State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families. Go to the Kiplinger Tax Map Colorado Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line 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: ExemptClothing: TaxableMotor Vehicles: TaxablePrescription 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 leviesAll other tobacco products: 50% of manufacturer's list priceVapor products: 30% of manufacturer's list price (increases to 35% in 2022)Beer: $0.08 per gallonWine: $0.32 per gallonLiquor: $2.28 per gallonMarijuana: 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.