Having a business licence in Colorado allows your business to legally operate in the state and helps ensure your activities comply with regulations and taxes. While some licences are regulated at the state level, Colorado business licensing is mostly handled by local jurisdictions. If you're just starting out, it might not be clear which licences you need, especially if you plan to operate your business in more than one city or county.

Whether you want to open a café, run a home-based business, or sell products online, having the right business licences will help protect your business legally and financially. Below, we'll discuss how to determine which business licences and permits you might need in Colorado, the general steps to apply for them, and how much the process typically costs.

Key takeaways

• Colorado business licensing encompasses a mix of state and local operating licences, professional licences, zoning permits, home occupation licences, and sales tax licences.

• If you're planning to start a business, you'll need to contact the state of Colorado's Small Business Development Center (SBDC) and the local jurisdiction your business will operate in to confirm your exact licensing needs.

• Licence costs, application processes, and renewal timelines can vary widely depending on your chosen location, industry, and business structure.

Do you need a Colorado business licence?

If you want to operate a business in Colorado, you'll need a business licence, but the type of licence will depend on factors such as your chosen industry and location, and whether you plan to sell tangible products. Unlike some other US states, Colorado doesn't issue or require a statewide general operating licence. However, it does issue licences for certain regulated industries such as healthcare and food services. Businesses that sell tangible products can also require a Colorado sales tax licence to collect and remit taxes.

Colorado business licensing is mostly managed by local jurisdictions – at both the city and county levels. Depending on where your business will operate, you'll likely need to get a local general business licence, plus any other required licences such as zoning permits, home occupation licences, and local professional licences.

Businesses that operate in one of Colorado's home rule municipalities might also need a local sales and use tax permit. Colorado has more than 100 home rule municipalities, including major cities such as Boulder and Denver, and 66 of them administer their own local sales and use taxes – which are separate from state sales tax.

What are some common business licences needed in Colorado?

Regulations vary by industry and jurisdiction, but these are the common types of licences and permits you might need in Colorado:

• Local general business licences: Most Colorado counties and cities set their own requirements for general business licensing. If your business is going to operate in multiple counties or cities, you might need a separate licence for each jurisdiction.

• Sales tax licences: Most businesses that sell tangible products are required to get a statewide sales tax licence to collect taxes and file Colorado sales tax returns. If your business will operate in one of the 66 home rule cities that collect sales tax locally, you'll also need a separate local sales and use tax permit.

• Zoning permits: If you plan to operate a business from a physical location, check local zoning laws to confirm your business will be allowed to operate there legally. Depending on the jurisdiction and type of business you want to start, you might need additional permits or fire department clearance.

• Home occupation licences: Most Colorado cities and towns require home-based businesses to be licensed and have strict rules for operation. Check local regulations to see what's allowed and what licensing is required.

• Professional licences: Many professional industries are highly regulated by the Colorado Department of Regulatory Agencies (DORA), including healthcare, financial services, real estate, and occupational professions (e.g., architecture, cosmetology, plumbing). You might need local professional licences, too, depending on the city or county where you plan to operate your business.

• Food safety licences: The Colorado Department of Public Health and Environment (CDPHE) and certain local public health agencies regulate most types of food-related businesses and mandate food safety licences. These include restaurants, food trucks, grocery stores, businesses that produce hemp in food, manufactured food, milk, and retail food. Certain types of cottage food businesses will be allowed to operate under a new law beginning 1 January 2027, if they meet the state's requirements.

• Cannabis and hemp licences: Businesses that grow, sell, and manufacture products with medical or recreational cannabis and hemp need licences from the state and the local jurisdictions they operate in. The Colorado cannabis industry is complex and regulated by several statewide agencies – including the Colorado Department of Agriculture (CDA) and the Marijuana Enforcement Division of the Colorado Department of Revenue (CDOR) – plus local agencies.

• Federal business licences: Some types of Colorado businesses must be federally licensed to operate legally. These include firearms dealers, alcohol sellers, and radio and TV broadcasting companies.

The website for the Colorado Small Business Development Center (SBDC) is a great resource for researching what licences, permits, and registrations you'll need based on your chosen business type and location. Most Colorado counties and cities also offer similar online resources that can help you determine what licences are needed in your jurisdiction.

What are the steps to get a Colorado business licence?

Here's a guide to getting a business licence in Colorado, from start to finish:

• Choose your business structure: Decide whether you'll operate as a sole proprietor, limited liability company (LLC), partnership, or corporation. If you want to structure your business as an LLC or corporation, you'll need to register your business with the Colorado secretary of state's office before you apply for business licences.

• Register your business name: Sole proprietors who operate a business under a name other than their own need to register a "doing business as" (DBA) name – or file a statement of trade name – with the secretary of state's office.

• Get your Employer Identification Number (EIN): You'll need an EIN from the US Internal Revenue Service (IRS) before applying for any Colorado business licences. You can get your EIN online by applying on the IRS website.

• Check local requirements: Most Colorado businesses need local licences and permits from the city or country where they're based. Visit the websites for your city and county to see what's required and find relevant application forms. Some jurisdictions might allow online applications, while others might require you to mail paperwork or submit it in person.

• Apply for state and industry-specific licences: Depending on the type of business you're starting, you might need additional licences or permits from the state of Colorado. You can use the DORA site to find out which permits apply to your industry. Businesses that need a Colorado sales tax licence must complete Form CR 0100 to start the application process.

• Submit zoning and building permits: If you want to operate your business out of a physical location, you'll need to check local zoning laws to confirm you can legally operate there. You might also need additional building permits or fire department clearance.

• Pay any fees: Most licences and permits come with application fees, which vary depending on the city or industry. You'll need to pay these when you submit your application. You'll also want to double-check whether there are annual renewals so that you can keep your documents current.

• Receive your business licences: Once you've submitted all the necessary licensing applications, paperwork, and fees, you'll receive your Colorado business licences and be able to legally begin operating your business. But timelines can vary widely, depending on the type of licence. While some business licences might be ready the next business day (e.g., the Colorado sales tax licence), others can take days, or even months, to receive.

As a new business owner, you can start the business registration process by visiting the Colorado Department of Labor and Employment (CLDE) website, which offers an online registration tool.

How much does a Colorado business licence cost?

Here are some potential costs to start and maintain a business in Colorado.

DBA filing fees

If your business is going to operate under a name other than your legal name, you'll need to file for its DBA or trade name. The first-time filing fee in Colorado is US$20.00.

General business licence fees

The cost of a general business licence will differ according to the city or county you decide to base your business in. For example, in Aurora, business owners pay an application fee of US$19.00 and a licence fee of US$28.00, and renewal costs US$28.00 every two years. In Lone Tree, they pay US$10.00 for a business licence, which doesn't expire, so there's no cost to renew.

State professional licence fees

Statewide licensing fees for regulated industries and professional occupations vary widely. For example, if you're going to open a real estate business, a real estate broker's licence that renews within 32 days to one year costs US$376.50, plus other fees including a US$83.00 application fee. Additional fees will apply depending on the business structure you choose (e.g., US$5.00 for sole proprietors, US$120.00 for LLCs).

Local professional licences

Some local jurisdictions in Colorado require industry-specific licences for certain types of professionals. Colorado Springs, for instance, requires licensing for 12 types of businesses, including tree services and mobile food vendors, and most licences cost US$110.00. But in Lakewood, a lodging facility licence has a US$350.00 application fee, plus a US$400.00 annual licence fee, while contractors pay US$150.00 for a licence and US$400.00 to renew every three years.

Colorado sales tax licence

The cost of a state sales tax licence is US$16.00 plus a US$50.00 refundable deposit. But you can get the deposit back after you've paid US$50.00 in state sales tax. Licences are good for two years and cost US$16.00 to renew.

Local sales tax permits

If you're going to operate in a city that collects its own sales tax, you'll need a local sales tax permit in addition to the Colorado state sales tax licence. Costs generally range from US$0.00 – US$20.00, and licences are usually valid for two years.

Food safety licences

CDPHE's food-related safety licences have an application fee of US$155.00, plus separate licensing costs that vary widely. For example, a restaurant licence costs US$481.00 – US$581.00, while a mobile food business licence costs US$338.00 – US$481.00.

Zoning permits

Modifications to a physical structure generally require zoning permits. Fees vary based on the scope of the changes and the business's location, and they can range from a few hundred dollars to several thousand.

Home occupation licences

Many local jurisdictions require home-based businesses to maintain a home occupation licence, and costs range widely. In Eaton, for instance, the initial application costs US$20.00, as does the yearly renewal fee. However, in Colorado Springs, a home occupation licence costs US$120.00, but renewal isn't required.

How do I renew a Colorado business licence?

If you already have a Colorado business licence and need to know how to renew it, check with the jurisdiction that issued your original licence. Business licence renewal timelines, fees, and processes differ by licence type and location. Most business licences and permits need to be renewed annually or every two years, and renewal fees tend to cost the same as or slightly less than the original application.

Licences are typically renewable online through state, county, and city websites. You might also be able to renew your licences by post or in person. Deadlines for renewal are usually tied to your business's registration anniversary, but some licences might renew at specific intervals (e.g., only during odd or even years). To avoid missing important renewal deadlines, consider signing up for reminders by email, text, or post.

What Colorado-specific licensing considerations should businesses keep in mind?

Here are a few considerations specific to Colorado.

Home rule cities can complicate licensing and tax filing requirements

Colorado has more than 100 home rule cities. Home rule cities have a high level of control over governance, including business licensing, permits, zoning, and tax filing requirements. Requirements vary significantly between cities. If your local government has different requirements from the state, you must meet both sets of requirements.

Online sales tax licence rules can differ by retail channel

If you're going to start an e-commerce business, you'll need a Colorado sales tax licence to collect and remit sales tax, since the state will consider you an "online retailer." But if you only plan to sell physical products through an online or in-person marketplace facilitator (e.g., Etsy or a local market), sales tax usually isn't required. If you want to sell products through a combination of retail channels (e.g., an online marketplace and your own website or store), the state will consider you a "multichannel seller." In this case, you'll need a Colorado sales tax licence to collect and remit sales tax for any sales made in non-marketplace channels.

Most home-based businesses require licences

If you plan to operate a home-based business in Colorado, you'll likely need a home occupation licence. Local laws vary widely so you'll need to pay close attention to the rules and regulations in your city and county. Some might limit operating hours, parking, signage, noise levels, or the type of business you're allowed to run out of your home. Some laws specify whether you can have customers or employees on the property.

For example, in Colorado Springs, you can have employees as long as they reside in the home. You can also have clients visit your home-based business, but visits must be based on appointment and scheduled with at least 15 minutes between each client.

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FAQs about getting a business licence in Colorado