State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

Colorado State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.


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The Bottom Line
Flag of Colorado


The Centennial State has a flat tax: If you have federal taxable income, the rate is 4.5% for 2021. Property taxes are among the country's lowest, but sales taxes take a bite.

Income Tax Range

For 2021, Colorado has a flat income tax rate of 4.5%. The rate was reduced from 4.63% to 4.55% with the approval of Proposition 116, which appeared on the November 2020 ballot. The rate for 2021 was then lowered to 4.5% because of a high fiscal year revenue growth rate.

Denver and a few other cities in Colorado also impose a monthly payroll tax.

Sales Tax

2.9% state levy. Localities can add as much as 8.3%, and the average combined rate is 7.72%, according to the Tax Foundation.

Groceries: Exempt
Clothing: Taxable
Motor Vehicles: Taxable
Prescription Drugs: Exempt

Real Property Taxes

In Colorado, the median property tax rate is $494 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 22¢ per gallon (24¢ per gallon effective July 1, 2022).
Diesel: 20.5¢ per gallon (22.5¢ per gallon effective July 1, 2022).

Sin Taxes

Cigarettes: $1.94 per pack; many mountain municipalities add steep $3-$4 per pack levies
All other tobacco products: 50% of manufacturer's list price
Vapor products: 30% of manufacturer's list price (increases to 35% in 2022)

Beer: $0.08 per gallon
Wine: $0.32 per gallon
Liquor: $2.28 per gallon

Marijuana: For retail purchases, 15% state retail marijuana sales tax and 15% excise tax, plus state and local sales taxes

Annual Car Taxes and Fees

An annual vehicle ownership tax based on the car's sticker price (MSRP) and age is imposed. Rates are set at the county level.

Estate and Inheritance Taxes

No estate or inheritance tax.