When you sell a business in Colorado, the whole gain is taxed at the flat 4.4 percent rate for 2025, short-term or long-term. Colorado has no occasional-sale exemption, so the equipment and other tangible property in an asset sale draw sales tax.
Colorado sits in the middle of the states by number of employer businesses. The state's cut of the gain is modest, 4.4% at the top. Little else gets in the way of the sale.
Today
Where you stand
Colorado runs on small firms: more than 700,000 of them employ nearly half the state.
counted in the SBA's 2024 state profile, 99.5 percent of all firms.
people employed by small firms, 47.5 percent of Colorado employees.
The elements this touches
The deal team on what changes when you sell a business in Colorado.
Before the letter of intent
What Colorado takes
A flat 4.4 percent applies to the whole gain, short or long; the former $100,000 subtraction for long-held Colorado assets expired after tax year 2021.
A founder on film
On what he learned about tax on the way to the sale.
Lewis Titus Wastewater purification and manufacturing · Wyoming
Colorado taxes capital gains as ordinary income at its flat 4.4 percent rate for 2025, with no holding-period preference.
Colorado once allowed a $100,000 subtraction for gains on assets held more than five years and acquired before 2009; it expired after tax year 2021.
The rate is the state's top rate on the gain for the year shown, the same figure as the indicator in the hero, so the two can never disagree.
The elements this touches
Under contract and at closing
The rules of the sale
The state taxes the assets themselves in an asset sale, and a 2025 law narrowed sale-of-business non-competes.
Colorado has no occasional-sale exemption, so tangible personal property in an asset sale is a taxable retail sale under C.R.S. 39-26-104.
Lyons Gaddis, P.C.
SB 25-083, effective August 6, 2025, leaves majority owners' sale non-competes uncapped but limits minority owners who got equity as compensation to a consideration-to-pay formula.
Otten Johnson, 2025
The elements this touches
One thing you would not guess
Colorado charges sales tax on the trucks, machines and furniture in an asset sale; no occasional-sale exemption applies.
Sellers often assume equipment already taxed once is not taxed again, but a Colorado asset sale is a retail sale and sales tax is due.
When the process opens
Who buys
Colorado's economic development office counted a 2025 startup sale among the state's notable deals.
The state's economic development office listed the sale of Mindful Mamas, a Colorado maternal mental health startup, to Otsuka Precision Health among 2025's notable deals.
Colorado Office of Economic Development and International Trade, 2025
The elements this touches
Day 0, and the years after
After the close
Colorado lets a trust run for 1,000 years, so a seller can build a dynasty trust at home rather than in another state.
Proceeds land. What the state keeps of them is settled above; what it lets them do from here is below.
In 2006 the General Assembly set a 1,000-year vesting period for trust interests, all but abolishing the rule against perpetuities.
Post-exit planning is the third act of the same engagement, done with outside experts, and it starts before the letter of intent, when a move or a trust can still change the answer.
FNDRSThe elements this touches
People who walked it
Founders
From founders elsewhere
No founder in Colorado is quoted yet. These are founders in other states, quoted word for word, each described by role and state.
“I definitely don't think we'd be in the same spot without you guys.”
Founders in Colorado
Short testimonials from owners who went through the FNDRS process. Most are under two minutes.
Nearby
| West | Tax on the gain | Complexity | Deal volume |
|---|---|---|---|
| Alaska | None 2025 | Very low | Very low |
| Arizona | 2.5% 2025 | Medium | High |
| California | 13.3% 2025 | Medium | Very high |
| Hawaii | 7.25% 2025 | Medium | Low |
| Idaho | 5.3% 2025 | Medium | Low |
| Montana | 4.1% 2025 | Low | Very low |
| Nevada | None 2025 | Medium | Low |
| New Mexico | 5.9% 2025 | Medium | Low |
| Oregon | 9.9% 2025 | High | Medium |
| Utah | 4.5% 2025 | Medium | Medium |
| Washington | 9.9% 2025 | High | High |
| Wyoming | None 2025 | Low | Very low |
Your next step
Know where you stand in fifteen minutes, or talk the Colorado sale through with a dealmaker. Either way, no pitch and no obligation.
No pitch and no obligation. If the honest answer is not yet, we will say so, and say what to work on.