Colorado will tax high earners at higher rates for the first time in 40 years after voters approved Amendment 87 with 51.4% of the vote.

The Associated Press called the race Friday morning, Nov. 6, according to the Colorado Sun. The measure replaces the state's flat 4.4% income tax with a six-bracket graduated system. It takes effect for tax year 2027.

As we reported Nov. 6, supporters had declared fvictory Thursday, Nov. 5, before the AP call. Opponents conceded Friday morning.

The change repeals a provision in the state constitution that required all Coloradans to pay the same income tax rate, regardless of income. Colorado last had a graduated income tax in 1986.

What it means for your tax bill

The new brackets lower rates on the first $100,000 of income and raise them above $500,000. Here is the structure, according to the Colorado Sun:

  • 3.7% on the first $25,000 (down from 4.4%)
  • 4.2% on income from $25,001 to $100,000 (down from 4.4%)
  • 4.4% on income from $100,001 to $500,000 (unchanged)
  • 7.4% on income from $500,001 to $750,000
  • 7.9% on income from $750,001 to $1 million
  • 8.4% on income above $1 million

A household earning $75,000 in taxable income will pay about $275 less per year, the Colorado Sun reported. A family earning $550,000 will pay about $1,175 more. Someone earning $10 million will owe an additional $376,000. The same brackets apply to business profits.

The brackets do not separate single and joint filers, according to the Colorado Sun's pre-election FAQ. Some dual-income households could face higher state taxes if they file jointly rather than individually.

The state's nonpartisan legislative council staff estimated that 3.4 million Coloradans would pay less in income tax, while about 64,000 would pay more, 9News reported.

The brackets are not indexed to inflation. Over time, the share of households paying higher rates would grow unless the legislature adjusts them, the Colorado Sun reported.

Where the money goes

The measure is estimated to generate about $2 billion in new annual revenue, according to the Colorado Sun. The legislature can direct that money to healthcare, public schools and childcare.

The revenue is expected to ease a state budget crunch. The legislature's Joint Budget Committee had faced the prospect of $1.6 billion in cuts, the Colorado Sun reported. Voters also approved Proposition NN on Tuesday, Nov. 3, a separate measure allowing the state to spend more on education.

Supporters and opponents

State Rep. Lorena Garcia, an Adams County Democrat, said at a Thursday rally in Denver that the campaign was "historic."

"We are finally demonstrating that Colorado voters aren't happy with Tabor, but that Colorado voters want to invest in our future, in our kids, in our health, in our communities," Garcia said, according to the Colorado Sun.

Colorado Chamber of Commerce President and CEO Loren Furman called the result a blow to small businesses in a Friday statement, the Colorado Sun reported. Furman said the tax increases "will force businesses to make difficult decisions about wages, hiring and future investments."

Gov. Jared Polis and Attorney General Phil Weiser, both Democrats, opposed the measure. Polis said it would harm the economy. Weiser said it did not give voters a clear enough description of how the state would spend the money, the Colorado Sun reported.

Voters defeated Proposition 136, which would have capped the state income tax rate at 4.4% and prevented Amendment 87's higher brackets. Its defeat cleared the way for Amendment 87's graduated rates.

What happens next

The Colorado Department of Revenue is updating income tax and withholding forms, CPR reported. Most changes will take effect in spring 2027, in preparation for the 2027 tax year. Employees may want to complete a new 2027 withholding certificate to check whether their withholding will change, a department spokesperson told CPR.