Colorado voters yesterday rejected Proposition 103, which would have raised $2.9 billion between 2012 and 2016 by raising the state income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. from 4.63% to 5% and the state sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. from 2.9% to 3% for five years.
36.3% voted yes while 63.6% voted no.
As we noted earlier this week:
While Colorado’s current state sales tax rate seems paltry at 2.9 percent, Tax Foundation analysis finds that once local sales tax rates are accounted for, Colorado has one of the higher sales tax rates in the country. The combined state and average local sales tax rate in Colorado is 7.48 percent, 15th highest in the nation. Colorado’s total state and local tax burden per capita for 2009 (the latest data available) was 18th in the nation, at $4,011.
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