Tax policy in Colorado

in Colorado

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Tax policy in Colorado

Tax rates in 2017

Personal income tax: 4.63%

State sales tax: 2.90%

Corporate income tax: 4.63%

Tax revenues in 2016

Total tax collections: $12.80 billion

Tax collections per capita: $2,309

Total state expenditures • State debt • Colorado state budget and finances

Colorado generates the bulk of its tax revenue by levying a personal income tax and a sales tax. The state derives its constitutional authority to tax from Article X of the state constitution.^[1][2]

Tax policy can vary from state to state. States levy taxes to help fund the variety of services provided by state governments. Tax collections comprise approximately 40 percent of the states' total revenues. The rest comes from non-tax sources, such as intergovernmental aid (e.g., federal funds), lottery revenues and fees. The primary types of taxes levied by state governments include personal income tax, general sales tax, excise (or special sales) taxes and corporate income tax.^[3]

Tax rates

Personal income tax

See also: Personal income tax

Colorado utilized a flat personal income tax rate of 4.63 percent in 2017.^[4]

The table below summarizes personal income tax rates for Colorado and neighboring states in 2017.^[4]

Personal exemptions

States that collect a personal income tax allow individuals to claim personal exemptions on income taxes each year. The personal exemption indicates that only a person's income above a certain level is subject to taxation. ^[5]

Exemptions work by reducing the amount of an individual's taxable income. Both state and federal taxes allow exemptions. The state exemptions for Colorado and its neighboring states as reported by the Tax Policy Center are reported in the chart below.^[6]

Capital gains tax

See also: Capital gains tax

A capital gains tax is a tax levied on the profit gleaned from the sale of a capital asset. Examples of capital assets include stocks, businesses, land parcels, homes, personal items and more. Capital gains are taxable at both the federal and state levels. While the federal government taxes capital gains at a lower rate than regular personal income, states usually tax capital gains at the same rates as regular income. ^[7][8][9]

The table below summarizes uppermost capital gains tax rates for Colorado and neighboring states in 2015.

Sales tax

See also: Sales tax

Almost all states employ a statewide sales tax, which ranges from 2.9 percent in Colorado to 7.25 percent in California. Additionally, many states allow the levying of local sales taxes, which are then added to the state's tax.

Colorado's state sales tax was 2.90% percent in 2017. The average local tax was about 4.60% percent, meaning that the average combined sales tax was about 7.50% percent. The table below displays the state tax rates, average local tax rates, and average combined tax rates for Colorado and its neighboring states.^[10]

The table below summarizes sales tax rates for Colorado and neighboring states in 2017 as well as the state's policy with respect to types of items commonly exempted from sales tax (i.e., food, prescription drugs and nonprescription drugs).^[11]

Excise taxes

See also: Excise taxes

Excise taxes, also known as selective sales or differential commodity taxes, are levied for the sales of specific goods or services. Excise taxes are considered indirect taxes because they are not charged directly to individuals. In most cases, the excise tax is paid by the producer or seller of an item. The cost of the tax is then included in the sale price of the item and passed on to the consumer. The tables below provide excise tax rates for motor fuel, alcohol and cigarettes in Colorado and neighboring states.^{[12][13][14][15]}

Corporate income tax

See also: Corporate income tax

Colorado levies a corporate income tax rate of 4.63 percent. The table below compares the corporate income tax rates of some of its neighboring states.^[16][17]

Property tax

See also: Property tax

Most often, property tax applies to real estate, although some states levy property taxes on other types of personal property, such as automobiles. Generally speaking, an individual's property tax liability is determined by the tax rate and the tax base, which is "determined by both the assessed value of the property and ... the share of the assessed value that is subject to tax." To learn more about property taxes, including tabulation methods, see this page. Property tax rates can vary substantially from locality to locality within a state.^{[18][19][20] [18][19]}

The table below provides the mean amount of property taxes paid in 2012, as well as property tax as a mean percentage of home value for 2014, in Colorado and neighboring states.^[18]

The table below lists per capita state and local property tax collections for Colorado and neighboring states for fiscal year 2013.^[21]

Estate and inheritance taxes

See also: Estate and inheritance taxes

Estate and inheritance taxes are levied on the property of deceased individuals (decedents). Generally speaking, an estate tax is applied to the value of a decedent's property and is paid from the estate before distribution to any heirs. By contrast, an inheritance tax is paid by the heir or heirs of a decedent's assets.^[22][23][24]

Colorado does not levy an estate tax, although residents are liable for the federal estate tax. The table below summarizes the estate tax rates for Colorado and neighboring states in 2016.^[24]

Tax revenues

See also: Colorado state budget and finances

The table below breaks down state government tax collections by source in 2016 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2016 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2016 population" and "Per capita collections" have not been abbreviated.^[25]

The table below lists 2016 tax collections by source as percentages of total collections. About 55.6 percent of Colorado's total state tax collections came from income taxes.^[25]

Tax ballot measures

Voting on taxes
Ballot measures
By state
By year
Not on ballot
Local City taxes County taxes School taxes Property taxes Sales taxes Income taxes Other taxes

See also: Taxes on the ballot and List of Colorado ballot measures

Ballotpedia has tracked the following ballot measures relating to taxes in Colorado.

1. Colorado Referendum A, Tourism-Related Sales Tax Measure (1993)
2. Colorado Amendment No. 1, Voter Approval Requirement for State and Local Government Revenue Increases Initiative (1990)
3. Colorado Amendment No. 10, Voter Approval for Taxes Initiative (1976)
4. Colorado Taxation on Petroleum and Motor Vehicles for Roads, Measure 5 (1934)
5. Colorado Tax on Motor Vehicle Ownership, Measure 1 (1936)
6. Colorado Tax on Intangible Property, Measure 1 (1940)
7. Colorado Petroleum and Motor Vehicle Taxes, Measure 8 (1926)
8. Colorado 20-Mill Tax Rate Limit, Measure 3 (1936)
9. Colorado General Assembly Empowered to Provide Taxes for Public Schools, Measure 5 (1932)
10. Colorado Voters to Impose or Approve Excise Taxes, Measure 4 (1934)
11. Colorado General Assembly Empowered to Provide for Income Tax, Measure 4 (1936)
12. Colorado Repeal Chain Store Tax, Measure 3 (1938)
13. Colorado Severance Tax on Oil and Gas, Measure 4 (1952)
14. Colorado General Assembly Empowered to Provide Graduated Income Tax, Measure 4 (1932)
15. Colorado Amendment No. 5, Taxation of Property Initiative (1966)
16. Colorado Abolishment of State Tax Commission, Measure 5 (1916)
17. Colorado Amendment No. 7, Food Exempt from State Sales Tax Initiative (1976)
18. Colorado Amendment 1, Voter Approval for Tax and Debt Increases Initiative (1992)
19. Colorado Amendment No. 6, Limits and Voter Approval on Taxes Initiative (1988)
20. Colorado Amendment 35, Cigarette and Tobacco Tax Initiative (2004)
21. Colorado Amendment 21, Tax Cut of $25 Initiative (2000)
22. Colorado Referendum A, Property Tax Exemption for Those Older Than 65 Amendment (2000)
23. Colorado Referendum H, Elimination of Immigrant Income Tax Deduction Measure (2006)
24. Colorado Amendment 32, Taxing Residential Property Initiative (2003)
25. Colorado Amendment 51, Sales Tax Increase for People with Developmental Disabilities Initiative (2008)
26. Colorado Amendment 52, Severance Taxes for Highway Projects Initiative (2008)
27. Colorado Amendment 58, Severance Tax Increase Initiative (2008)
28. Colorado Amendment No. 2, Household Furnishings and Personal Effects Tax Exemption Amendment (1956)
29. Colorado Amendment No. 7, Tax Collection and Exemption Amendment (1954)
30. Colorado Amendment No. 1, Property Tax Assessment Rates Amendment (1982)
31. Colorado Amendment No. 2, Taxation of Mobile Homes Amendment (1976)
32. Colorado Amendment No. 4, State Funding and Approval and New or Increased Taxes Initiative (1986)
33. Colorado Limit on Motor Fuel Taxation, Measure 6 (1932)
34. Colorado Limit on Motor Fuel Tax, Measure 6 (1934)
35. Colorado Amendment 1, Funds for Transportation Improvement Projects Initiative (1997)
36. Colorado Proposal No. 5, Local Retail Tax Initiative (1960)
37. Colorado Amendment 1, Tobacco and Cigarette Taxation Initiative (1994)
38. Colorado Referendum E, Property Tax Reduction of Disabled Veterans Amendment (2006)
39. Colorado Amendment No. 5, Property Tax Exemption for Unpatented Mining Claims Amendment (1988)
40. Colorado Amendment R, Elimination of Property Taxes for Private Use of Government Property Amendment (2010)
41. Colorado Proposition 103, Income and Sales Tax Increase for Education Initiative (2011)
42. Colorado Oleomargarine Tax Increase, Measure 2 (1932)
43. Colorado Amendment 11, Property Tax Exemptions Initiative (1996)
44. Colorado Amendment No. 7, Tax Levies Limits and Maximums Initiative (1972)
45. Colorado Amendment No. 12, Tax Levies and School Financing Initiative (1972)
46. Colorado Amendment No. 2, Taxation of Public Property Amendment (1968)
47. Colorado Proposition AA, Taxes on the Sale of Marijuana (2013)
48. Colorado Tax Increase for Education, Amendment 66 (2013)
49. Colorado State Tax Commission, Measure 24 (1912)
50. Colorado Equalization of Tax Assessments, Measure 15 (1914)
51. Colorado Publication of Measures, Measure 16 (1914)
52. Colorado One-Mill Levy for State Education Institutions, Measure 7 (1920)
53. Colorado Income Tax and Exemptions from Ad Valorem Taxation, Measure 4 (1922)
54. Colorado General Assembly to Enact Motor Vehicle Taxes, Measure 3 (1926)
55. Colorado Property Tax Payer Requirement to Vote on School Bonded Indebtedness, Measure 2 (1928)
56. Colorado Elimination of "Uniformity Clause" and Boards of Equalization, Measure 3 (1934)
57. Colorado License Fees on Chain Stores, Measure 7 (1934)
58. Colorado General Assembly Empowered to Provide Graduated Income Tax, Measure 8 (1936)
59. Colorado Property Tax Exemptions for Churches, Schools and Cemeteries, Measure 9 (1936)
60. Colorado Income Tax to Replace Property Taxes, Measure 4 (1940)
61. Colorado Property Tax Exemptions, Measure 3 (1952)
62. Colorado Proposal No. 3, Income Tax Laws Amendment (1962)
63. Colorado Proposal No. 5, Assessment Value for Taxation Amendment (1962)
64. Colorado Amendment No. 2, Taxation of Mobile Homes and Construction Equipment Amendment (1966)
65. Colorado Amendment No. 7, Aviation Fuel Excise Tax Usage Amendment (1974)
66. Colorado Amendment 17, Income Tax Credit for Parents of Students (1998)
67. Colorado Tax on Nongovernmental Tolls Initiative (2014)
68. Colorado Marijuana TABOR Refund Measure, Proposition BB (2015)
69. Colorado Amendment No. 6, Rocky Flats Nuclear Weapons Conversion Fund Initiative (1982)
70. Colorado Amendment 6, Educational Standards and Funding Initiative (1992)
71. Colorado Referendum D, Unemployment Insurance and Compensation Amendment (1996)
72. Colorado Property Tax Exemption for Veterans with Individual Unemployability Status Amendment (2024)
73. Colorado Amendment 50, Gambling Regulations and Taxes Initiative (2008)
74. Colorado Proposition EE, Tobacco and E-Cigarette Tax Increase for Health and Education Programs Measure (2020)
75. Colorado Proposition HH, Property Tax Changes and Revenue Change Measure (2023)
76. Colorado Property Tax Revenue Cap Initiative (2024)
77. Colorado Tobacco Tax Increase, Amendment 72 (2016)
78. Colorado Proposition II, Tobacco and Nicotine Product Tax Revenue Measure (2023)
79. Colorado Proposition 120, Reduce Property Tax Rates and Retain $25 Million in TABOR Surplus Revenue Initiative (2021)
80. Colorado Proposition 119, Creation of Out-of-School Education Program and Marijuana Sales Tax Increase Initiative (2021)
81. Colorado Amendment B, Gallagher Amendment Repeal and Property Tax Assessment Rates Measure (2020)
82. Colorado Proposition 116, Decrease Income Tax Rate from 4.63% to 4.55% Initiative (2020)
83. Colorado Proposition 117, Require Voter Approval of Certain New Enterprises Exempt from TABOR Initiative (2020)
84. Colorado Tax on Luxury Real Properties Initiative (2024)
85. Colorado Property Tax Valuation Initiative (2024)
86. Colorado Local Voter Approval for Property Tax Revenue Limitations Initiative (2024)
87. Colorado Property Tax Valuation Reduction Initiative (2024)
88. Colorado Sales Tax on Firearms Dealers, Manufacturers, and Ammunition Vendors Measure (2024)
89. Colorado Amendment 60, Changes to Property Tax Laws Initiative (2010)
90. Colorado Retain Sports Betting Tax Revenue for Water Projects Measure (2024)
91. Colorado Income Tax Rate Reduction Initiative (2024)
92. Colorado Restrictions on Collecting Fees for Mass Transit Initiative (2024)

Recent news

The link below is to the most recent stories in a Google news search for the terms Colorado taxes. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

See also

• Colorado
• Colorado state budget and finances
• Personal income tax
• Sales tax
• Corporate income tax
• Property tax

External links

• Tax Policy Center
• Federation of Tax Administrators
• Tax Foundation

Footnotes

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