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.

Colorado

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The Bottom Line
Flag of Colorado

Tax-Friendly

The Centennial State has a flat tax: If you have federal taxable income, the rate is 4.55%. Property taxes are among the country's lowest, but sales taxes take a bite.

Income Tax Range

Colorado has a flat income tax rate of 4.55% (the approval of Proposition 116, which appeared on the November 2020 ballot, reduced the rate from 4.63% to 4.55%). The state also limits how much its revenue can grow from year-to-year by lowering the tax rate if revenue growth is too high. For example, in 2019, this resulted in a rate reduction to 4.5%.

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.
Diesel: 20.5¢ per gallon.

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: 50% of manufacturer's list price

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.


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