The Colorado state income tax rate for 2026 is a flat 4.4% of federal taxable income. On November 3, 2026, voters will decide Amendment 87, originally Initiative 195, which would replace the single rate with graduated rates beginning in 2027, and Proposition 136, originally Initiative 232, which would limit the income tax rate to 4.4%.
Boxelder Consulting does not take a position on either ballot measure. This guide explains the current tax rate, what each proposal would change, and how the measures could affect individual and business tax planning.
Colorado’s Taxpayer’s Bill of Rights is central to both measures.
At a Glance
- Current 2026 Colorado income tax rate: 4.4% flat.
- Election date: November 3, 2026.
- Amendment 87, formerly Initiative 195: would replace the single-rate requirement with graduated individual and corporate income tax rates.
- Proposition 136, formerly Initiative 232: would limit individual and corporate income tax rates to 4.4%.
- Amendment 87 requires at least 55% approval because it changes the Colorado Constitution.
- The official ballot materials describe Amendment 87 as increasing state revenue and dedicating new revenue to specified public purposes.
- If both measures pass, the interaction depends on where they conflict and which receives more affirmative votes.
- Any change from Amendment 87 would apply to future tax years, not 2026 returns.
What Is the Colorado State Income Tax Rate for 2026?
The Colorado state income tax rate for 2026 is 4.4%. Yes, Colorado has a state income tax, and for 2026 it uses one flat rate rather than a bracketed system.
Colorado generally starts with federal taxable income and makes state-specific adjustments. That means federal deductions and changes can flow into the Colorado return before the state’s tax rate is applied.
For federal changes that may affect the starting point, see 2026 federal tax changes.
This page uses the statutory 4.4% rate. Colorado has had temporary TABOR-related rate reductions in some years, so confirm any temporary rate adjustment on the Department of Revenue site before filing a return.
Does Colorado Have Tax Brackets?
No. Colorado currently uses a single income tax rate rather than multiple Colorado tax brackets.
That is the core change proposed by Amendment 87. The measure would replace the single-rate rule with a graduated structure, meaning different portions of taxable income could be taxed at different marginal rates.
A marginal rate does not mean every dollar of income is taxed at the highest bracket a taxpayer reaches. Only the portion of taxable income inside each bracket is taxed at that bracket’s rate.
| Taxable income | Proposed rate |
|---|---|
| Up to $25,000 | 3.7% |
| $25,001 to $100,000 | 4.2% |
| $100,001 to $500,000 | 4.4% (same as today) |
| $500,001 to $750,000 | 7.4% |
| $750,001 to $1,000,000 | 7.9% |
| Over $1,000,000 | 8.4% |
Marginal rates: each rate applies only to the income within that bracket. Colorado’s current rate is a flat 4.4%. Source: Common Sense Institute analysis of the Initiative 195 text.
What Is Amendment 87, Formerly Initiative 195?
Amendment 87 is the final ballot designation for the graduated income tax proposal originally circulated as Initiative 195.
The measure would amend Colorado’s Taxpayer’s Bill of Rights to remove the constitutional requirement that income be taxed at a single rate, then establish graduated individual and corporate income tax rates.
Because the measure changes the Colorado Constitution, it requires at least 55% of the vote to pass. Official ballot materials describe the measure as increasing state tax revenue and directing new revenue to specified public programs, including education, health care, and early childhood priorities.
Supporters argue that a graduated structure would lower taxes for many lower- and middle-income households while asking more from very high earners. Opponents argue that the higher top marginal rates could increase the tax burden on high-income households and businesses and affect economic behavior. Those arguments are political positions, not Boxelder’s conclusions.
On October 21, 2026, a Denver District Court judge dismissed a lawsuit that sought to remove Amendment 87 from the ballot over petition paperwork, and the challenger has appealed to the Colorado Supreme Court. Amendment 87 remains on the ballots already mailed to voters
What Is Proposition 136, Formerly Initiative 232?
Proposition 136 is the final ballot designation for the competing income tax rate-limit proposal originally circulated as Initiative 232.
It is a statutory measure that would limit the individual and corporate income tax rate to 4.4%. Unlike Amendment 87, it does not amend the Colorado Constitution.
Supporters frame the measure as a way to preserve Colorado’s current flat-rate structure and prevent higher rates. Opponents argue that a statutory rate cap could reduce future flexibility for lawmakers and voters. Again, Boxelder takes no position on the measure.
What Happens If Both Amendment 87 and Proposition 136 Pass?
The two measures conflict on the future income tax rate. Amendment 87 creates a graduated structure, while Proposition 136 limits the rate to 4.4%.
Colorado ballot rules provide a mechanism for conflicting measures, and election analyses note that the measure receiving more affirmative votes can control to the extent the two conflict. There is additional nuance because Amendment 87 also changes the Constitution’s single-rate requirement, while Proposition 136 is statutory.
The practical answer may depend on the final vote totals and post-election legal interpretation. Boxelder should update this page after the election rather than oversimplifying the interaction before results are final.
How Would Amendment 87 Affect Your Taxes?
The official ballot analysis provides estimated average tax changes by income range. Those figures are averages, not a guarantee for any individual return.
Households Earning Under $500,000
Official estimates indicate average income tax reductions across several income groups below $500,000. The official estimates show summarizes the estimated average changes as approximately:
- $9 less for income under $25,000.
- $119 less for $25,001 to $50,000.
- $210 less for $50,001 to $100,000.
- $298 less for $100,001 to $200,000.
- $325 less for $200,001 to $500,000.
Actual tax changes would depend on taxable income, filing details, deductions, and the final law.
High Earners and Business Owners
For higher income ranges, the official estimate changes direction. The brief summarizes approximately $325 less on average for incomes from $500,001 to $1 million, $4,764 more for $1 million to $2 million, and $13,914 more for $2 million to $5 million.
Business owners need to pay particular attention because S corporations, partnerships, and many LLCs pass income through to their owners’ individual returns. A change to individual marginal rates could therefore affect tax on business profit even when the business itself is not a C corporation.
The measure would also apply a graduated structure to corporate income. If Amendment 87 passes, high-income owners should review entity structure and income timing with an advisor before making changes. See choosing a business entity and S corp.
Selling Your Home
The ballot language for Amendment 87 preserves a 4.4% rate for income from the sale of a principal residence. Home sellers would still need to determine what gain is taxable under federal and Colorado rules.
For more detail, see capital gains tax on a home sale in Colorado.
What Is TABOR, and Why Is It on This Ballot?
The Taxpayer’s Bill of Rights, or TABOR, is Colorado’s 1992 constitutional amendment governing tax increases, state revenue limits, and voter approval requirements. It also requires a single income tax rate.
Amendment 87 directly changes that single-rate rule. It would authorize a graduated income tax and allow the state to retain and spend the new revenue as a voter-approved revenue change.
For a broader explanation of the system, see TABOR refunds.
Should You Do Anything Before the Election?
For most taxpayers, no immediate tax move is required before the vote. Nothing about the 2026 Colorado return changes because these measures are on the ballot.
If Amendment 87 passes and the graduated rates take effect in 2027, planning may become more important for people with taxable income around or above the higher brackets, business owners with pass-through income, people expecting a large bonus, or owners planning a business sale.
Do not change entity type or accelerate income based only on a campaign headline. Wait for final results, final implementation guidance, and a modeled tax comparison. Boxelder can help with business structure and strategy and tax planning.
Frequently Asked Questions
What is the Colorado state income tax rate for 2026?
The statutory rate is 4.4% of federal taxable income, subject to Colorado adjustments.
Does Colorado have tax brackets?
Not for 2026. Colorado currently uses a single rate. Amendment 87 would create a graduated structure for future years if approved and implemented.
What is Amendment 87 in Colorado?
Amendment 87 is the final 2026 ballot designation for the graduated income tax proposal originally known as Initiative 195.
What is the Colorado corporate income tax rate?
Colorado’s statutory corporate income tax rate is also 4.4% under the current system.
When would a Colorado graduated income tax take effect?
The proposal is designed to apply beginning in a future tax year, identified in the brief as 2027. Confirm the effective date against the final Blue Book before publication.
The Bottom Line
For 2026, Colorado still has a 4.4% flat income tax. The November ballot asks voters whether to change that structure through Amendment 87 or reinforce the 4.4% limit through Proposition 136. Boxelder does not take a position on either measure. To model the tax impact on a household or business, talk to our Denver tax team.
Sources
- Colorado Department of Revenue, Individual Income Tax Guide
- Colorado Department of Revenue, TABOR Refund
- Colorado Secretary of State, Initiative 195 / Amendment 87 materials
- Colorado Newsline, Initiative 232 / Proposition 136 voter guide
- Colorado Legislative Council, 2026 State Ballot Information Booklet
- Ballotpedia, 2026 Colorado income tax ballot measure coverage
Disclaimer: This article provides general information and is not tax or legal advice. Boxelder Consulting does not take a position on any ballot measure. Figures reflect official estimates and published analyses available as of the updated date and may change.
