| Agency | El Paso County Assessor's Office |
|---|---|
| Form or step | Business personal property declaration schedule (DS 056 for most businesses) |
| Timing | Values are set as of January 1; the declaration is due April 15 |
Watch for this: Selling midyear does not cancel the bill for that year. Decide in the purchase agreement who pays it.
What the County Taxes
Each year the El Paso County Assessor values the business personal property used in the county. That means furniture, computers, machinery, tools, signs, leasehold improvements and similar items, as opposed to land and buildings.
Owners report it on a declaration schedule. Most businesses use the form the county numbers DS 056. Values are measured as of January 1, and the declaration is due April 15. The county lets owners file online.
The Small Business Exemption
Colorado exempts businesses whose total business personal property in a county is worth $56,000 or less for the 2025 and 2026 tax years. Those owners do not need to file.
The exemption is all or nothing. If the total is above the limit, all of it is taxable, including the first $56,000. The limit is adjusted from time to time, so check the current figure with the Assessor before you rely on it.
How a Sale Changes Things
The tax is based on who owned the property on January 1. If you sell in June, the bill for that year was set when you still owned the equipment. Colorado property tax is paid the following year, so the bill may arrive after you have already left the company.
That is why most purchase agreements prorate personal property tax between buyer and seller by the closing date. Ask your attorney to spell it out. Leaving it vague invites an argument a year later.
Steps for the Seller
- Pull your last two declarations and confirm they match your fixed asset list.
- File the declaration on time in the year of the sale, even if closing is near.
- Agree on proration of the current year's tax in the purchase agreement.
- Tell the Assessor about the change in ownership after closing so future notices go to the buyer.
Penalties and Audits
The county's own materials say that property left off a declaration can draw an added penalty of 25 percent of the undisclosed value. The Assessor may also audit a business whether or not it filed.
A buyer doing due diligence may notice equipment on your books that never appeared on a declaration. Fixing that before you go to market is easier than explaining it during a deal.
Equipment Lists Help the Sale Too
The same list you give the Assessor helps buyers and lenders. An SBA lender often wants an equipment list with rough ages. Our guide on getting your books ready for a business sale covers the rest of the records buyers request.
How the price is split between equipment and goodwill also matters for tax. Your CPA should look at that before signing, since it affects both your income tax and the buyer's depreciation.
Sources and Next Steps
The El Paso County Assessor's personal property pages and brochure and the Colorado Division of Property Taxation describe the declaration and the exemption.
This is general information, not tax or legal advice, so confirm your situation with your CPA or attorney.
Related filings include the Colorado Springs sales tax license and the Colorado tax status letter. To see what your company might bring, request a confidential valuation.