Colorado Business Taxes
This article will provide a detailed overview of these taxes, including information on exemptions, due dates, necessary forms, and eligibility criteria for filing business taxes in Colorado.
Contents
Understanding the intricacies of Colorado business taxes is essential for any company operating within the state. Colorado imposes a variety of taxes on businesses, including corporate income tax, sales tax, property tax, and industry-specific taxes. Colorado’s tax structure includes several types of taxes that businesses must be aware of:
- Corporate Income Tax
- Sales and Use Tax
- Property Tax
- Industry-Specific Taxes
- Employment Taxes
Each of these taxes has its own regulations, rates, and filing requirements, which we will explore in detail.
Colorado Corporate Income Tax
Colorado corporate income tax is levied on the net income of corporations conducting business within the state. The state uses a flat tax rate of 4.55% on federal taxable income, with certain state-specific adjustments.
Eligibility Criteria
All corporations, including C-corporations and S-corporations, operating in Colorado must file a corporate income tax return if they meet the following criteria:
- Incorporated in Colorado
- Doing business in Colorado
- Earning income from Colorado sources
Required Forms
- Form 112: Colorado Corporate Income Tax Return.
- Form 112EP: Colorado Corporate Estimated Tax Payment Voucher, for estimated tax payments.
- Form 112X: Amended Colorado Corporate Income Tax Return, if corrections to previously filed returns are needed.
Colorado Sales and Use Tax
Sales tax in Colorado applies to the sale of tangible personal property and certain services. The state sales tax rate is 2.9%, but local jurisdictions can impose additional sales taxes, resulting in varying rates across different areas.
Use tax applies to the use, storage, or consumption of tangible personal property or services in Colorado when sales tax has not been paid.
Eligibility Criteria
Businesses must collect and remit sales tax if they:
- Have a physical presence in Colorado.
- Sell goods or services that are taxable in Colorado.
- Meet the economic nexus threshold: Gross sales exceeding $100,000 in Colorado during the current or previous calendar year.
Required Forms
- Form DR 0100: Colorado Retail Sales Tax Return.
- Form DR 0100A: Colorado Retailer’s Use Tax Return.
- Form DR 0103: Colorado Consumer Use Tax Return.
Colorado Property Taxes
Property taxes in Colorado are assessed and collected at the local level, primarily funding local services such as schools, public safety, and infrastructure.
Eligibility Criteria
Businesses in Colorado that own real property (land and buildings) or personal property (equipment, machinery, etc.) are subject to property taxes.
Required Forms
- Personal Property Declaration Schedule: Specific forms vary by county; check with the local assessor’s office.
- Real Property Declaration: Again, specific forms vary by county.
Industry-Specific Taxes in Colorado
Colorado imposes additional taxes on certain industries, such as:
- Oil and Gas Severance Tax: Levied on the extraction of nonrenewable natural resources.
- Liquor Excise Tax: Imposed on the sale of alcoholic beverages.
- Tobacco Products Tax: Applies to the sale of cigarettes and other tobacco products.
Required Forms
- Form DR 0021: Oil and Gas Severance Tax Return.
- Form DR 0442: Liquor Excise Tax Return.
- Form DR 0229: Tobacco Products Tax Return.
Colorado Employment Taxes
Businesses in Colorado must also comply with various employment tax requirements, including state unemployment tax and state withholding tax.
State Unemployment Tax
Employers must pay state unemployment tax to the Colorado Department of Labor and Employment.
- Form UITR-1: Unemployment Insurance Tax Report.
State Withholding Tax
Employers must withhold state income tax from employees’ wages.
- Form DR 1094: Colorado Withholding Tax Return.
- Form DR 1093: Annual Transmittal of State W-2 Forms.
Colorado Business Tax Exemptions
Colorado offers several tax exemptions that can benefit businesses:
- Manufacturing Exemption: Exemption on machinery and machine tools used in manufacturing.
- Enterprise Zone Exemptions: Various tax credits and exemptions for businesses located in designated enterprise zones.
- Research and Development Exemption: Exemption on tangible personal property used in qualified R&D activities.
Due Dates for Colorado Business Taxes
Timely filing and payment of taxes are crucial to avoid penalties. Here are the general due dates for various Colorado business taxes:
Corporate Income Tax:
Annual return due by April 15th for calendar-year taxpayers.
Estimated tax payments due quarterly on April 15th, June 15th, September 15th, and December 15th.
Sales and Use Tax:
Monthly returns due on the 20th of the following month.
Quarterly returns due on the 20th of the month following the quarter’s end (April, July, October, January).
Property Tax:
Personal property declarations usually due by April 15th.
Payment due dates vary by county, generally in two installments: February 28th and June 15th.
Employment Taxes:
State withholding tax returns due monthly, quarterly, or annually based on the business’s filing frequency.
Unemployment tax reports due quarterly.
