Residents or those working with a company based in Colorado have to file a state income tax return. The state is one of the few to implement a flat income tax. That means if you have qualifying income, you pay the same tax rate regardless of how much you make.
Colorado personal income tax rates: Table
Colorado charges the same income tax rate for its residents regardless of how much you make.
|Colorado personal income tax rates|
|Tax rate||Single||Married, filing jointly|
|4.55%||Greater than $0||Greater than $0|
|Source: Colorado General Assembly|
The standard deduction in Colorado is $12,550 for single taxpayers and $25,100 for married filers. The state does not have personal exemptions.
Who has to file Colorado state taxes?
You are eligible to file a Colorado tax return if you lived in the state for any portion of the year and earned income. You might also have to file taxes if you didn’t live in Colorado but worked for a company residing there. You can consult the Colorado Department of Revenue Taxation Division for information on filing eligibility.
Colorado-based companies will also have to pay state income taxes. The top corporate income tax rate is low at 4.63 percent. It ranks the state 21st nationally in the State Business Tax Climate Index Rating.
Colorado sales tax rate: Table
Colorado also has one of the nation’s lowest sales tax rates.
|Colorado sales tax rate|
|Sales tax rate||National rank|
|Source: Tax Foundation|
Colorado imposes a sales tax rate of 2.90 percent, while localities charge 4.75 percent for a combined 7.65 percent rate. Unlike some states, Colorado does not currently have any sales tax holidays.
Other things to know about Colorado state taxes
The state charges different taxes on specific items. The gasoline tax of 22 cents per gallon is among the cheapest nationally (42nd). Meanwhile, the cigarette tax of $0.84 (dollars per 20-pack average) is ranked 31st nationally.
Colorado offers many tax credits, from the Earned Income Credit to a discount for paying taxes in another state. The Colorado Department of Revenue Taxation Division contains all the information you need to see if you qualify for one of their credits. While there, you can also file your state income taxes and pay any amounts you owe.