Colorado Data Book
Colorado Business Taxes
Colorado provides a competitive business tax structure that rewards investment and innovation. With very
low taxes at the state level, and a wide range of local tax structures, Colorado offers almost unlimited
choices to meet the needs of all types of businesses. Under Amendment One, passed by the voters of
Colorado in 1992, a constitutional limit was placed on both revenues and expenditures of state and local
governments. Without voter approval, both are limited to the increase in inflation plus the population
TABOR & Referendum C
The Taxpayer’s Bill of Rights (TABOR), passed in 1992, limited spending increases to population growth
plus inflation. Large surpluses, reaching $927 million in 2000, resulted from a lengthy economic
expansion. State government alone has refunded over a billion dollars to Colorado taxpayers, and enacted
permanent tax cuts in the state income and sales taxes. At the same time, voter-mandated funding
increases to education, demands for transportation projects and other programs strained the budgets
In 2005, Colorado voters approved Referendum C, which allows the State to retain all revenue it collects.
This measure is in effect for five years, and allows the State to fund mandated growth in education and
Medicaid spending, as well as providing funding for transportation and other State programs.
Under the provisions of Referendum C, the State will retain $5.63 billion from FY 2005-06 through FY
2009-10. Therefore, there will not be a TABOR surplus during this five-year period. However, a TABOR
refund of $56.4 million is expected in FY 2010-11.
Source: Office of State Planning and Budgeting, June 2007
Corporate Income Tax
Colorado's corporate income tax rate is a flat 4.63 percent. It is assessed on Colorado net income, defined
as the corporation's federal taxable inco