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?
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
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
Forty-four states levy a corporate income tax, with top rates ranging from a 2.25 percent flat rate in North Carolina to a 11.5 percent top marginal rate in New Jersey.
7 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?
12 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 24 percent of combined state and local tax collections.
17 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
However states choose to respond to other tax provisions of the One Big Beautiful Bill Act, they should conform to the pro-growth provisions, which represent a marked improvement in the corporate tax code.
12 min read
However well-intended they may be, sales tax holidays remain the same as they always have been—ineffective and inefficient.
16 min read
The One Big Beautiful Bill’s changes to the taxation of international income have surprising implications for state codes, yielding tax increases and a revised tax base that, through quirks of state incorporation, bears very little resemblance to the federal base and almost nothing of its purpose.
10 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 24 percent of combined state and local tax collections.
17 min read
Summer has arrived, and states are beginning to implement policy changes that were enacted during this year’s legislative session (or that have delayed effective dates or are being phased in over time).
28 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.
7 min read
In the United States, taxes are the single most expensive ingredient in beer. The tax burden accounts for more of the final price of beer than labor and materials combined—the many different layers of applicable taxes combining to total as much as 40.8 percent of the retail price.
6 min read
The House tax and spending bill leaves in place a long-standing provision that exempts credit unions from federal and state income tax, allowing them to compete unfairly with banks and, increasingly, to buy them.
6 min read
The significant disparity in tax rates across states underscores the complex tax and regulatory environment governing distilled spirits.
6 min read
As the US House hashes out its “One, Big, Beautiful Bill,” statehouse lawmakers are watching closely, given the impact of both its tax and spending provisions on state budgets.
12 min read