How taxes work in Colorado
Sales tax. Colorado charges a 2.9% statewide sales tax, and counties, cities and special districts add their own on top — which is why the average combined rate of about 7.81% is the number that matters at the till. Groceries are exempt from the state tax; many local jurisdictions tax them, so combined food tax varies by city.
Property tax. At an average effective rate of about 0.52%, a $350,000 home in Colorado carries roughly $1,820 a year in property tax before exemptions. Colorado is a low-property-tax state, which quietly lowers the true cost of owning there. Local assessors set actual bills, so verify with the county for any specific property.
Income tax. Flat 4.4% income tax. If you are self-employed in Colorado, you still owe federal self-employment tax plus quarterly state estimates where applicable.
Sales tax · average combined
Property tax · average effective
Chart: DailyFinance.tools · Rates are reviewed averages from our state tax dataset — your exact local rate may differ.
How Colorado compares with similar states
The states closest to Colorado on average combined sales tax. Property tax is the average effective rate; income tax shows the structure, not a single rate.
| State | Combined sales tax | Property tax | Income tax |
|---|---|---|---|
| Colorado (this page) | 7.81% | 0.52% | Flat |
| Texas | 8.2% | 1.6% | None |
| Minnesota | 8.04% | 1.08% | Progressive |
| New Mexico | 7.83% | 0.67% | Progressive |
| South Carolina | 7.46% | 0.53% | Progressive |
| All-state average (51 entries) | 6.61% | 1.04% | — |
What this means for your money in Colorado
Property tax is light in Colorado: an average effective rate of 0.52% ranks 48 of 51, well below the all-state average of 1.04%. A $400,000 home carries about $2,080 a year. Low property tax lowers the fixed cost of owning, which partly offsets whatever the state's income and sales taxes take.
Read together: Colorado combines an average combined sales tax of 7.81% (rank 17 of 51), an average effective property tax of 0.52% (rank 48 of 51) and a flat state income tax. A household comparing states should compare all three against its own pattern — a high earner who rents weighs the income tax most; a homeowner on a fixed income weighs the property tax most.
Major cities in Colorado
Denver, Colorado Springs, Aurora, Fort Collins, Lakewood. Combined sales-tax rates differ between these cities — sometimes by more than a full percentage point inside the same state — because county and city layers stack on the state base. The Colorado sales tax guide breaks down the calculation and links the calculator where you can enter your exact local rate.
Calculators for Colorado residents
- Colorado Sales Tax Guide & Examples — what you actually pay, with worked amounts.
- Sales Tax & VAT Calculator — add or extract tax at any rate, including your exact Colorado local rate.
- Mortgage Calculator — include Colorado property tax in the monthly payment.
- Property Tax Calculator — estimate a specific property's bill.
- Self-Employment Tax Calculator — federal SE tax for Colorado freelancers.