At a glance
- Corporate tax
- 4.4% flat
- Tax on wages
- 4.4% flat
- Sales tax
- 2.9% + local; home-rule cities separate
- Economic nexus
- $100,000 in sales
- Minimum wage
- $15.16/hr (Denver $19.29)
- UI wage base
- $30,600
- New-employer UI rate
- 3.05% (most industries)
- Paid leave program
- FAMLI 0.88% (split 50/50)
- Annual report
- Periodic report, anniversary month — $25
2026 figures, each explained with its source on the area’s page. On top of the federal baseline.
Setup, in order
Register the corporation
Before doing business in Colorado — usually the first hire or officeFile a Statement of Foreign Entity Authority with the Secretary of State and appoint a Colorado registered agent.
Register for withholding
Before the first Colorado payrollOpen a wage withholding account with the Department of Revenue through MyBizColorado.
Register for unemployment insurance
When you first pay wages in ColoradoOpen an unemployment insurance account with CDLE through MyUI Employer.
Register for FAMLI
With the first Colorado employeeRegister with the FAMLI Division, then report wages and remit the 0.88% premium each quarter.
Report new hires
Within 20 days of each hireReport each new or rehired employee to the Colorado State Directory of New Hires.
Buy workers’ compensation
Before the first employee startsWorkers’ compensation is required from the first employee.
Get sales tax licenses
On physical presence, or at $100,000 of Colorado salesRegister with the Department of Revenue for state sales tax, and with each self-collecting home-rule city through SUTS or directly.
Register with the city
When you have an office or employees in a home-rule cityIn Denver, register for the occupational privilege tax and a Denver sales tax license; other cities have their own.
The six areas
- AccountingAccounting and state tax in ColoradoA flat 4.4% corporate income tax on federal taxable income, apportioned on sales. Conformity is rolling, with a 2026 decoupling from the federal FDDEI deduction.Corporate income tax4.4%
- ReceivablesReceivables and sales tax in ColoradoA 2.9% state sales tax, a $100,000 nexus threshold, and home-rule cities that write their own rules. The state doesn’t tax SaaS; Denver and some other cities do.State sales tax2.9%
- PayablesPayables and contractors in ColoradoColorado wants only 1099s that show Colorado withholding, by Jan 31. Use tax applies to untaxed purchases, and home-rule cities can tax software the state doesn’t.State 1099 filingJan 31
- PayrollPayroll taxes and employer rules in ColoradoWithholding, UI and FAMLI are three accounts with three quarterly filings. FAMLI is 0.88% in 2026, and Denver adds a higher minimum wage and a monthly head tax.State income tax withholding4.4%
- ComplianceCompliance and filings in ColoradoRegister with the Secretary of State for $100, file a $25 periodic report each year, and register separately with any home-rule city you do business in. No franchise tax.Foreign registration$100
- AdvisoryAdvisory: credits and decisions in ColoradoNo statewide R&D credit, only the Enterprise Zone program. QSBS follows the federal rule. Most mistakes happen at the city level, in Denver especially.R&D creditEnterprise zone credit
Who you register with
- Colorado Department of Revenue (Taxation Division)Corporate income tax, withholding, state sales tax, SUTS
- Colorado Department of Labor and Employment (CDLE)Unemployment insurance premiums, wage and hour rules, workers’ compensation
- Colorado Division of Family and Medical Leave Insurance (FAMLI)FAMLI premium registration and quarterly wage reports
- Colorado Secretary of StateStatement of Foreign Entity Authority and periodic reports
- City and County of Denver — Department of FinanceDenver sales and use tax and occupational privilege tax
- Colorado Department of the Treasury — Unclaimed PropertyAnnual unclaimed property report
Hiring across the border
An employee who lives in one state and works in another is the most common way a startup ends up registered in two. These are Colorado’s neighbors.
- WYWyomingNo income taxes at all; a $60 license tax, state-fund workers’ comp and no tax on SaaS
- NENebraskaFlat 4.55% corporate tax, a $15 minimum wage, and sick time from the 11th employee
- KSKansas3.5% plus surtax, single sales factor from 2027, and a transferable R&D credit
- OKOklahomaFlat 4% corporate tax, no franchise tax since 2024, but three-factor apportionment
- NMNew MexicoA gross receipts tax on services, a flat 5.9% corporate rate and combined returns
- AZArizonaTPT taxes the seller, SaaS is a rental, and the R&D credit no longer pays out in cash
- UTUtahFlat 4.45% tax after a sixth cut, a $100 minimum, and SaaS taxed where it’s used
Common questions
Does Colorado follow the federal Section 174 rules?
Generally yes. Colorado starts from federal taxable income and picks up federal amendments automatically, so the federal treatment of research costs flows into the Colorado return unless the legislature decouples. The 2025 special session decoupled from the FDDEI deduction and made the QBI addback permanent; check the Legislative Council’s annual report on federal changes for anything newer.
Is SaaS taxable in Colorado?
Not at the state level. But Colorado’s home-rule cities write their own sales tax codes, and some, Denver among them, tax SaaS. A SaaS company with Colorado customers can owe city tax where it owes no state tax.
Do we owe use tax on software subscriptions?
Not to the state. Colorado doesn’t tax SaaS, so a SaaS subscription bought from out of state brings no state use tax. Home-rule cities can be different: Denver, among others, taxes some SaaS, and a Denver business owes Denver use tax when a vendor didn’t charge Denver sales tax.
Do we pay FAMLI with only a few employees?
Yes, unless you have fewer than ten employees, in which case you pay no employer share but still register, report wages and remit the employees’ 0.44%. The 2026 premium is 0.88% of wages up to the Social Security wage base.
What is Colorado’s annual report?
The periodic report, filed online with the Secretary of State each year in a window that opens two months before and closes two months after the month the company registered. It costs $25 on time; after the window it carries a $50 late penalty, and an entity left unfiled becomes delinquent and has to file a statement curing delinquency to get back into good standing.
Does Colorado have an R&D credit?
Not statewide. Colorado’s research credit is part of the Enterprise Zone program, so it depends on where the research is done and is claimed through OEDIT’s certification process. Many Denver-area neighborhoods are in zones; check the map before assuming either way.
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
- Colorado Department of Revenue — Corporate Income Tax
- Colorado Legislative Council — Federal tax law changes and their impact on Colorado (2026)
- Colorado Department of Revenue — Sales Tax Guide
- Colorado Department of Revenue — Local Government Sales Tax
- Colorado Department of Revenue — SUTS Participating Jurisdictions
- Colorado Department of Revenue — Annual Reconciliation FAQ
- CDLE — Introductory Rates
- CDLE — UI Employer Account Management
- Colorado FAMLI — Premium and Benefits Calculator
- CDLE — Division of Labor Standards and Statistics
- City and County of Denver — 2026 minimum wage
- City and County of Denver — Occupational Privilege Tax
- Colorado Secretary of State — Business filings
- Colorado State Directory of New Hires
- Colorado Department of the Treasury — Unclaimed Property
- CDLE — Division of Workers’ Compensation
- Colorado OEDIT — Enterprise Zone Program
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.