Annual Report and Tax Requirements for Colorado LLC

Learn about the annual report and tax filing obligations for Colorado limited liability companies.

To establish and operate a Colorado limited liability corporation (LLC), you must prepare and submit a number of paperwork with the state. This article discusses the most significant Colorado LLC continuing reporting and state tax filing obligations.

Annual (Serial) Report

The state of Colorado requires you to submit an annual periodic report for your LLC. The report must be filed online at the SOS website. The report is due within three months of the first day of the anniversary month of your LLC’s incorporation. For instance, if you founded an LLC on June 15, the report is required each year between June 1 and August 31. You may also submit the report two months ahead of schedule. The filing cost is now $10. There is also a $50 penalty cost for late reporting.

State Corporation Tax

Most LLCs are pass-through tax corporations when it comes to income taxes. In other words, the burden for paying federal income taxes is passed via the LLC to the individual LLC members. LLCs do not pay income taxes by default; only its members do. Some states charge LLCs a separate tax or fee for the privilege of conducting business in their jurisdiction. Colorado, on the other hand, is not one of those states.

However, in certain situations, the owners of an LLC elect to have their firm taxed as if it were a corporation. This decision is made by submitting IRS Form 2553 to the IRS. (The form is available on the IRS website.) When an LLC elects to be taxed as a corporation rather than as a pass-through entity, the firm must submit a separate tax return. Colorado, like virtually every other state, taxes corporate revenue. The company income tax in Colorado is presently 4.63% of taxable income (in limited cases an alternative tax is available). The tax is due to the Department of Revenue in the state (DOR). To pay the tax, use Form 112 of the state’s company income tax return.

Employer Taxes in the State

Do you have workers in your LLC? If this is the case, you must pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not addressed in this section. (However, it is important to understand that federal employer tax duties begin with getting a federal employer identification number (EIN).) However, Colorado employers must additionally pay state taxes.

To begin, you must withhold and pay employee income taxes to the DOR. Begin by registering your company with the DOR, either online or in print form (Form CR). After you’ve enrolled, you must submit withholding taxes on a regular basis—weekly, quarterly, or monthly. Each year, you must additionally utilize Form DR 1093 and/or Form DR 1106 to reconcile your LLC’s tax withholding.

You’ll also need to register to pay state unemployment insurance (UI) taxes. The Colorado Department of Labor and Employment is in charge of these taxes (CDLE). Unless you are ineligible, you should register for these taxes online. If you are, you should download and utilize Form UITL-100 (Application for Unemployment Insurance Account). Then, each quarter, utilize Forms UITR-1 and UITR-1 or submit online to record your salary and pay your unemployment insurance taxes.

Taxes on Sales and Use

If your LLC sells items to clients in Colorado, you must collect and remit sales tax. This implies you’ll have to register with the Department of Revenue for this reason and then make periodic sales tax payments for products sold. You may sign up online or by mail using Form CR 0100AP (Colorado Sales Tax Withholding Account Application). After you register, you will get a sales tax license. Then, on a monthly, quarterly, or yearly basis, you must file sales tax reports to the DOR. This is possible on paper (Form DR 0100, Colorado Retail Sales Tax Return).

Other States Registration

If you want to do business in states other than Colorado, your LLC may need to be registered in any or all of those states. The exact states concerned will determine if you are needed to register: each state has its own regulations for what defines conducting business and whether registration is required. For registration reasons, having a physical presence (a business location) in a state, recruiting personnel in a state, or soliciting business in a state (through telephone, print advertisements, mail, or the Internet) are sometimes considered conducting business. Obtaining a certificate of authority or comparable document is normally required for registration.