Starting a service business in Colorado comes down to four things: picking a structure, registering with the state, getting licensed for your trade, and setting up a way to bill customers. Filing an LLC in CO costs $50, ongoing reporting is $10/yr, sales tax is 2.9% + local, and personal income tax runs 4.4% flat. Below is the full sequence, the fees you should budget for, the licenses most trades need, and the deadlines that catch new Colorado owners off guard.
Most new registrations come out of Denver, Colorado Springs, Aurora and the rest of Colorado — local business licenses are issued at the city or county level, so check yours after the state filing clears.
| Item | CO cost |
|---|---|
| LLC / entity filing (one-time) | $50 |
| Annual / periodic report | $10/yr |
| Federal EIN (IRS) | Free |
| Sales tax registration | Typically free |
| Trade / professional license | Varies by trade |
| Local business license | Set by city / county |
Fees change — confirm current amounts with the CO Secretary of State and the Colorado Department of Revenue.
Choose your structure and file with the CO Secretary of State ($50). Get your free EIN from the IRS the same day.
Register for Colorado sales tax with the Colorado Department of Revenue, then open a business bank account under the registered name.
Apply for your trade license and local business license. This is usually the longest step: Sales tax license; Professional license.
Get general liability insurance (and workers' comp before your first hire), then set up estimates and invoicing so you can bill the day you're cleared to work.
LLC Filing Fee
$50
Annual Report
$10/yr
Sales Tax
2.9% + local
Income Tax
4.4% flat
Choose business structure
File with CO Secretary of State online
Get federal EIN
Register for CO sales tax
Get local licenses
Open business bank account
Colorado has one of the cheapest annual reports at $10
The state has a home rule system — check local tax rates carefully
File your Periodic Report annually to stay in good standing
Just $10/year for the periodic report — one of the cheapest in the nation.
Online LLC filings with the CO Secretary of State are typically processed in a few business days, and an EIN from the IRS is issued immediately online. Trade licensing and local permits usually take longest — plan on two to six weeks before you're fully cleared to work, depending on your trade.
No — you can operate as a sole proprietor in Colorado and still invoice customers legally. An LLC ($50 to file, $10/yr) separates your personal assets from business liability, which matters most once you're on customer property, hiring help, or signing contracts.
Colorado sales tax is 2.9% + local. Materials and goods are commonly taxable, while labor treatment depends on the type of work, so bill parts and labor as separate lines and register with the Colorado Department of Revenue before you start collecting.
Open a business bank account under the registered name, then invoice from a tool that applies CO tax per line item and accepts cards. Glo Invoice sends invoices by text with a one-tap pay link, and Tap to Pay lets you charge on site before you leave the job.