Coming to Colorado
We’re still checking Colorado’s rules against the current law, so the packet isn’t on sale yet.
Tell me when it’s readyWhat Colorado expects from a new trade business
Colorado licenses electricians and plumbers at the state level and leaves general contractors to each city or county, so what you need changes when you cross a town line. Lien deadlines are short and run on months. And if your sub has no comp, the law can make you pay for their injuries.
Electricians and plumbers at the state, everyone else by the city
The state's Division of Professions and Occupations (DORA) runs the State Electrical Board and State Plumbing Board. They license electricians and plumbers at master, journeyman and residential levels, plus electrical and plumbing contractors.
General contracting is handled locally. Denver, for example, issues its own contractor licenses, starting with a supervisor certificate, and its electrical and plumbing contractors also need a current state contractor card. Other cities and counties set their own rules, and a handyman's limits depend on where you work.
Call the building department in each town before you bid. A construction attorney can help if you work across several.
Source: C.R.S. 12-115-110, electrical license qualifications · C.R.S. 12-155-110, plumbing licenses · DORA, Division of Professions and Occupations occupational list · City and County of Denver, contractor licensing
Who to call: an attorney near you
Your uninsured sub can become your comp claim
Colorado reads this one broadly. Anyone who performs services for pay counts as an employee unless they're free from control and customarily run their own independent business. The statute lists tests for showing that, and a written document can help prove it.
If you contract out any of your work, you can be the statutory employer of those contractors, subs and their crews, regardless of the number of employees. You're liable for their comp and you insure against it, unless they carry their own.
A corporate officer or LLC member can reject coverage by sending written notice on the state's form by certified mail. An uncovered sole proprietor or an officer who has rejected has no comp claim of their own.
Go uninsured and the state can order you to stop operating and fine you by the day, up to $250 a day on a first violation and $250 to $500 after that. An insurance agent who writes contractors can walk you through it.
Source: C.R.S. 8-40-202, employee · C.R.S. 8-41-401, contracting out work · C.R.S. 8-41-202, rejection of coverage · C.R.S. 8-43-409, uninsured employers
Who to call: an insurance agent near you
Getting paid: months, not days
Colorado's mechanic's lien deadlines run on a short calendar:
- Notice of intent goes to the owner and the prime contractor at least 10 days before you file the lien statement, by personal service or registered or certified mail.
- File the lien statement with the county clerk and recorder within 4 months after your last labor or materials.
- Day or piece laborers who supply no materials get 2 months after the building is completed.
- Sue to enforce within 6 months after the last work or completion, as the statute lays out. Past that, the lien no longer holds the property.
- Existing single-family and owner-occupied homes: if the owner has already paid enough to the prime contractor or a sub, that's a defense to your lien.
On a home, a sub can do everything right and still lose. A construction attorney can set up your forms.
Source: C.R.S. 38-22-109, lien statement · C.R.S. 38-22-110, action within six months · C.R.S. 38-22-102, payments and owner defense
Who to call: an attorney near you
Sales tax: how you write the contract decides it
Colorado splits it by contract type:
- Lump-sum contract (one price, materials not split from labor): you're the consumer of the materials. You pay sales tax when you buy, or use tax if the seller didn't collect it.
- Time-and-materials contract (materials priced apart from labor): you're the retailer. You don't pay tax buying the materials, but you collect tax from the customer on the marked-up price and send it in. This takes a sales tax license.
Equipment and supplies you use in your work are taxed to you either way. A building permit can affect local tax on your materials but not the state tax. Colorado has many local jurisdictions, so a CPA who works with contractors is worth the call.
Source: Colorado DOR, FYI Sales 6: Contractors and Retailer-Contractors
Who to call: a CPA or tax pro near you
LLC: $50 to form and $25 a year
You form an LLC online with the Colorado Secretary of State for $50. A $25 periodic report comes due every year around your anniversary month. It has a window of two months either side, then a $25 late fee, then delinquency and possible dissolution. No franchise tax.
Profit on a typical LLC lands on your personal return, taxed at Colorado's flat 4.4% under current law. The November 2026 ballot carries measures that could change that starting in tax year 2027, so check the result. When an S-corp election pays off is a numbers question for a CPA who works with contractors.
Source: Colorado Secretary of State, business home · Colorado DOR, individual income tax guide · Colorado Legislative Council, 2026 ballot information booklet
Who to call: a CPA or tax pro near you
Education, not legal or tax advice. Rules change. Confirm anything here with a licensed pro in Colorado before you rely on it. Last updated November 2026.