Colorado Corporate Taxes

Colorado ranks among the top-10 states (10th) for best corporate tax system according to the Tax Foundation's 2021 State Business Tax Climate Index. Colorado's corporate income tax rate is a flat 4.55% assessed on Colorado net income, defined as the corporation's federal taxable income, with some modifications.

Colorado's Method of Apportioning Income

Single-factor legislation passed in 2008 simplified Colorado's corporate income tax structure through a single factor apportionment, which assesses taxes on a company’s sales in Colorado only.

Prior to single factor, the taxpayer could decide each year whether to use the standard three-factor formula (wages, property, and sales) or a special two-factor (property and sales) formula.

Unitary Taxation

Colorado has a liberal "water's edge" system of unitary taxation rather than a "worldwide" one. Specifically, foreign corporations, as well as "80/20" corporations (corporations with 80 percent of their property and payroll outside the U.S.) are not included in a Colorado income tax return. Corporations doing business in Colorado, as well as other states, must apportion to Colorado that part of their net income derived from sources within the state.  

Related Files 1 Reports
Taxes & Incentives
U.S. Corporate Tax Rates