Colorado ranks 10th in state tax index

Colorado ranks among the top 10 states in the latest analysis of how tax systems affect small business and entrepreneurship.

Colorado comes in at 10th in the 2012 Business Tax Index calculated by the Small Business & Entrepreneurship Council, an advocacy, research and networking organization based in Washington, D.C.

Colorado also ranked 10th in the 2011 index.

Raymond Keating, chief economist of the SBEC, calculates the annual index he said offers an important look at the accumulative effects of state tax systems.

“All taxes matter, whether imposed at the federal, state or local level of government,” Keating said. “They matter to consumers, entrepreneurs, investors and businesses. State and local levies matter in terms of a state’s competitiveness. And they matter when it comes to economic growth and job creation.”

The index combines 18 different tax measures into one score that offers comparisons among the 50 states as well as the District of Columbia. The lower the score, the higher the ranking.

Colorado received a score of 27.260 in the latest index and continues to fare well because of the comparatively lower tax rates assessed in the state.

Colorado assesses the eighth lowest corporate income taxes with a top rate of 4.630 percent. That same rate ranks as the 10th lowest corporate capital gains rate, 17th lowest personal income tax rate and 19th lowest personal capital gains rate.

Colorado ranks eighth in an assessment of unemployment taxes.

Colorado imposes the 14th lowest state and local sales taxes as measured as a share of personal income. Colorado ranks 21st for the lowest state and local property taxes as measured as a share of personal income.

Colorado assesses the 15th lowest state diesel tax and is tied for the 17th lowest state gasoline tax.

South Dakota ranked first in the 2012 Business Tax Index followed by Texas, Nevada, Wyoming and Washington. Minnesota ranked last in the index among the 50 states, followed by New Jersey, New York, Iowa and Maine.

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