • Overtime: 1.5x pay after 40 hours in a week or 12 hours in a day.
  • Colorado sets its own salary threshold for overtime-exempt jobs, which is higher than the federal one and changes every year.

Pay at least Colorado minimum wage

$15.16 an hour.

  • Tipped employees: $12.14 (tip credit of $3.02)
  • Local rates: 2026: Denver $19.29, Edgewater $18.17, City of Boulder $16.82, unincorporated Boulder County $16.82.
  • Coming up: $15.71 statewide ($12.69 tipped) on Jan 1, 2027. Local 2027 rates: Denver $19.84 ($16.82 tipped), Edgewater $19.84, City of Boulder $18.17, unincorporated Boulder County $17.43.

Set up required sick leave

The Healthy Families and Workplaces Act covers all employers of any size and all employees, including part-time and temporary staff. Workers earn 1 hour per 30 hours worked, up to 48 hours a year, starting day one.

  • Up to 48 unused hours carry over, but you only have to allow 48 hours of use per year
  • Exempt employees accrue as if they work 40 hours a week
  • Allowed uses include grieving and handling affairs after a family member's death
  • An extra 80 hours applies only during a declared public health emergency
  • Give written notice and post the HFWA poster; translate it for languages spoken by 5% or more of staff

Register for Colorado SecureSavings or certify an exemption

Employers with 5 or more employees, in business at least 2 years and with no qualified retirement plan, must register and offer the state auto-IRA or certify an exemption. The penalty is up to $100 per eligible employee per year, capped at $5,000.

CO

Adopt a harassment policy (training recommended)

Colorado doesn't require harassment training for private employers. A written policy and a yearly refresher are still best practice.

COIf it applies

Post Colorado workplace notices

Display the state's required labor law posters where employees can see them, along with the federal posters. Workers' comp notices come from your carrier.

Update payroll for January 2027

On January 1, 2027, the statewide minimum wage rises to $15.71, local minimums rise, and the FAMLI premium drops to 0.86%. Update payroll before your first 2027 pay run.

  • Statewide $15.71 ($12.69 tipped)
  • Denver $19.84
  • FAMLI 0.86% of wages

Register with FAMLI even if you are small

Every employer must register and file quarterly FAMLI wage reports. Employers with fewer than 10 employees still remit the employee half of the premium.

Step 7

Paying 1099 contractors

Collect a W-9 before the first payment

The W-9 gives you the contractor's legal name and tax ID for their 1099. Check the classification first: if you control how and when they work, they may legally be an employee.

Send Form 1099-NEC to contractors

File with the IRS and send the contractor a copy by January 31. For payments made in 2026 and later, the reporting threshold is $2,000 per contractor per year (it was $600 before).

FederalDue Jan 31
Step 8

Stay in good standing

Recurring deadlines. Put these on your calendar now.

Skip the FinCEN BOI report (U.S. companies are exempt)

FinCEN's final rule, effective August 14, 2026, permanently exempts companies formed in the U.S. from beneficial ownership reporting. Ignore letters or emails demanding a BOI filing fee; they're a common scam. Only companies formed outside the U.S. still file.

Keep personnel records 5 years

The POWR Act requires keeping personnel records and harassment or discrimination complaints for 5 years, in a designated repository.

CO

File the Periodic Report

Keeps your business in good standing with the state. Missing it can lead to penalties or dissolution.

COEvery year. You can file starting 2 months before your anniversary month; it is due by the end of the second month after it. A $50 late fee applies after that.$25Colorado: Annual report

Know your state business taxes

Colorado has no franchise tax. If the report stays unfiled the entity goes delinquent, and curing it costs $100.

CO

File quarterly unemployment reports and withholding returns

File unemployment wage reports each quarter and state withholding returns on the schedule you're assigned (if the state has income tax), plus the annual W-2 reconciliation.

COQuarterly

File sales tax returns on time

Monthly if you collect $1,100 or more per month, quarterly if less, and annually if $50 or less per month; returns are due the 20th. File a zero return if you had no sales; skipping it can bring penalties.

CO

Deadline calendar

Recurring dates for Colorado and federal filings. A payroll service handles most payroll lines, but you should know they're happening.

WhenWhatFiled with
Jan 1New minimum wages and FAMLI premium rate take effectColorado
Jan 31, Apr 30, Jul 31, Oct 31Quarterly UI wage reports and premiums due (MyUI Employer+)Colorado
Jan 31, Apr 30, Jul 31, Oct 31Quarterly FAMLI wage reports and premiums due (My FAMLI+ Employer)Colorado
End of 2nd month after anniversary monthSecretary of State Periodic Report due ($25)Colorado
End of yearGive employees updated HFWA notices and postersColorado
Assigned scheduleSales tax return (file a zero return if no sales)Colorado
Jan 31W-2s to employees and SSA (with W-3); Form 940; 4th-quarter Form 941IRS / SSA
Jan 311099-NEC to contractors and IRSIRS
15th monthlyFederal payroll tax deposit (monthly depositors)IRS
Apr 30 · Jul 31 · Oct 31Form 941 for the quarterIRS
Jul 31Form 5500 or 5500-SF, if you sponsor a 401(k) (Oct 15 with Form 5558 extension)DOL (EFAST2)

Last verified: October 27, 2026

Common questions

How much does it cost to form an LLC in Colorado?

The Colorado state filing fee for an LLC is $50. That's the fee to form your LLC with the state. Expect other costs too, such as a registered agent service if you use one, licenses, and annual filings. See the checklist above for each step.

Do I need a seller's permit in Colorado?

You need to register to collect sales tax in Colorado if you sell taxable products or services there. The state rate is 2.9%, and local taxes may add to it. Registration cost: $16 per location.

When does an out-of-state business have to collect Colorado sales tax?

Out-of-state sellers must register once their sales into Colorado pass $100,000 a year. Having an employee or office in Colorado also creates nexus right away.

What does a Colorado business have to file after it opens?

Recurring filings include: file the Periodic Report; file quarterly unemployment reports and withholding returns; file sales tax returns on time. The deadline calendar above lists the dates.

Checklists for every state

This guide organizes official requirements. It isn't legal or tax advice. Fees, forms, and deadlines change, so confirm on each linked state page before you file, and talk to an attorney or CPA about your specific situation.