Colorado lesson 5 of 6
Colorado state taxes, licences and permits
Colorado has no LLC franchise tax, but it does tax income, and any LLC selling taxable goods or services needs to register with the Department of Revenue.
State income tax on LLC profit
Colorado charges a flat state income tax rate on income, including the share of LLC profit that flows through to a Colorado-resident member's personal return. There is no separate franchise tax on the LLC itself for a standard pass-through entity.
Sales tax licence
If your LLC sells tangible goods or certain taxable services in Colorado, you need a sales tax licence from the Department of Revenue before making sales. This is sometimes called a sales tax account by the Department, and it covers state and state-administered local sales taxes; many Colorado cities that administer their own sales tax separately from the state require an additional local licence.
Colorado's home-rule cities, such as Denver and Boulder, often run their own sales tax licensing on top of the state licence. Check with the city where you operate.
No statewide business licence
Colorado does not issue a single general business licence. Licensing requirements come from your industry regulator and from the city or county where you operate.
Key takeaways
- LLC pass-through profit is taxed at Colorado's flat state income tax rate for resident members.
- A Department of Revenue sales tax licence is required before selling taxable goods or services.
- There is no single statewide business licence; check city and county rules separately.
Frequently asked questions
Does Colorado have an LLC franchise tax?
No. A standard pass-through Colorado LLC does not pay a separate franchise tax to the state.
Is the sales tax licence a one-time fee?
The application itself has a cost that can vary by licence type; check the current fee on the Department of Revenue's application page before applying.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team