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Advantages of a Corporation
Disadvantages of a Corporation
Federal Tax Forms for Regular or "C" Corporations
Colorado’s 2011 Business Tax Climate Ranks 15thColorado ranks 15th in the Tax State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. The ranks of neighboring states were as follows: Arizona (34th), Utah (9th), Wyoming (3rd), Nebraska (29th), Kansas (35th), Oklahoma (30th) and New Mexico (33rd).Colorado's Individual Income Tax SystemColorado's personal income tax system consists of a flat tax of 4.63% on the entirety of an individual's taxable federal income. That top rate ranks 38th highest among states levying an individual income tax. In 2006 Colorado's state-level individual income tax collections were $1,037 per person, which ranked 16th highest nationally. Since most small businesses are either S Corporations or partnerships or sole proprietorships, they pay their business taxes at the rates for individuals. The state's low income tax rate makes the tax environment for small businesses in Colorado competitive compared to other states.Colorado's Corporate Income Tax SystemColorado's corporate tax structure consists of a flat rate of 4.63% on all corporate income. Among states levying corporate income taxes, Colorado's rate ranks 44th highest nationally. In 2008, state-level corporate tax collections (excluding local taxes) were $104 per capita, which ranked 38th highest nationally among states that tax corporate income.Colorado Sales and Excise TaxesColorado levies a 2.9% general sales or use tax on consumers, one of the lowest rates among states levying a sales tax. In 2007 combined state and local general and selective sales tax collections were $1,374 per person, which ranked 25th highest nationally. Colorado's gasoline tax stands at 22 cents per gallon (31st highest), while its cigarette tax stands at $0.84 per pack of twenty (32nd highest). The sales tax was adopted in 1935, the gasoline tax in 1919 and the cigarette tax in 1964.
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