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Colorado's top income tax rate jumps from Utah's level into the top 10 with New York

Amendment 87's 8.4% rate on income over $1 million moves Colorado from 30th to 10th among the 50 states and D.C. starting in 2027, and makes it the highest in the Mountain West. Six charts for Steamboat property owners and investors.

Anna Parashina

— 5 min read
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Steamboat Resort's ski runs under thin early snow on Nov. 4, 2026, with the text: Colorado's top income tax rate, 4.4% to 8.4%, 30th to 10th of 51 for top earners, from 2027
Steamboat Resort, Nov. 4, 2026.

Key points

  • Colorado voters approved Amendment 87, which replaces the state's 4.4% flat income tax with six brackets from 3.7% to 8.4% starting with the 2027 tax year, according to unofficial results and the Associated Press.
  • By the Independent's calculation against other states' 2026 rates, Colorado's top rate moves from 30th to 10th among the 50 states and D.C. Only California, Hawaii, New York, New Jersey, D.C., Oregon, Minnesota, Massachusetts and Vermont would be higher.
  • Among the eight Mountain West states, Colorado goes from fifth to highest, above Utah, Idaho, Montana and Wyoming, but stays below New York's 10.9%.
  • Anyone with taxable income below $510,834 pays less, by up to $325; above that, the bill rises. On $2 million of taxable income, the tax goes from $88,000 to $143,925.
  • The rates apply to federal taxable income, which includes capital gains, so one large property sale can reach the top brackets.

This year, Colorado's flat 4.4% income tax sits a hair below Utah's 4.45%. Starting with the 2027 tax year, Colorado's top rate will rank among the 10 highest in the country, alongside New York and California, after voters approved Amendment 87 last week, according to unofficial results.

For most Steamboat households the change is a small cut. For investors and second-home owners with large incomes, or a large sale, it brings the highest top rate in the Mountain West.

Column chart of top state income tax rates, highest to lowest, with Colorado's 2026 rate of 4.4% ranking 30th of 51 and its 2027 rate of 8.4% ranking 10th; New York 10.9%, Montana 5.65%, Idaho 5.3%, Utah 4.45% and Wyoming 0% marked
Colorado's 2027 top rate is compared with other states' rates for 2026.

How Colorado ranks

Measured by its top rate, Colorado was 30th of the 50 states and D.C. in 2026, higher than 21 of the other 50. At 8.4%, it would be 10th, higher than 41, by the Independent's calculation against other states' 2026 rates. Counting only the 41 states that tax wages, plus D.C., it moves from 30th to 10th of 42.

Dumbbell chart: Colorado's top rate was higher than 42% of the other states and D.C. in 2026 and would be higher than 82% in 2027; among the 42 that tax wages, 29% to 78%; among 8 Mountain West states, 5th to 1st
By the Independent's calculation.

Other states can change their rates before 2027. Montana's top rate is already set to fall to 5.4% next year, and Montana's governor proposed a flat 4.7% in September.

Ski states and New York

Colorado's 8.4% applies to taxable income above $1 million. The measure sets one bracket schedule for every individual, so the threshold is the same for single filers and married couples.

Bar chart of top income tax rates: New York 10.9%, Colorado 2027 8.4%, Montana 2027 5.4%, Idaho 5.3%, Utah 4.45%, Colorado 2026 4.4%, Wyoming 0%, with the income where each top rate starts
Where each top rate starts, for a married couple filing jointly.

Wyoming has no income tax. Utah taxes income at a flat 4.45% after its sixth straight cut this year, and Idaho at a flat 5.3%. Montana's top rate is 5.65% this year and 5.4% in 2027, on income above $130,000 for married couples.

New York's top rate is higher, 10.9%, but starts at $25 million. Its 9.65% bracket starts at $2,155,350 for married couples and $1,077,550 for single filers. New York also takes back the benefit of its lower brackets from many high earners, and it has local income taxes that the state figures here leave out.

What it means in dollars

The new rates cut the tax on the first $100,000 of taxable income, leave the rate at 4.4% up to $500,000, then rise in three steps.

Step chart of Colorado's tax rate on each added dollar: flat 4.4% in 2026; in 2027, 3.7% to $25,000, 4.2% to $100,000, 4.4% to $500,000, 7.4% to $750,000, 7.9% to $1 million and 8.4% above
The brackets are the same for single and joint filers and aren't adjusted for inflation.

Anyone with taxable income below $510,834 pays less, by up to $325 a year, according to the state's nonpartisan Legislative Council staff. At $510,834 and above, the bill goes up.

Bar charts of state income tax for a married couple on $300,000, $750,000 and $2 million of taxable income in Colorado 2026 and 2027, Utah, Idaho, Montana and Wyoming
By the Independent's calculation from each state's brackets, before credits.

On $750,000 of taxable income, Colorado's tax would be $40,175, a bit more than Montana's $39,590 or Idaho's $39,240. On $2 million, it would be $143,925: $36,835 more than Montana and $38,435 more than Idaho, by the Independent's calculation.

The brackets aren't adjusted for inflation, so more income will fall into the higher brackets over time, the staff analysis says.

Selling a property

Amendment 87's rates apply to federal taxable income, which includes capital gains. A seller with a large gain in one year can reach the 7.4% to 8.4% brackets.

Bar chart of the highest state rate on a long-term real estate gain: Colorado 2027 8.4%, Utah 4.45%, Colorado 2026 4.4%, Montana 4.1%, Idaho 2.12% after its 60% deduction, Wyoming 0%
Idaho's figure is 5.3% on the 40% of the gain left after its deduction, by the Independent's calculation.

Two other ski states tax those gains at lower rates. Montana taxes long-term capital gains at separate rates of 3% and 4.1%. Idaho lets owners deduct up to 60% of the gain on Idaho real property held at least 12 months, which leaves an effective top rate of 2.12% by the Independent's calculation.

What we don't know yet

  • Final results. The figures are unofficial until the Secretary of State certifies them.
  • Out-of-state owners. Today, Colorado's Department of Revenue has nonresidents figure their tax as if they were full-year residents, then pay the share tied to their Colorado income, such as rent or a gain on Colorado property. Under that method, the bracket would follow an owner's total income. Whether the department keeps that method for 2027 is a question for the department.
  • Other states. Utah has cut its rate six years running, and Montana's governor wants a flat 4.7%. Any change before 2027 would move these comparisons.
  • The money. The new revenue must go to K-12 education, health care and early childhood programs; the legislature decides which ones.

Sources