Individual
Colorado assess a flat tax of 4.63 percent of an individual's taxable federal income, ranking Colorado the sixtth-lowest among states that levy an individual income tax, according to the U.S. Census Bureau.
Since most small businesses are either S Corporations or partnerships or sole proprietorships, these companies pay the individual rate for their business taxes. Colorado's low individual income tax rate results in an extremely competitive tax environment compared to other states for small businesses.