Colorado

In 2003, individual income in Colorado was taxed at a flat rate of 4.63% of federal taxable income. The corporate income tax rate is also a flat 4.63%. The Taxpayer's Bill of Rights (TABOR) limits the state's revenue growth to the sum of inflation plus population growth in the previous calendar year. It also mandates an immediate rebate of any surplus tax money collected. As part of the rebate process, the individual and corporate income tax rates were reduced from 5% to 4.75% as of 1 January 1999, and then to 4.63% as of 1 January 2000. The formula for taxable corporate income takes into consideration both total profits and those derived solely from state sources. By 2003, Colorado had also reduced its general sales tax from 5% in 1999 to 2.9% in 2001. Food and prescription drugs are exempt from the general sales tax. Colorado municipalities are also allowed to levy sales and use taxes, with a top rate reduced to 6.9% (from 7%) in 2001. There are also state excise taxes on tobacco products, alcoholic beverages, pari-mutuel racing, motor fuels, insurance premiums, public utilities, and other selected goods, as well as various license fees. The state inheritance tax is set equal to the federal tax credit for such taxes, and so is set to be phased out by 2007 in tandem with the phasing out of the federal inheritance tax absent any countervailing action by the Colorado legislature. Estimated revenue losses from the phasing out of the state inheritance tax are $14.3 million in 2002/03, $35.7 million in 2003/ 04, and $73.7 million in 2006/07. Colorado also imposes severance taxes on extractive operations with rates varying according to the substance, as well an Oil and Gas Conservation levy (at 0.11% as of March 2002). Property taxes are the major source of revenue for local governments.

State tax collections in Colorado in 2002 totaled $6.923 billion in 2002, down from $7.57 billion (-8.5%) in 2001. Of the total, 50% came from individual income taxes, 27.5% from the general sales tax, 13.5% from selective sales taxes, 4% from license fees, and 3% from the corporate income tax.

The following table from the US Census Bureau provides a summary of taxes collected by the state in 2002.