Colorado ranks 10th in small business tax index

Raymond Keating
Raymond Keating

Colorado ranks 10th among the 50 states in the latest analysis of how taxes affect small businesses and entrepreneurs.

Colorado fares well for comparatively low corporate income and capital gains taxes and even lower fuel taxes.

The Small Business & Entrepreneurship Council compiles its annual Small Business Tax Index by combining 26 separate measures of state and local taxes into one score and then ranking states by those scores.

Raymond Keating, chief economist of the small business advocacy and research group, said there’s a correlation between taxation and economics. “In the end, if the state’s tax burden is light on economic risk taking, then that will be good news for entrepreneurship, businesses, investment, economic and income growth and job creation in each state.”

While there’s discussion in the Trump  administration and Congress about federal tax reforms, the same issues apply at the state and local levels, Keating said. “That’s the focus of SBE Council’s Small Business Tax Index 2017. Specifically, which states are among the least burdensome in terms of taxes and which inflict the weightiest burdens on small businesses?”

Colorado ranks 10th overall in the 2017 Small Business Tax Index and also ranks among the top 20 states in eight tax measures.

Colorado ranked ninth for the lowest state diesel tax at 20.5 cents a gallon and 12th for the lowest gasoline tax at 22 cents a gallon.

With a top rate of 4.63 percent, Colorado assesses the 10th lowest corporate income taxes and 12th lowest corporate capital gains taxes. At that same top rate, Colorado  came in 18th for lowest personal income taxes and 20th for lowest personal capital gains taxes.

The state assesses the 15th lowest dividends and interest tax rate and 19th lowest adjusted unemployment tax rate.

Colorado ranks closer to the middle at 21st for state and local sales taxes as a share of personal income and 25th for state and local property taxes as a share of income.

Nevada remains at the top of the overall ranking for 2017, followed by Texas, South Dakota, Wyoming and Washington.

California ranks last, followed by New Jersey, Maine, Minnesota and Iowa.