Business Overview
Colorado features a diverse economy with strengths in aerospace, technology, energy, and outdoor recreation industries. The state combines a highly educated workforce, strong innovation culture, and quality of life factors that make it attractive for both startups and established businesses seeking growth opportunities.
Key Facts & Figures
| Category | Details |
| Capital | Denver |
| Major Cities | Denver, Colorado Springs, Aurora, Fort Collins, Lakewood |
| State Sales Tax Rate | 2.90% |
| Local Sales Tax Rate | Up to 8% additional (varies by locality) |
| Corporate Income Tax | 8.84% flat rate (plus $800 minimum franchise tax) |
| Physical Nexus Threshold | Physical presence including property, employees, or in-state representatives |
| Economic Nexus Threshold | $100,000 in annual sales |
Did you know?
Colorado has the highest concentration of aerospace and defense companies in the United States, with over 300 companies employing more than 190,000 workers.
Setup & Compliance
Colorado offers a business-friendly environment with mostly online registration processes.
Starting a Business in Colorado:
- Select Your Business Structure: Compare liability protection and tax advantages of different entity types.
- Register Your Business: File formation documents through the Colorado Secretary of State’s online portal.
- Obtain Necessary Licenses: Research and acquire relevant state and local business licenses.
- Register for Tax Accounts: Register with the Department of Revenue for sales tax and withholding if applicable.
- Set Up Employment Requirements: Register with the Department of Labor if hiring employees.
Key Compliance Considerations:
- Periodic Reports: Colorado requires regular periodic reports (typically annually) for most registered entities.
- Sales Tax Licensing: Businesses must obtain a sales tax license and collect state and local sales taxes.
- Trade Name Registration: Businesses operating under a name different from the legal entity name must register a trade name.
- Local Compliance: Counties and municipalities may have additional licensing and permitting requirements.
Hiring & Payroll
Colorado has enacted several progressive employment laws that employers must follow.
Colorado Payroll Requirements:
- Unemployment Insurance: Rates range from 0.75% to 10.39% on first $13,600 in wages.
- State Income Tax Withholding: Flat 4.55% of federal taxable income.
- Paid Family and Medical Leave Insurance: Starting January 2023, 0.9% of wages split between employer and employee.
Colorado Employment Laws:
- Minimum Wage: $13.65 per hour ($10.63 for tipped employees).
- Overtime: Due for hours over 40 per week, 12 per day, or 12 consecutive hours.
- Paid Sick Leave: 1 hour for every 30 hours worked, up to 48 hours annually.
- Wage Transparency: Job postings must disclose compensation and benefits.
- Final Paycheck: Due immediately if terminated; next scheduled payday if resigned.
State Incentives
Colorado develops strategic economic incentives to attract innovative businesses.
Key Business Incentives:
- Advanced Industries Acceleration Grant Program: Support for high-tech and innovative industries.
- Job Growth Incentive Tax Credit: Encourages job creation in targeted sectors.
- Enterprise Zone Program: Tax credits for businesses in economically distressed areas.
Small Business & Startup Support:
- Colorado Small Business Development Center: Provides business consulting and resources.
- Proof of Concept Challenge: Grants for early-stage innovative businesses.
- Rural Jump-Start Program: Tax exemptions for businesses in rural areas.
Regulatory Considerations
Colorado maintains progressive regulatory standards across various business sectors.
Key Business Regulations:
- Data Privacy: Comprehensive data protection laws with strong consumer rights.
- Environmental Compliance: Advanced regulations supporting sustainable business practices.
- Professional Licensing: Rigorous licensing for healthcare, cannabis, and technical industries.
Additional Regulatory Areas:
- Cannabis Industry Regulations: Unique and detailed compliance requirements.
- Workplace Equity: Strong anti-discrimination and equal pay regulations.
Business Overview
Colorado features a diverse economy with strengths in aerospace, technology, energy, and outdoor recreation industries. The state combines a highly educated workforce, strong innovation culture, and quality of life factors that make it attractive for both startups and established businesses seeking growth opportunities.
Key Facts & Figures
| Category | Details |
| Capital | Denver |
| Major Cities | Denver, Colorado Springs, Aurora, Fort Collins, Lakewood |
| State Sales Tax Rate | 2.90% |
| Local Sales Tax Rate | Up to 8% additional (varies by locality) |
| Corporate Income Tax | 8.84% flat rate (plus $800 minimum franchise tax) |
| Physical Nexus Threshold | Physical presence including property, employees, or in-state representatives |
| Economic Nexus Threshold | $100,000 in annual sales |
Did you know?
Colorado has the highest concentration of aerospace and defense companies in the United States, with over 300 companies employing more than 190,000 workers.
Setup & Compliance
Colorado offers a business-friendly environment with mostly online registration processes.
Starting a Business in Colorado:
- Select Your Business Structure: Compare liability protection and tax advantages of different entity types.
- Register Your Business: File formation documents through the Colorado Secretary of State’s online portal.
- Obtain Necessary Licenses: Research and acquire relevant state and local business licenses.
- Register for Tax Accounts: Register with the Department of Revenue for sales tax and withholding if applicable.
- Set Up Employment Requirements: Register with the Department of Labor if hiring employees.
Key Compliance Considerations:
- Periodic Reports: Colorado requires regular periodic reports (typically annually) for most registered entities.
- Sales Tax Licensing: Businesses must obtain a sales tax license and collect state and local sales taxes.
- Trade Name Registration: Businesses operating under a name different from the legal entity name must register a trade name.
- Local Compliance: Counties and municipalities may have additional licensing and permitting requirements.
Hiring & Payroll
Colorado has enacted several progressive employment laws that employers must follow.
Colorado Payroll Requirements:
- Unemployment Insurance: Rates range from 0.75% to 10.39% on first $13,600 in wages.
- State Income Tax Withholding: Flat 4.55% of federal taxable income.
- Paid Family and Medical Leave Insurance: Starting January 2023, 0.9% of wages split between employer and employee.
Colorado Employment Laws:
- Minimum Wage: $13.65 per hour ($10.63 for tipped employees).
- Overtime: Due for hours over 40 per week, 12 per day, or 12 consecutive hours.
- Paid Sick Leave: 1 hour for every 30 hours worked, up to 48 hours annually.
- Wage Transparency: Job postings must disclose compensation and benefits.
- Final Paycheck: Due immediately if terminated; next scheduled payday if resigned.
State Incentives
Colorado develops strategic economic incentives to attract innovative businesses.
Key Business Incentives:
- Advanced Industries Acceleration Grant Program: Support for high-tech and innovative industries.
- Job Growth Incentive Tax Credit: Encourages job creation in targeted sectors.
- Enterprise Zone Program: Tax credits for businesses in economically distressed areas.
Small Business & Startup Support:
- Colorado Small Business Development Center: Provides business consulting and resources.
- Proof of Concept Challenge: Grants for early-stage innovative businesses.
- Rural Jump-Start Program: Tax exemptions for businesses in rural areas.
Regulatory Considerations
Colorado maintains progressive regulatory standards across various business sectors.
Key Business Regulations:
- Data Privacy: Comprehensive data protection laws with strong consumer rights.
- Environmental Compliance: Advanced regulations supporting sustainable business practices.
- Professional Licensing: Rigorous licensing for healthcare, cannabis, and technical industries.
Additional Regulatory Areas:
- Cannabis Industry Regulations: Unique and detailed compliance requirements.
- Workplace Equity: Strong anti-discrimination and equal pay regulations.
