How Much Does a Business License Cost in Colorado?

Colorado’s diverse culture is an attractive option for those considering a new business venture. The state has a convenient system that helps new enterprises get their doors open.

There is no general business license requirement in this state. Instead, they focus on registration and providing companies with distinctive options for licensing based on their type and location. The process starts at the Secretary of State’s office as you register your new business and ends when you determine what state and local licenses you require. Business license costs vary by state, so let’s go over what you need to expect in Colorado.

Do you need a business license in Colorado?

There are no general business license requirements in Colorado like you find in other states. Instead, it operates with specific permits and licenses, based on the industry and business activity.

It also requires businesses to register with the Secretary of State’s office.

Once registered, you may need a specific business license to start a business in Colorado, depending on the type and location. Colorado breaks its licensing down into categories, such as sales tax, occupational, and specialized.

State tax or sales tax license

Any business that sells, delivers, or leases personal property or taxable services in Colorado should obtain a state tax license. It is what allows you to collect and pay state sales and use taxes. If your business has multiple locations in the state, each one requires its own sales tax license.

In Colorado, this license can also serve as a resale certificate. That can give businesses the right to purchase goods tax-free if they intend to resell them.

A sales tax license may be a requirement for mobile businesses and online vendors, as well. Even if your company has no physical location in the state, you may need to register and apply for a sales tax license. The sales tax license is a requirement if the business has more than $100,000 in gross retail sales delivered into the state.

The exception to this rule might be companies that sell their products through a marketplace, such as Amazon or Etsy. In those instances, the marketplace may be responsible for collecting sales tax. Business owners should verify who is collecting and paying sales tax before setting up their virtual store.

Occupational licenses

Many professionals need to get licensure from the state of Colorado before doing business there. For instance, barbers and stylists must have licenses. These licenses are intended for individuals, rather than businesses. It verifies they meet the vocational and educational standards to work in that profession.

Licenses specific to certain industries

Some industries may need special state licensing to operate in Colorado. Some examples of industries with this requirement include private security, construction, and cannabis (both medical and retail).

Potential business owners should be aware that many cities and counties also require business licenses. There may also be federal licensing requirements for your company.

Pro Tip:

You can determine what type of state licensing you need by visiting the Colorado Department of Regulatory Agencies (DORA), the Colorado Department of Revenue, or the Colorado Secretary of State.

In addition, the Colorado Division of Professions and Occupations offers a database tool that tells you if you need to get an occupational license. You can also find more information about local licensing requirements by visiting the relevant government website.

How much does a business license cost In Colorado?

Since there is no state-wide business license requirement in Colorado, there is no clear-cut answer to this question. It depends on many factors. The first step for any business opening there is to register with the Secretary of State.

Business registration fees

The Colorado Secretary of State charges fees based on the business structure. An LLC or corporation might pay $50 for Articles of Organization. They may also pay an additional $20 for a DBA. On average, fees should range from $50 to $100 for initial state-level registration.

State-level licensing fees

Businesses that require a sales tax license should expect to pay between $12 and $16. They must also deposit $50 for each physical location. Businesses get this deposit back as soon as they collect and pay their first $50 in sales tax. You must pay the amount owed, and then the state will refund the $50 deposit.

These fees apply to out-of-state retailers who have an economic nexus with Colorado. This means they do not have a physical location in the state but report retail sales there of over $100,000.

Occupational licensing fees

The cost of occupational licensing in Colorado varies significantly by profession. For example, you must have an occupational license to sell marijuana in the state, even as an employee. That license may cost between $170 and $209 for the initial application. There could also be renewal fees.

At the state level, the average fees might look like this:

Articles of Incorporation	$50
Trade Name (DBA)	$20
Reservation of Name	$25
Annual Periodic Report for LLCs	$25
Registered Agent Charges	$10

Pro Tip: The Colorado Secretary of State’s website lists all the fees on one page for easy review.

Types of business licenses in Colorado and their cost

When asking, “How much is a business license in Colorado?” the type and city are significant considerations. Aurora could charge $27 for a two-year general business license, and Colorado Springs $110 for an annual one. The city of Thornton, Colorado, charges no sales and use tax business license fee; however, it does charge for specific permits, such as a liquor license.

There is a substantial variance in country business license fees, too. Colorado Springs County might charge $110 annually for a business license. Other counties may have different fee schedules. There may also be federal licenses to consider, depending on the industry and business type.

Types of businesses that require a license in Colorado

In Colorado, the license requirements fall into distinct categories:

• Trade and Construction – this would include concrete contractors, general contractors, and even funeral escorts
• Personal services – cosmetologists, barbers, and day spas fall into this category.
• Retail and commerce – businesses that buy and sell tangible goods.
• Specialized services – this vague category encompasses particular license requirements for services that don’t fall into other sectors, such as pawnbrokers, security firms, and bicycle-sharing operations.
• Food and beverage – bars, restaurants, and mobile food vendors would require this license.
• Public safety and care – this category primarily covers healthcare professionals, including advanced practice nurses, chiropractors, and acupuncturists.

You can visit the DORA website to get a complete list of businesses that require a license in Colorado.

Renewing your business license in Colorado

Certain licenses may require annual or biennial renewal. For instance, a sales tax license in this state is renewed every two years and may cost $16 each time. Different licenses have different renewal fees, though.

The various licenses may also have specific renewal requirements. LLCs should plan on filing an annual Colorado Periodic Report with the Secretary of State to maintain an active status.

Businesses must understand the renewal requirements both at the state and local levels to avoid late penalties. For instance, Colorado Springs may charge an additional 50% for late filings. In some cases, being late may result in businesses having to pay a reinstatement fee.

There is no one-size-fits-all approach when you start a business. Colorado does provide ample resources to help companies establish themselves in the state, though. A practical place to begin is by determining the type of business you want and then examining the industry, country, and local licensing requirements.

Colorado is a beautiful place to run a business. Go for the view and stay for the opportunities available to you there.

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