Colorado State Tax Rate Guide – Colorado offers one of the simplest and most competitive state tax systems in the U.S., featuring a flat individual and corporate income tax rate, the lowest state sales tax in the nation, and locally determined property taxes. Whether you’re a resident filing your 2025 return in 2026, a business owner, or considering a move to the Centennial State, this guide breaks down everything you need to know about Colorado state tax rates for 2026.
All information is sourced directly from the Colorado Department of Revenue (DOR) and the Tax Foundation as of April 2026. Tax laws can change, so always verify with official sources or a tax professional.
Colorado Individual Income Tax Rates
Colorado uses a flat income tax rate with no brackets—every taxpayer pays the same percentage on Colorado taxable income.
- 2025 tax year (returns filed in 2026): 4.4% flat rate.
- 2024 tax year: Temporarily reduced to 4.25% due to the Taxpayer’s Bill of Rights (TABOR) revenue surplus refund mechanism.
- 2026 tax year: Expected to remain 4.4% unless TABOR triggers another adjustment (no reduction announced as of April 2026).
This flat rate applies to residents, part-year residents, and nonresidents with Colorado-source income. Colorado starts with your federal taxable income and applies state-specific additions and subtractions.
Key features:
- No state standard deduction beyond what’s already reflected in your federal taxable income.
- Tax tables are available for incomes under $50,000 to simplify calculations.
- Filing threshold mirrors federal requirements.
How Colorado Income Tax Is Calculated?
- Start with federal taxable income (after federal deductions and exemptions).
- Add Colorado-required additions (e.g., interest from non-Colorado municipal bonds, certain federal deductions like state taxes paid, or excess itemized deductions for high earners).
- Subtract allowed subtractions (e.g., Social Security benefits, certain pensions/annuities up to age-based limits, U.S. government interest, charitable contributions if taking the federal standard deduction, and specific 529 contributions).
- Apply the 4.4% flat rate.
- Subtract any tax credits.
Common subtractions include pensions for those 55+, railroad retirement benefits, and certain first-responder benefits. Additions may include overtime pay deductions (starting 2026) or qualified business income deductions for higher earners.
Part-year residents and nonresidents apportion income based on time spent in Colorado or source of income.
Filing deadline: April 15, 2026 (for 2025 returns), with an automatic six-month extension for filing (payment still due April 15). Use Form DR 0104.
Colorado Sales Tax Rates
Colorado boasts the lowest state-level sales tax in the country at 2.9%.
- State base rate: 2.90% (unchanged for 2026).
- Local rates: Vary significantly by city, county, and special districts (e.g., transit, fire protection, lodging). Combined rates typically range from 4% to over 11% in some areas.
- Average combined rate: Around 7.89%–8% depending on location (per Tax Foundation data).
Important 2026 updates (effective January 1, 2026):
- Multiple local rate increases and new taxing jurisdictions (e.g., increases in Aspen, Fort Morgan, Gunnison, Timnath, Westminster).
- New service fees and exemptions in various counties.
- Lodging taxes in resort areas can push combined rates higher.
Pro tip: Always use the official Colorado DOR sales tax rate lookup tool or GIS map for your exact address—rates change frequently and are location-specific. Retailers collect and remit both state and local portions.
Colorado Property Tax Rates and Assessment
Colorado does not have a single statewide property tax rate. Taxes are set locally through mill levies and depend on your property’s assessed value.
2026 Assessment Rates (effective for property tax year 2026):
| Property Class | Assessment Rate |
|---|---|
| Residential – Local Gov | 6.8% |
| Residential – Schools | 7.05% |
| Vacant Land | 26% |
| Commercial Improved | 25% |
| Commercial Other | 26% |
| Industrial / Agricultural | 25–26% |
How property taxes are calculated:
- Actual value = Market value (determined by county assessor using comparable sales for residential).
- Assessed value = Actual value × assessment rate (split for residential: one for local gov, one for schools).
- Tax due = Assessed value × total mill levy (sum of county, city, school, special district rates).
Example: A $500,000 residential home might have an assessed value of roughly $34,000–$35,250 (depending on split rates) and pay $2,000–$4,000+ annually depending on local mill levies.
Recent changes (2025–2026): Split residential assessment rates began in 2025 to stabilize school funding. A 10% valuation reduction on the first $700,000 (with minimums) applies to the local government portion in some calculations. Revaluations occur every odd year for real property.
Tax relief: Seniors, disabled residents, veterans, and National Guard members may qualify for rebates, deferrals, exemptions, or work-off programs. Contact your county assessor.
Colorado Corporate Income Tax Rates
Colorado also uses a flat 4.4% corporate income tax rate for tax year 2025 (returns filed in 2026).
- Same rate as individuals.
- Based on Colorado taxable income (federal taxable income with state additions/subtractions and apportionment for multi-state businesses).
- C corporations only (S corps pass through to individual returns).
- Estimated payments required if liability exceeds $5,000.
Filing: Form DR 0112, due the 15th day of the 5th month after year-end (May 15 for calendar-year filers).
Other Notable Taxes in Colorado
- No estate or inheritance tax.
- Excise taxes: Apply to gasoline, cigarettes, alcohol, and marijuana (state + local).
- Unemployment insurance and workers’ comp: Employer-paid.
- Local income taxes: Rare; a few jurisdictions have occupational privilege taxes.
TABOR continues to limit state revenue growth, sometimes triggering rate cuts or refunds (as seen in 2024).
How to File and Pay Colorado State Taxes?
- Online portal: Revenue Online (colorado.gov/revenueonline) – fastest way for returns, payments, and estimated taxes.
- Individual forms: DR 0104 (main return), DR 0104AD (subtractions).
- Corporate: DR 0112 series.
- Extensions and penalties: Automatic filing extension available, but pay owed tax on time to avoid interest/penalties.
Recent Changes and 2026 Outlook
- Income tax rate stabilized at 4.4% after the 2024 TABOR cut.
- Sales tax: Ongoing local adjustments in 2026.
- Property tax: Split assessment rates and potential valuation adjustments may moderate (or increase) bills depending on your county.
- Ballot measures: Discussions around graduated income tax or rate caps are active but have not changed current law as of April 2026.
Frequently Asked Questions
Is Colorado a high-tax state?
No—its flat 4.4% income tax, low 2.9% state sales tax, and competitive property taxes make it attractive compared to many coastal states.
Do I need to file if I’m a remote worker living in Colorado?
Yes, if you’re a resident or have Colorado-source income.
How do I find my exact sales tax rate?
Use the DOR’s online lookup tool by address.
Are pensions taxed in Colorado?
Partial exemptions apply based on age and type.
Final Tips for Colorado Taxpayers
Colorado’s tax system prioritizes simplicity and taxpayer protections under TABOR. Stay informed by visiting the official Colorado Department of Revenue website (tax.colorado.gov) regularly. For personalized advice, consult a CPA or enrolled agent familiar with Colorado rules—especially if you have multi-state income, business activity, or are new to the state.
This Colorado state tax rate guide is current as of April 2026. Tax laws evolve, so double-check with the DOR before filing. Save this page and bookmark official resources to stay ahead.