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 income taxes. Colorado has a 4.40 percent corporate income tax rate. Colorado also has a 2.90 percent state sales tax rate and an average combined state and local sales tax rate of 7.81 percent. Colorado has a 0.45 percent effective property tax rate on owner-occupied housing value.
Colorado does not have an estate tax or inheritance tax. Colorado has a 29 cents per gallon gas tax rate and a $1.94 cigarette excise tax rate. The State of Colorado collects $6,387 in state and local tax collections per capita. Colorado has $11,972 in state and local debt per capita and has a 71 percent funded ratio of public pension plans. Colorado’s tax system ranks 32nd overall on the 2025 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 towards 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 2024: How Does Your State Compare?
Subscribe to get insights from our trusted experts delivered straight to your inbox.
Subscribe
Get facts about taxes in your state and around the U.S.
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.
115 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
24 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
8 min read
Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
7 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
9 min read
When Coloradans go to the polls this November, they will be given the opportunity to permanently lower their income taxes—or to increase those tax burdens.
4 min read
IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.
12 min read
When examining tax burdens on businesses, it is important to consider both federal and state corporate taxes. Corporate taxes are one of the most economically damaging ways to raise revenue and are a promising area of reform for states to increase competitiveness and promote economic growth, benefiting both companies and workers.
3 min read
Some tax ballot initiatives will be straightforward, some will be complex, and—let’s be honest—some will be a drafting nightmare.
5 min read
Property taxes are the primary tool for financing local government and generating state-level revenue in some states as well.
5 min read
The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.
29 min read
The FDA’s proposal to ban flavored cigars would carry significant revenue implications for many state governments.
7 min read
While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts.
12 min read
Among the 46 states that held legislative sessions this year, structural state tax reform and temporary tax relief measures were recurring themes.
13 min read
If the policy goal of taxing cigarettes is to encourage cessation, vapor taxation must be considered a part of that policy design.
4 min read