Doing business in Denver: city taxes on top of state filings

The stack

• OPT applies to anyone earning $500 or more in a month for work performed in Denver: residents or not.
• Hitting $500 on any day triggers the tax for the whole month; it isn’t prorated.
• Remote Denver hires create Colorado nexus and payroll registration for out-of-state employers.

The occupational privilege tax

Denver’s OPT is a flat monthly charge, not a percentage. For each employee who earns at least $500 in a calendar month for work done in Denver, the employer pays $4 and withholds $5.75 from the employee. Employers register with Denver’s Treasury Division and file OPT returns monthly or quarterly.

Colorado state layer

Colorado taxes C-corporations and individuals at a flat 4.4%, apportioned by a single sales factor for multistate businesses. Colorado LLCs and corporations file a periodic report with the Secretary of State each year (a small fee), and employers also contribute to Colorado’s FAMLI paid-leave program.

Worked example

A 20-person company with its whole team working in Denver pays 20 × $4 × 12 = $960 a year of employer OPT and withholds $1,380 from staff. It’s small in dollars but easy to miss: out-of-state payroll systems often don’t set it up automatically for a first Denver hire.

The state layer underneath

City taxes sit on top of state obligations, never instead of them. For the CO side, see remote workers and nexus, and check whether a hire or customer in Denver creates a filing duty in the nexus checker.