If you live in Colorado and are trying to start a business, you may be wondering what paperwork and documentation you need from the state. Overall, starting a business is relatively easy in the state, but things can get complicated depending on where you want to operate and what kind of products or services you’re selling.
To help you get your new venture on track as soon as possible, we’ve compiled a list of the different business licenses and permits you may need in Colorado. While this article doesn’t provide an exhaustive list of local requirements for all business types, it should serve as a guiding foundation for launching your new company. Here’s what you need to know.
Licensing and permitting are required by states, cities, counties, and the federal government for several reasons. First, to ensure that your company is operating legally. Second, to verify that you’re paying the right taxes and fees. Finally, some industries require more regulation and oversight because of their impact on the public. For example, restaurants must pass health inspections to ensure they don’t sicken the population or spread communicable diseases.
While we’re talking about licenses and permits, there are critical differences between both types of paperwork. Also, keep in mind that registering your business with the Colorado Secretary of State is not the same as obtaining a license or permit. Registration is required so the state knows what entity type you are (e.g., sole proprietor vs. LLC vs. corporation). However, licensing and permitting are additional steps.
The primary difference between a business license and a permit is that a license is a general document that allows you to conduct business in a particular city, county, or state. A permit is a document that allows you to perform specific activities, such as food handling, cannabis cultivation, and more. Realistically, you’ll need one business license and several permits, depending on what you’re selling.
Colorado does not require a general business license. However, most cities and counties within the state require businesses located in their jurisdiction to obtain a license. For example, if you have an office or storefront in Aurora or Boulder, you’ll need a general business license for those cities. You’ll have to research specific licensing requirements for other cities where you plan to do business.
When it comes to permitting, many businesses require a specialized permit from one or more Colorado agencies. For example, if you’re starting an acupuncture clinic, you’ll need a specific permit to perform acupuncture. You can find a complete list of permit requirements (including links to the application pages) on the Colorado Department of Regulatory Agencies (DORA) page.
Even if you’re only conducting business in Colorado, chances are you’ll still have to obtain a federal permit. Because vendors and suppliers come from different states and countries, the federal government has to get involved to ensure you’re following all regulations.
If you are conducting business that requires a federal license, you’ll have to apply with the department or entity that has jurisdiction. For example, anything related to agriculture will have to go through the U.S. Department of Agriculture. The Small Business Administration has a complete list of federal agencies and business types that require licensing.
Keep in mind that these are general steps and may vary from one business type to the next. As an entrepreneur, it’s up to you to do your due diligence and avoid potential legal consequences. These steps should help you get started, though.
Again, Colorado doesn’t require a statewide business license, but most cities and counties do. In addition to a general business license, you may need permits like:
Seller’s Permit – As with most states, Colorado collects sales tax on all sales, including short-term property rentals (i.e., Airbnb). Unless you want to pay that tax out of your own pocket, you must collect it from your customers. This means obtaining a sales tax license from the state and potentially from the city in which you do business.
Cannabis – Adult-use cannabis is legal in Colorado but tightly regulated. All businesses related to cannabis must get licensed with the Colorado Department of Revenue.
Alcohol – Colorado has over 40 types of alcohol-related permits, and you must submit an application with the Alcohol and Tobacco Tax and Trade Bureau (TTB). Some common permits include temporary events, retail storefronts, and wholesalers (i.e., a winery or brewery).
Contractor’s License – If you’re a plumber or electrician, you’ll need a state license. General contractors don’t need a license from the state, but many cities and counties set their own requirements.
Firearm Permit – You’ll need a federal permit from the ATF to sell firearms anywhere. In Colorado, firearm sellers must also get a state permit beginning July 1st, 2025.
There are many other types of permits you may have to obtain. Again, you can check the DORA website for all of Colorado’s state requirements and the Small Business Administration website for federal requirements.
First, you’ll need to consult with the department or division overseeing your business type. For example, the Department of Revenue oversees cannabis and alcohol, while the Division of Professions and Occupations (DPO) oversees businesses like accounting firms, clinics, and athletics.
Typically, you can submit the application form with the required fee online. Colorado also usually offers a checklist so you can make sure you submit the right documents in the correct sequence.
When it comes to federal permits and licenses, some departments (like the USDA) offer online filing. However, others (like the ATF) require you to call, email, or fax your request for a permit. As a rule, federal agencies are slower than state agencies because they oversee so many more people across the country. For that reason, it may make sense to submit your federal applications before submitting state paperwork.
Each department or agency takes a while to process your application and fee. To expedite this process, make sure to fill out your paperwork correctly. If necessary, consult a lawyer or experienced notary to verify that everything looks good. Some licenses, like a sales tax license, is usually processed within 24 hours. Others, like a liquor license, may take several months to process, depending on the permit type and the complexity of your business model.
For federal agencies, you’ll usually receive a unique code or login credentials to access an online portal. Typically, you must be more proactive about tracking your application status, as you may not receive a confirmation email or message once it’s approved. Some permits (like a firearm permit) can take up to 60 days. Others may take longer, depending on the agency.
Rarely is a license or permit valid in perpetuity. Instead, you must renew your paperwork (and pay renewal fees) regularly to keep your business in good legal standing. The renewal period varies from one permit to the next. For example, a business license in Aurora is valid for two years from the date of issuance. A marijuana license must be renewed annually with the Department of Revenue.
Conversely, a sales tax license is valid for two years but expires at the end of each odd-numbered year. So, if you got a license in 2024, it would expire at the end of 2025, even if it hasn’t been 24 months exactly.
When finalizing your application, make sure to pay attention to the renewal date. Also, the fee may be different for a renewal (often cheaper), so keep that in mind. Most Colorado agencies are good about sending reminder messages when a renewal date is approaching, but it’s always good to be diligent with your own records.
As you can see, getting licensed and permitted in Colorado is a relatively straightforward process. The more research you do before starting your business, the easier it will be to get the correct permits and start selling to your customers. Also, using third-party services can help expedite the process and ensure you don’t miss any details or documents along the way. With so much to keep track of (including your business operations and logistics), it’s nice to have a helping hand.
Not getting a license can put you in legal and financial trouble. Not only can your business get shut down by the state (or federal) government, but you’ll also likely have to pay steep fines and penalties. For example, not obtaining a liquor license can come with fines of up to $100,000.
If you’re conducting business in a city that requires licensing, you must still obtain a license as a sole proprietor. While your business may be more streamlined as a sole proprietorship, you can’t skip licensing and permitting.
Yes, all business licenses and permits require renewal, but the dates change from one license to the next. You may have to renew annually or biennially (every other year), depending on the situation.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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