How does Colorado’s tax code compare? Colorado has a flat 4.40 percent individual income tax rate. There are also jurisdictions that collect local wage taxes. Colorado has a 4.40 percent corporate income tax rate. Both the individual and corporate income tax rates may be retroactively reduced to 4.25 percent if the state meets revenue targets.
Colorado also has a 2.90 percent state sales tax rate and an average combined state and local sales tax rate of 7.86 percent. Colorado has a 0.50 percent effective property tax rate on owner-occupied housing value.
Colorado does not have an estate tax or inheritance tax. Colorado has a 29.18 cents per gallon gas tax rate and a $2.24 cigarette excise tax rate (per pack of 20 cigarettes). The State of Colorado collects $7,263 in state and local tax collections per capita. Colorado has $12,739 in state and local debt per capita and a 75 percent funded ratio of public pension plans. Colorado’s tax system ranks 33rd overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Colorado is no exception. The first step toward understanding Colorado’s tax code is knowing the basics. How does Colorado collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2025: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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