Starting a service business in Colorado

Form your business in Colorado

File Articles of Organization online with the Colorado Secretary of State. The fee is $50 as listed on the Secretary of State's business fee schedule in October 2026, and the schedule shows no paper filing option for this document. After filing, register with the Colorado Department of Revenue for a state tax account; the Secretary of State points new businesses to MyBizColorado for the other state registrations.

Ongoing state filings

Every LLC files a Periodic Report each year, electronically, for $25 as listed in October 2026. Your reporting month appears on the entity's summary page; you can file without penalty from two months before that month to two months after it. Miss the window and the late filing penalty is $50, and an entity that keeps missing reports becomes delinquent. Sign up for the Secretary of State's email notices, but the office is clear that tracking the date is your responsibility.

Using a business name (DBA)

Colorado requires a trade name, not just allows one: a for-profit business that is not using its entity's true name, or an individual not using their legal first and last name, must file a Statement of Trade Name with the Secretary of State before doing business under that name. It is filed and paid online, $20 as listed in October 2026, and the Secretary of State notes that some trade names must be renewed every year ($5), so check the expiration shown on your filing.

Not sure whether you need an LLC at all? Read LLC vs sole proprietor for contractors, then get your free EIN from the IRS.

Licensing for service trades

At the state level, Colorado's Division of Professions and Occupations licenses electricians (residential wiremen, journeymen and masters) and plumbers (residential, journeyworker and master), each with continuing education requirements, and the Department of Agriculture licenses commercial pesticide applicators, which covers anyone applying weed or insect control for hire. Most other home-service work, such as general building, roofing or handyman jobs, is licensed, if at all, by cities or counties. Check with the building department in every city you plan to serve before you bid.

• Colorado State Electrical Board (Division of Professions and Occupations): Residential wiremen, journeyman and master electricians
• Colorado State Plumbing Board (Division of Professions and Occupations): Residential, journeyworker and master plumbers
• Colorado Department of Agriculture, Pesticide Applicator Licensing: Commercial pesticide applicators applying for hire ($350 license fee as listed in October 2026)

Workers' compensation

Colorado's Division of Workers' Compensation requires employers to carry workers' compensation insurance if they have one or more employees, whether full-time, part-time or family members, and anyone paid for their work is presumed to be an employee. Coverage comes from a commercial insurance carrier authorized in Colorado, or by qualifying to self-insure. A new rule matters for anyone working on larger jobs: as of May 29, 2026, under Senate Bill 26-093, anyone applying for a building or construction permit on a project costing over $1 million must file a declaration with the local permitting agency confirming that all workers under the permit have valid workers' compensation coverage.

More on coverage: business insurance for contractors.

Sales tax on services

The Colorado Department of Revenue's Sales Tax Guide says Colorado taxes retail sales of tangible personal property and, in general, not services, except for a short list of services specifically taxed by law (such as telephone service). The catch is bundling: charges for an otherwise nontaxable service can become taxable when they are part of a sale of goods. Contractors should read the Department's FYI Sales 6, Contractors and Retailer-Contractors. The state rate is 2.9%, the Department also collects many city, county and special district taxes, and certain home-rule cities collect their own sales tax and require their own license.

Recording business calls in Colorado

C.R.S. § 18-9-303 makes it a crime to record a phone or electronic communication without the consent of either a sender or a receiver, which lets a business owner record calls they take part in. For callers in all-party states, play a short notice first; our call recording guide covers the details.

See our guide to recording business calls before you turn on call recording or an AI receptionist.

How the seasons shape the work

Colorado's Front Range swings fast: spring and summer hail storms bring roofing, gutter and siding work, while the dry climate and big temperature swings stress exterior paint and concrete. Snow removal runs from fall into late spring along the Front Range and longer in the mountains, where short summers compress exterior projects into a few months. Wildfire risk in the foothills and mountains adds defensible space clearing and smoke cleanup to the summer and fall calendar.

Two sales tax systems, depending on the city

The Department of Revenue states that it does not administer or collect the sales taxes of certain home-rule cities, which run their own. If you sell taxable goods or bundle them with services in one of those cities, you register and file with the city as well as the state. Use the Department's publication Colorado Sales/Use Tax Rates (DR 1002) to see which local taxes the state collects for you.

Then set up the back end that gets you hired

The paperwork makes you legal. Customers still have to find you, reach you and pay you. Before your first job, set up a business phone number, email on your own domain, a Google Business Profile, a simple website, and a way to send quotes and take card payments. The launch checklist lays out the order.

Colorado questions