Colorado state tax: Overview
Colorado has a flat 4.4% personal income tax rate. When it comes to property taxes, Colorado has a relatively low rate, and gas taxes in Colorado are on the low end as well.
However, Colorado's sales tax is generally relatively high and can exceed 11% in some parts of the state.
In the News: Colorado Gov. Jared Polis recently signed a landmark bill to make higher education more accessible in the Centennial State. Proponents say the new law, the Colorado Promise: Two Free Years of College Expanded, will help reduce financial barriers for many students and families. For more information, see New Colorado Tax Credit Offers Two Years Free College: What to Know.
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TABOR Colorado: Funding for the free tuition initiative leverages funds collected above the Taxpayer’s Bill of Rights (TABOR) cap. (TABOR requires that excess revenue be returned to Colorado taxpayers.)
TABOR payments/refunds are based on whether the state exceeds a surplus revenue threshold. For example, as Kiplinger has reported, 2024 TABOR payments will be flat or equal across the board. Current estimates are that single filers could receive about $847 and joint filers, $1,694.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Colorado income tax rate
Colorado has a flat income tax rate of 4.4%.
- Some cities and localities in Colorado impose a monthly payroll tax.
- Social Security Benefits: Social Security income is deductible for taxpayers aged 65 and over.
- For the 2023 tax year, taxpayers under age 55 can exclude up to $15,000 of income from a military retirement plan.
- Railroad Retirement benefits are exempt from state tax in Colorado.
Colorado sales tax
Colorado's state sales tax is 2.9%. Localities can add as much as 8.3%, and the average combined Colorado sales tax rate is 7.78%, according to the Tax Foundation.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
What is the property tax rate in Colorado?
In Colorado, the average property tax rate as a percentage of assessed home value is 0.55% according to the Tax Foundation.
Colorado Property Tax Breaks for Retirees
Colorado Property Tax Exemption for Adults 65 and Older: Colorado offers a property tax exemption for older adults aged 65 or older. Specific requirements must be met, but if you qualify, 50% of the first $200,000 of the value of a primary residence is exempt from property tax.
An applicant or married couple can apply for the exemption on only one property, which must be their primary residence. Married couples and individuals who apply for the exemption on multiple properties cannot claim the property tax exemption.
The qualifying resident must also have owned and lived in the home for at least ten years.
Colorado gas tax
Gasoline: Gasoline is taxed in Colorado at 22 cents per gallon.
Diesel: 21 cents per gallon.
Source: The Sales Tax Handbook
Colorado taxes on alcohol and tobacco
Colorado tobacco taxes
| Product | Tax Amount |
|---|---|
| Cigarettes | $0.84 per pack of 20 cigarettes |
| All other tobacco products | 40% of the manufacturer's selling price |
Source: The Sales Tax Handbook
Colorado alcohol taxes
| Product | Tax Amount |
|---|---|
| Beer | $0.08 per gallon |
| Wine | $0.28 per gallon |
| Liquor | $2.28 per gallon |
Source: The Sales Tax Handbook
Marijuana: For retail purchases of marijuana in Colorado, a 15% state marijuana sales tax applies, and a 15% excise tax, plus state and local sales taxes
Colorado estate and inheritance tax
Colorado doesn't have an estate or inheritance tax.
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