Colorado holds steady at the 20th spot on the Tax Foundation’s 2022 State Business Tax Climate Index. There’s been no movement in ranking from 2021 despite simplification efforts underway. Read more on how states compare.
By TaxOps
Colorado, despite efforts to simplify its tax regime at the statehouse level, remains ranked 20th on this year’s 2022 State Business Tax Climate Index, released by the Tax Foundation. When it comes to corporate and individual taxes, Colorado ranks better than most states, but in the sales tax, property tax, and unemployment insurance tax categories, the state doesn’t do so well stacked up against other states.
Sales tax simplification efforts appear to have stalled out. Colorado fell in ranking by two spots for sales tax policy, despite the introduction of the Sales and Use Tax Systems (SUTS) in recent years. Complicating Colorado’s sales tax picture is home rule cities, which require their own licenses, rates and rules, and the state has yet to uncomplicate this process to reduce the burden on businesses.
Among neighboring states, Wyoming and Utah do tax better than Colorado, while Arizona, Kansas, Oklahoma, New Mexico and Nebraska fair worse when it comes to tax practices.

The Index lists five states at the top, including Wyoming, South Dakota, Alaska, Florida, and Montana. Hovering at the bottom of the Index are the states of New Jersey, New York, California. Connecticut, and Maryland. The Tax Foundation states:
The absence of a major tax is a common factor among many of the top 10 states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax. Nevada, South Dakota, and Wyoming have no corporate or individual income tax (though Nevada imposes gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida and Tennessee have no individual income tax; and New Hampshire and Montana have no sales tax.
Read more at the Tax Foundation.
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