Colorado ranks 48th among the 50 states in tax revenues compared to personal income. The state ranks 18th, with per capita state and local taxes averaging 5% lower than the national average.
Because of its extensive oil and gas activity, Weld County has been able to maintain a real estate property tax level that is significantly lower than the surrounding areas. This translates into a competitive advantage for businesses.
Doing Business In Dacono
Colorado levies a 2.9% sales tax, which is the lowest among the 45 states that collect sales tax. Services are not taxed, only sales of non-food items are taxed. The City of Dacono’s sales tax rate is 3%. Weld County does not have a sales tax. The City of Dacono use tax is 3% applied to motor vehicles and building materials.
Property & Personal Property Tax
The assessment rate for commercial and industrial property in Colorado is set at 29% of market value, while the residential rate is adjusted every two years during reappraisal years. The residential assessment rate is 6.95% and may be adjusted by the Colorado Legislature. Property taxes are assessed on any real and/or personal property (land, buildings, furniture, equipment, etc.), which directly or indirectly produce income within your business. The County Assessor determines the value of property using a market, cost or income approach. Property taxes are assessed on a percentage of actual value.
Land and improvements are considered real property. There is another class of property, personal property, which is assessed under certain conditions. Personal property includes household furniture, carpets, drapes, and appliances. Such property is subject to property tax only if it is used to produce income, such as a furnished rental property. Commercial and industrial accounts make up the majority of personal property value, such as oil and gas pumping equipment and movable manufacturing machinery
The assessment rate, which is used to calculate the assessed value, is determined by the Colorado Constitution and statutes. For 2022 the assessment rates are as follows:
- Vacant Land: 29%
- Residential: 6.95%
- Commercial: 29%
- Industrial: 29%
- Agricultural: 26.4%
- Personal Property: 29%
- Multi-family residential 6.8%
- Oil and Gas: 87.5 % of production value if primary well - 75% of production value if secondary well
The corporate income tax rate in Colorado is among the lowest in the nation at 4.63%. Recent legislation simplified Colorado's corporate tax structure by establishing a single sales factor for multi-state corporations, creating an incentive for companies that want to build their workforce and increase their physical presence in Colorado, and rewarding companies currently investing in the people and infrastructure of the state.
Colorado offers businesses the choice to calculate their state tax liability on the basis of the standard three-factor formula (revenue, property, and payroll), or a two-factor formula (revenue and property), whichever is less. Only domestic operations and income are included in the apportionment formulas. Colorado is a “water's edge” unitary tax state.
Personal Income Tax
In 1987, the Colorado Legislature adopted a flat tax structure that greatly simplifies the determination of Colorado income tax liability. The individual income tax rate effective January 1, 2022 is 4.55%. When comparing tax revenues relative to personal income, Colorado places 48th among the 50 states for state level taxes.
The City of Dacono does not assess an occupational tax.
Unemployment Insurance Tax
Unemployment insurance tax liability is based on the taxable wage base, which is the first $10,000 of each worker’s wage. If covered for the first time, the tax rate will be 1.7% of the wage base or a rate equal to the industry average, whichever is greater. Upon the 3rd and 4th years of coverage, the rate is changed to a computed rate based on the employer’s individual experience.