Tax Compliance for Colorado Restaurants

Tax codes and regulations are complicated but it’s crucially important that you understand how to comply with the rules — and how to benefit from any available exemptions, credits, or deductions.

The guides and resources below will help get you started.

Note: The CRA Compliance Center Concierge is a tool to help you understand compliance requirements for restaurants.

The information provided through the Concierge is generalized in nature and may not address or account for information specific to your situation. It is not legal advice. For legal questions, you should consult a lawyer.

You can also reach out to info@corestaurant.org for further information, including for connections to attorneys, CPAs, and other professionals who serve our industry.

Did You Know?

Members get 15 minutes of free legal and CPA advice per month per legal and CPA partner!

To access these member-only resources and set up a call with one of our partners, please email us at info@corestaurant.org. Please provide a short explanation of what you need so we can connect you with the right partner.

Tax Breaks, Credits & Refunds

One of the CRA’s primary advocacy goals is to support and pass legislation that provides tax relief for Colorado restaurants.

In 2026, we were successful in securing two separate tax breaks that can save restaurants thousands of dollars!

Check out the Utilities Sales Tax Deduction and Sales Tax Holidays sections below for all you need to know to cash in on these new laws. If you have questions or need any help, let us know at info@corestaurant.org.

Utilities Sales Tax Deduction

This tax deduction can save Colorado restaurants thousands of dollars annually!

The Utilities Sales Tax Credit allows you to deduct from your taxable sales a portion of your utility costs (electricity, gas) used to produce food. The CRA secured this tax credit for local restaurants after extensive negotiations with the Colorado Department of Revenue — please don’t leave this money on the table!

For 2026 and prior years: You can claim a 55% annual tax deduction based on the cost of gas/electricity used to produce food at your business.
- If you’ve never claimed this deduction before, you can back-file for up to three years. Don’t wait! Ask your account to help you file or get in touch with us at info@corestaurant.org.
For 2027 and future years: This deduction goes up to 100% in 2027, and that change is permanent, thanks to the CRA’s advocacy work in 2026.

Utility Sales Tax Deduction // Form DR-1465

Download form and instructions

New & Emerging Industries Apprenticeship Tax Credit

The New & Emerging Industries Apprenticeship Tax Credit was created by HB24-1439 Financial Incentives Expand Apprenticeship Programs to encourage the adoption and expansion of Registered Apprenticeship Programs in the New & Emerging Industries.

The tax credit is a refundable state income tax credit that employers of Registered Apprenticeship Programs in Colorado can claim for apprentices in “New & Emerging” occupations, including restaurants and hospitality businesses.

The Reservation Application for the New & Emerging Industries Apprenticeship Tax Credit is now available!

Read the Frequently Asked Questions (PDF) to learn more about the eligibility and how to prepare.

Questions about the Apprenticeship Tax Credit can be sent directly to apprenticeshiptaxcredit@state.co.us.

FICA Tip Credit for Employers

If you are a food and beverage employer with tipped employees, you may be eligible to claim the Federal Insurance Contributions Act (FICA) Tip Credit.

The credit lets you reduce your taxable business income by the amount you pay for the employer share of the Social Security and Medicare taxes (FICA tax) on certain employee tips. The employer share of the FICA tax is currently 7.65%.

The FICA Tip Credit is a non-refundable, general business tax credit. Unused credits can be carried back for one year or carried forward for up to 20 years.

Who’s eligible

If you’re an employer with a food or beverage business where tipping is customary, you’re eligible for the FICA Tip Credit if:

Your employees receive tips from customers for providing, delivering, or serving food or beverages
You paid or incurred employer social security and Medicare taxes on those tips during the tax year

The credit is available whether or not the employee reports those tips on their own tax return. This translates to a credit for all the tips your employees report, which can add up to real money!

LET ADESSO HELP

Our partners at Adesso can help you get this money back so you can reinvest in your business and your team. Get in touch with them and learn more here.