Colorado has a flat 4.40 percent individual income tax rate. Colorado has a flat 4.40 percent corporate income tax rate, a 2.90 percent state sales tax rate, and an average combined state and local sales tax rate of 7.89 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’s gas tax is 29.18 cents per gallon and its cigarette excise tax is $2.24 per pack of 20 cigarettes.
Colorado raises tax revenue primarily through property taxes (32.9 percent of total state and local tax revenue), general sales taxes (29.7 percent), and individual income taxes (17.0 percent). Colorado collects $6,780 in state and local tax collections per capita, carries $13,133 in state and local debt per capita, and has a 78 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. Use the tabs below to compare Colorado taxes with other states and to see how Colorado raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: 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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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
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?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
The vaping industry has grown rapidly in recent decades, becoming a well-established product category and a viable alternative to cigarettes for those trying to quit smoking. US states levy a variety of tax structures on vaping products.
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Notably, the OBBBA makes permanent the individual tax changes first put in place by the TCJA, which avoids a tax hike on an estimated 62 percent of tax filers in 2026.
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Coming into 2026, several states are eyeing new or increased Alternative Tobacco Product (ATP) taxes.
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As states grapple with taxing the evolving tobacco and nicotine market, policymakers should carefully consider the tax mix they implement.
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?
9 min read
State lawmakers around the country have begun their legislative sessions, and many are considering tax reform. This piece highlights some of the areas on which they are likely to focus.
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Lawmakers in many states continue to pursue additional income tax relief, while their counterparts elsewhere pursue the opposite goal.
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One area of the tax code in which extreme complexity and low compliance go hand-in-hand—and where reform is desperately needed—is in states’ nonresident individual income tax filing and withholding laws.
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While the CEA’s analysis of the benefits of reduced reliance on income taxes is sound, its revenue replacement estimates are not. The actual revenue replacement rate could be as high as 17.51 percent.
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Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
