Overview of Colorado Taxes
Colorado has low property taxes and a flat income tax rate of 4.63%. Colorado’s sales tax is the lowest in the country out of states with a sales tax, but county and city taxes mean Coloradoans can end up paying more. Retired? Use our Retirement Income Tax Calculator.
Number of State Personal Exemptions
Your Income Taxes Breakdown
|Tax Type||Marginal |
|Total Income Taxes|
|Income After Taxes|
* These are the taxes owed for the 2019 - 2020 filing season.
Your 2019 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2019 Tax Burden
Total Estimated Tax Burden $
Percent of income to taxes = %
- About This Answer...read more
Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2019 - 2020 filing season based on the Trump Tax Plan.
How Income Taxes Are Calculated
- First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
- Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
- Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
- Your location will determine whether you owe local and / or state taxes.
- Last Updated: January 1, 2020...read more
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Taxes in Colorado
Colorado State Tax Quick Facts
- Income tax: 4.63% flat rate
- Sales tax: 2.90% - 11.20%
- Property tax: 0.55% average effective rate
- Gas tax: 22.0 cents per gallon of regular gasoline, 20.5 cents per gallon of diesel
The Centennial State has a flat income tax rate of 4.63%, and one of the lowest statewide sales taxes in the country, at just 2.90%. However, because of numerous additional county and city sales taxes, actual combined rates can be as high as 11.20%. When considering these local taxes, the average Colorado sales tax rate is 7.63%, 16th highest in the country.
On the other hand, homeowners in Colorado get a break on real estate taxes. The state’s property tax rates are among the nation’s lowest, with an average effective rate of just 0.55%.
A financial advisor in Colorado can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
Colorado Income Taxes
The state income tax in Colorado is assessed at a flat rate of 4.63%, which means that everyone in Colorado pays that same rate, regardless of their income level. There are eight other states with a flat income tax. Among these states, Colorado’s rate ranks in about the middle of the pack. Colorado’s income tax is also fairly average when compared to the top rate of those states with a progressive income tax.
That 4.63% applies to Colorado taxable income, which is equal to federal taxable income. This means that taxpayers who do not itemize deductions on their federal income tax return do not have the option to do so on their state return; conversely, taxpayers who do itemize deductions federally must claim the same deductions on their state return.
There are a couple of exceptions to this. One is that taxpayers who make donations to charity, but do not itemize deductions on their federal return, may be able to deduct those donations on their Colorado state income taxes. Another is the deduction for state income taxes (also known as the SALT deduction). Taxpayers who itemize deductions federally, and claim this deduction, must add it back to their Colorado taxable federal income tax return.
Colorado Tax Credits
After calculating their initial tax bill, there are some additional tax credits Coloradoans can claim. The most significant of these are the Child Care Contribution Credit (which is equal to a percentage of the similar federal credit), the Earned Income Credit (equal to 10% of the federal credit) and the Alternative Fuel Credit, which is available to taxpayers who purchase an alternative fuel vehicle such as a battery-powered electric car.
Colorado Sales Tax
The statewide sales tax in Colorado is just 2.9%, lowest among states with a sales tax. However, as anyone who has spent time in Denver, Boulder or Colorado Springs can tell you, actual sales tax rates are much higher in most cities. This is because many cities and counties have their own sales taxes in addition to the state sales tax. The table below shows sales tax rates for all counties and the largest cities in Colorado.
Sales Tax Rates(Updated January 2020)
|County||State Rate||County Rate||Total Sales Tax|
|City||State Rate||County + City Rate||Total Sales Tax|
|Cherry Hills Village||2.90%||4.850%||7.750%|
Property and tangible goods (including electronically delivered goods such as music downloads) are subject to sales tax in Colorado, but most services are not. While prepared food is taxable, most food that is purchased for consumption at home (i.e. groceries) is nontaxable. Prescription drugs are also tax-exempt in Colorado.
Colorado Property Tax
If you’re thinking about finally investing in that Rocky Mountain ski lodge, there’s some good news: Colorado has some of the lowest property taxes in the country. The state’s average effective property tax rate (property taxes paid as a percentage of home value) of 0.55% is the fifth lowest in the U.S. In some areas, effective property taxes are even lower. In Gilpin County, for example, where homeowners there pay about $756 annually in property taxes, the rate is just 0.25%.
Before purchasing your new chalet, you’ll want to take a look at our Colorado mortgage guide to get a full understanding of the mortgage market in the Centennial State.
Colorado Marijuana Tax
As of 2014, marijuana is both legal and taxable in Colorado. The marijuana tax rate is a combined 30%, though consumers will only pay half of this. More specifically, marijuana retailers must pay a 15% excise tax when they buy from a cultivator, leaving consumers to pay the other 15% in the form of a sales tax at the time of purchase. The 2.9% state sales tax rate only applies to medical marijuana.
Colorado Estate Tax
There is no estate or inheritance tax in Colorado.
Colorado Capital Gains Tax
Most capital gains in Colorado are taxed at the standard income tax rate of 4.63%. However, certain long-term gains are exempt. Gains from property acquired after May 9, 1994, which was held for at least five years before being sold, may be exempt up to a limit of $100,000.
Colorado Gas Tax
The gas tax in Colorado is 22 cents per gallon of regular gas, one of the lowest rates in the U.S. Diesel fuel is taxed at a rate of 20.5 cents per gallon.
- The highest point in Colorado is the peak of Mount Elbert, at 14,433 feet. The lowest point is along the Arkansas River, at 3,350 feet.
- Colorado’s nickname is the Centennial State because it achieved statehood less than a month after the centennial of the U.S. Declaration of Independence.
Places with the Lowest Tax Burden
Are you curious how your tax burden stacks up against others in your state? SmartAsset’s interactive map highlights the counties with the lowest tax burden. Scroll over any county in the state to learn about taxes in that specific area.
Where you live can have a big impact on both which types of taxes you have to pay each year and how much money you spend on them. SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country and ranked the lowest to highest tax burden.
To better compare income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes.
In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a county by the household income less income tax. This product is then multiplied by 35% to estimate the sales tax paid.
For property taxes, we compared the median property taxes paid in each county.
For fuel taxes, we first distributed statewide vehicle miles traveled down to the county level using the number of vehicles in each county. We then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, we calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax.
We then added the dollar amount for income, sales, property and fuel taxes to calculate a total tax burden. Finally, we created the Tax Burden Index in order to show how each county in the country compares to the county with the lowest tax burden (that is the county with a Tax Burden Index of 100).