Colorado: The Centennial State

Colorado is centrally located in the United States, with a slight western bias. The state is surrounded by seven others and is traversed by the Rocky Mountain range. With an average altitude of over 2,000 meters, the almost 270,000 km² large state is the highest in the USA. According to ehuacom, almost three million people live in the metropolitan area of ​​the capital Denver, which is more than half of the total population of a good 5.5 million.

International companies from around the world have chosen Colorado as a destination for foreign direct investment. One of the main reasons is certainly the strategically favorable location, which has many advantages. Colorado forms the center of the cross Canada and Mexico to the north and south and Tokyo and Frankfurt to the east and west. Also worth mentioning is the Mountain Time Zone (which allows business communication throughout the day). The basic requirements for communication and serving markets worldwide are therefore ideal.

Ten of the Fortune 500 companies are headquartered in the Centennial State. Colorado has become the North American home for many other global players. Examples include Karcher, Partners Group and Pilatus.

Colorado Location Map

ECONOMIC FREEDOM

Compared to cities on the east and west coasts, Colorado scores with low cost of doing business. The state also offers many performance-related incentives. The Simon Fraser Institute ranks Colorado second nationally for economic freedom. Third place for the “Centennial State” also jumps out when it comes to freedom of the labor market. There is another second place in the assessment of the Pacific Research Institute for the relative process loads for workplaces and companies.

CENTRAL PART OF A GLOBAL NETWORK

Colorado’s transportation and infrastructure is exceptional. Denver International Airport is not only a top-class airport, it is also one of the world’s busiest annual passengers.

The Centennial State is a nationally important transportation hub for the Interstate Highways I-25, I-70 and I-76. The BNSF Railway and Union Pacific Railroad have a network that spans thousands of miles of track.

Transportation and infrastructure are an important catalyst for the local economy. Companies can take advantage of the excellent conditions and easily reach their customers worldwide.

TOP CLASS EDUCATION SYSTEM

Colorado consistently tops the charts for job and economic growth and is recognized as one of the top places to do business in the United States. The quality of the workforce also ranks seamlessly in the top positions.

Nearly 40 percent of Colorado residents have at least a bachelor’s degree, which is the second best rate nationally. Access to top universities and training programs is also high, as is access to federal institutions in the fields of science, research and technology.

The ideal living conditions with 300 days of sunshine per year contribute to the fact that many students find their new home in Colorado. Colorado is one of the “Best States to Live” and Boulder even ranks first in the city rankings nationally (US News and World Report, 2021). The graduates become part of the talent pool, which is among the best in the country and stands for inspiring creativity and dynamism.

With its business-friendly environment, highly-skilled workforce and variety of progressive industries, Colorado offers a stable framework for your entrepreneurial success.

COLORADO INCOME TAX

Colorado charges an income tax of 4.55%. In addition, federal income taxes are payable.

COLORADO CORPORATE INCOME TAX

Colorado has a corporate income tax rate of 4.63%. In addition, federal corporation tax is payable.

COLORADO SALES TAX

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales tax rate in Colorado

The sales tax in Colorado is 2.9% at the state level. Municipalities or districts charge an average of 4.75% sales tax. Combined, an average of 7.65% is due.

Colorado Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date :

December 1, 2018

Transactions included:

Retail sales of tangible personal property, goods or services shipped into US states are included in the threshold

Treatment of tax-exempt transactions:

Exempt sales and services are included in the threshold, with the exception of wholesale

Reason:

Before April 1, 2019: Revenue or transaction volume

As of April 1, 2019: Sale only

Sales/Transactions Threshold:

Before April 1, 2019: $100,000 or 200 transactions

As of April 1, 2019: $100,000 (The transaction threshold is eliminated)

Evaluation period:

The threshold applies to the previous or current calendar year

Extra information:

  • Out-of-state sellers who have yet to do so must also collect and remit applicable local and special county sales taxes, which are then collected by the state. Sellers selling in cities that do not have a state sales tax in the United States should contact those cities directly to learn more about their requirements.
  • US state sellers who do not meet the state’s Economic Nexus threshold should source sales based on their location. Colorado companies that meet the economic threshold must use target sourcing for all sales within 90 days of reaching the threshold.
  • Registration Requirements : Colorado requires a remote business to register and collect Colorado sales tax by the first day of the first month beginning at least 90 days after the threshold is exceeded. See the Sales Tax Guide (page 11) for more information.
  • HB19-1240
  • Colorado Department of Revenue

Colorado Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

October 1, 2019

Economic Nexus Threshold:

At least $100,000 in retail sales in Colorado in the current or prior calendar year. When calculating the threshold:

  • Remote sellers should exclude sales made through a marketplace
  • Marketplace intermediaries should include all sales made through the platform

Registration requirements:

  • Remote Multichannel Sellers: You must register and collect Colorado Use Tax on sales that are not taxed by a Marketplace Agent once you cross the Economic Nexus Threshold.
  • Remote Marketplace Sellers: You may not need to register with the state if you cross the Economic Nexus Threshold. Contact the Colorado Department of Revenue (DOR) for more information.
  • In-State Multichannel Sellers: You must register with the Colorado DOR and collect taxes on sales that are not taxed by a marketplace intermediary.
  • State Marketplace Sellers: You must register. Contact the Colorado DOR for more information.
  • Self acceptance jurisdictions may have different requirements.