Flat-Fee Tax Preparation for Colorado Residents

Colorado has a flat income tax rate of 4.4% (reduced from 4.55% in 2023 under the TABOR mechanism), one of the lower flat rates in the Mountain West

The CO Pass-Through Entity Tax (PTET) is available for CO partnerships and S-corps, allowing entity-level payment of CO income tax to bypass the federal SALT cap

Colorado's TABOR (Taxpayer's Bill of Rights) amendment limits state revenue growth, often resulting in income tax refunds to CO taxpayers when state revenues exceed caps — CO residents may receive a CO TABOR refund credited on their return

CO real estate transfer tax varies by county — there is no uniform state transfer tax, but some mountain resort counties (like Eagle County/Vail) impose transfer taxes specifically on high-value transactions

Colorado has a specific provision for energy sector taxpayers: severance taxes on oil, gas, and mining are a distinct CO filing obligation that must be reconciled with federal depletion deductions

CO enterprise zones provide income tax credits of 3% of net new business investment in designated economically distressed areas, plus credits for new employee hiring in those zones

Colorado's like-kind exchange treatment follows federal rules, but CO has specific reassessment rules for 'replacement property' with different treatment than some surrounding states

CO's property tax assessment system recently underwent significant reform (Proposition HH in 2023) — investment property assessed values and property tax obligations are subject to new caps and phase-in rules through 2033

Colorado Real Estate Tax

Colorado's real estate market — particularly Denver, Boulder, and mountain resort communities — has seen exceptional appreciation, creating significant capital gains planning needs for longtime property owners. The short-term rental market in ski resorts (Vail, Breckenridge, Telluride, Aspen) is large and generates substantial income, but triggers complex sales tax obligations at both state and resort county levels. CO's low flat income tax rate and PTET election make pass-through real estate ownership relatively tax-efficient compared to neighboring high-tax states.

Colorado Business Tax

Colorado has become a hub for technology, outdoor industry, and energy businesses, all with distinct state tax characteristics. The TABOR refund mechanism and PTET election provide unique planning opportunities not available in most states. Denver and Boulder have additional local business licensing and tax requirements. CO enterprise zone credits provide meaningful incentives for businesses locating in qualifying areas of the state.

What is the Colorado TABOR refund and will I receive one?

The Colorado Taxpayer's Bill of Rights (TABOR) amendment requires the state to refund surplus tax revenue to taxpayers when state revenue exceeds a growth limit. In recent years, CO has collected surplus revenue and issued TABOR refunds to CO taxpayers — typically as a credit on the CO income tax return. The amount varies by year and your CO adjusted gross income. In 2023, individual TABOR refunds ranged from approximately $800–$1,600 per taxpayer depending on income. Whether a refund will be available in future years depends on CO's revenue picture.

I own a ski rental property in Colorado — what taxes apply?

Short-term rental income in CO is subject to CO income tax at 4.4%, plus CO sales tax (2.9%) and local resort town sales tax (which can add another 3–6%) on gross rental revenue. Mountain resort counties may also impose real estate transfer taxes. The rental property is depreciable on your federal return, and a cost segregation study may accelerate deductions on ski resort property used for short-term rentals. Platforms like Airbnb and VRBO remit some taxes automatically but not all — verify what your specific county requires.

How does the Colorado PTET election work for my partnership?

Colorado's PTET allows eligible pass-through entities — S-corps, partnerships, and certain LLCs — to elect to pay CO income tax at the entity level. The tax paid at the entity level is deductible on the federal return as a business deduction, bypassing the $10,000 individual SALT cap. Partners and shareholders then claim a credit on their individual CO returns for their share of the PTET paid. For CO business owners subject to the SALT cap, the election often produces meaningful federal tax savings — we calculate the benefit as part of our annual planning process.

Does Colorado recognize the federal 1031 exchange rules?

Yes, Colorado follows federal like-kind exchange rules under Section 1031, allowing CO real estate investors to defer gain when exchanging qualifying properties. There is no state capital gains rate separate from CO's flat 4.4% rate, and a completed 1031 exchange defers both federal and CO capital gains tax. Boot received in an exchange (cash or non-like-kind property) is taxable in the year received at both federal and CO rates. CO also follows the federal qualified opportunity zone deferral rules.