Colorado Business Resource
1) Colorado Tax Registration
When starting your new business in the state of Colorado, you must first register for the taxes that are related to your business’s services. Examples of common forms of tax for businesses in Colorado include wage withholding tax and sales and use tax. However, depending on the services provided by your business, the following taxes may also apply:
- Liquor excise tax
- Cigarette and tobacco tax
- Severance tax
- Fuel excise tax
Visit Colorado’s Department of Revenue Division of Taxation site for more information on registration requirements. You can also visit the Department of Revenue’s Forms page to download the necessary electronic forms. Along with the forms, you will find specific information regarding each form of taxation.
2) Business Licenses
In addition to tax registration, your Colorado-based business must also acquire permits or licenses that are relevant to the nature of the offered services. The cost and conditions surrounding the permit or license will vary. Several examples of state permits and licenses include:
- Beer and Wine Licenses
- Plumbing Permits
- Bingo and Raffle Licenses
Visit the Get Licenses and Permits page of Colorado.gov for electronic forms that allow you to renew or obtain business licenses. The site also features a Licenses, Permits and Registration page, which offers more general information concerning background checks and registration.
3) Local Permits
The local government in your area, such as that of your city or county, may require specific permits and licenses. Each municipality may have its own unique regulations. Here are some of the most common licenses and permits you may need.
- Alarm Permit
- Building Permit
- Business License and/or Tax Permit
- Health Permit
- Occupational Permit
- Signage Permit
- Zoning Permit
4) Incorporation Filing
Colorado businesses that are corporations, non-profits, limited liability companies and partnerships must register with the Colorado Secretary of State. Electronic applications can be found on the Secretary of State’s File a Document page.
A sole proprietorship business does not need to register with the Secretary of State. In these kinds of businesses, all profits are income of the owner. However, the owner is also liable for the business’s debts and the owner’s personal name is used as the business’s name.
5) Doing Business As
If you wish to avoid using your personal name as a business name, you can file for a trade name. Select the Register a Trade Name option on the Colorado Secretary of State website to begin the process. You should also search through names of other businesses to ensure that the trade name you have in mind is available. Use the Records Search page to browse through existing business entity names.
6) Withholding Income Taxes
Following the filing process of the 4th quarter of the current year, employers should continue to track those employment records for at least four years. The following items should be included in the records:
- The employer’s identification number
- Employee information, which may include full names, contact information and social security numbers
- Copies of tax withholding allowance certificates
- Pension payment data
The IRS website presents a list of additional items that should appear in your business’s records. By following these record keeping tips, you will gain several benefits. For example, you will be capable of monitoring and estimating your business’s growth.
W-4 and W-2 Forms
Employers must request that employees return a completed Form W-4, a withholding exemption certificate. Afterward, the employer can send the forms to the IRS for official filing.
Employers in Colorado must also send a copy of Form W-2 to the Social Security Administration. This document contains information about the withheld taxes and paid wages for the employees. In by mail, the document must be submitted by the end of each February. If the submission is electronic, the form is not due until the end of March. Employees should receive copies of Form W-2 by the end of the following January.
These following links will lead to resources that provide information and applications for filing W-2 and W-4 forms:
- The Social Security Administration’s Employer W-2 Filing Instructions and Information page
- The Internal Revenue Service’s Employer Tax Guide
7) Employee Eligibility Verification (Form I-9)
Newly hired employees in Colorado should complete Form I-9, which should be returned the employer within three days of the beginning of employment. Form I-9 provides proof of eligibility to work within the United States, so the employer is responsible to keep a copy of each employee’s form to avoid future complications.
Form I-9 is available on the official site of the United States Citizenship and Immigration Services.
8) New Hire Reporting
New employees or returning employees should be reported to the Colorado State Directory of New Hires within 20 days after the date of hire. This is the responsibility of the employer. Information to report includes the employee’s name, address and social security number, as well as the employer’s payroll address and federal identification number. Visit the State of Colorado’s New Hire Reporting page to submit the report electronically.
9) Insurance Requirements
If the nature of your Colorado-based business requires you to hire employees, you will need to pay Colorado unemployment tax as well as workers’ compensation tax.
Colorado’s workers’ compensation tax aids in-state workers who are victims of injuries and illness in a work-related setting. You can find more information on Colorado’s Employers and Insurers page.
Colorado’s unemployment insurance tax is designed to provide financial aid to individuals who are capable of working but unable to find a job. More information is available on Colorado’s Unemployment Premium Overview page.