Selling a business in Colorado: what the state takes (2026)
Colorado’s top individual income tax rate is 4.4%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 4.4%
- Top Colorado income tax rate (2026)
- $1,100,000
- State tax on a $25M long-term gain
- 28.2%
- Combined federal and state rate on $25M
- 27 of 51
- Rank by total tax on $25M (1 = highest)
How Colorado taxes a business sale
- Income tax
- Top rate 4.4%: Flat 4.4% on all taxable income.
- Long-term capital gains
- Capital gains are taxed as ordinary income at the flat 4.4% rate, with no general exclusion.
- Relief that applies only in some sales
- The Colorado capital gain subtraction (CRS 39-22-518) once covered stock in Colorado companies held 5+ years, up to $100,000. Since tax year 2022 it is limited to taxpayers who file Schedule F, on Colorado agricultural land acquired between May 9, 1994 and June 4, 2009 and held 5+ years. It does not apply to a founder selling company stock.
- Local taxes
- No local income tax on capital gains. Tax Foundation notes some jurisdictions levy payroll or wage taxes (occupational privilege taxes).
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| Colorado tax | $440,000 | $1,100,000 | $2,200,000 |
| Total tax | $2,820,000 | $7,050,000 | $14,100,000 |
| Effective combined rate | 28.20% | 28.20% | 28.20% |
| Net proceeds after tax | $7,180,000 | $17,950,000 | $35,900,000 |
| Extra tax versus Texas | $440,000 | $1,100,000 | $2,200,000 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- Colorado tax
- $1,100,000
- Taxable gain at 4.4%
- $1,100,000
- Total tax
- $7,050,000
- Effective rate on the gain
- 28.20%
- Net proceeds after tax
- $17,950,000
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
Common comparisons
- California37.1% combined, $15.72M net
- New York34.1% combined, $16.48M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
Colorado figures are for tax year 2026. The DR 0104EP (2026) estimated-tax worksheet uses 4.4%. The DOR guide shows 4.4% for 2025 and a TABOR-triggered 4.25% for 2024. A temporary TABOR rate cut for 2026 under CRS 39-22-627 could still be triggered after the fiscal year closes; none has been announced. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1Colorado DOR DR 0104EP 2026 estimated tax worksheet (4.4%)
- 2Colorado DOR Individual Income Tax Guide (rate by year)
- 3CRS 39-22-518 (capital gain subtraction, Public.Law copy)
- 4Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
You may quote and republish figures from this page with attribution and a link to the source.
Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Colorado,” 2026, https://laurent.capital/research/seller-tax-map/coloradoLink (HTML)
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