Personal Income Tax
Colorado's personal income tax system consists of a flat tax of 4.63% of an individual's federally adjusted taxable income. This personal income tax rate ranks 5th lowest among all states levying an individual income tax. Local governments in Colorado do not assess income taxes.
All persons who work in the City and County of Denver and earn more than $250 per month are assessed a monthly occupational tax of $5.75. Their employers pay an additional $5.00 per month per employee. Anyone working in the cities of Greenwood Village or Aurora and earning a salary greater than $250 per month is assessed a $2 occupational tax per month, regardless of salary level, which is matched by the employer.
Comparative Data - Colorado and Selected States
Factors such as sales tax exemptions and graduated rates for income tax are recognized to significantly compromise the use of rates as a method of comparison. As a consequence, nationally recognized public interest research groups have adopted the concept of "effective rate," typically measured by sales or income tax paid per $1,000 of personal income. The following table compares Colorado with neighboring and similar states.
State and Local Government Tax Revenue as a Percent of Personal Income
Colorado and Selected States (2005)
State |
State/Local Tax Burden |
Rank |
Arizona |
10.2% |
21 |
California |
10.3% |
17 |
Colorado |
9.5% |
37 |
Idaho |
10% |
24 |
Kansas |
10.4% |
14 |
Minnesota |
10.7% |
10 |
Nebraska |
10.9% |
8 |
New Mexico |
9.9% |
29 |
Oregon |
9.6% |
36 |
Utah |
10.9% |
8 |
Washington |
10% |
24 |
Wyoming |
10.1% |
22 |
U.S. Avg. |
10.1% |
|