Amendment 87: Colorado’s flat income tax is gone after 39 years

By Shaina Cole | Contributing Writer, Rocky Mountain Voice

Colorado has taxed every dollar of income at a single rate since 1987. Voters ended that Tuesday. The new rates begin with tax year 2027.

Amendment 87 passed with 51.37 percent, 1,324,554 to 1,253,718, a margin of 70,836 in the Secretary of State‘s count last updated at 10:39 p.m. MST Thursday. The Associated Press called it approved at 10:49 a.m. MST Friday.

It needed a simple majority, according to the Blue Book, not the 55 percent that applied to the six other amendments on the ballot. All six of those failed.

The constitution exempts an initiated amendment from the 55 percent rule when its constitutional change is limited to a repeal.

What replaces the flat rate

The measure removes the Taxpayer’s Bill of Rights (TABOR) requirement that all taxable net income be taxed at one rate, according to Legislative Council Staff. The certified text then writes six brackets into statute at 39-22-104.

Federal taxable income up to $25,000 is taxed at 3.71 percent. From there it runs 4.21 percent, then 4.40 percent, then 7.41 percent above $500,000, 7.90 percent above $750,000 and 8.41 percent above $1 million.

Each rate applies only to the portion of income inside that bracket, the way the federal brackets work. Corporations follow the same schedule under a separate section.

Gain on the sale of a principal residence above the amount the federal government excludes is still taxed at 4.4 percent.

The brackets do not move with inflation

Unlike the federal brackets, Colorado’s new ones are not adjusted for inflation, so “more of taxpayers’ incomes will fall into the higher brackets over time,” the Blue Book says.

Nothing in the measure revisits them. Changing a bracket later would take the legislature, or another ballot measure.

Who pays it

The crossover is $510,834 in Colorado taxable income. Below that, the measure cuts what a filer owes, to a maximum of $325. At that figure and above, it raises it.

Legislative Council Staff counted 46,328 taxpayers reporting federal adjusted gross income of $1 million or more, and put their combined increase at $1,208,468,497, an average of $26,085 each.

The bracket just below them does not follow the pattern. Among the 55,900 taxpayers reporting between $500,000 and $999,999, the staff estimated an average cut of $284.

Three different measures are in play. The brackets run on federal taxable income, the crossover on Colorado taxable income and these estimates on federal adjusted gross income. The Blue Book warns the ranges in its two tables do not align.

The ballot said $2.7 billion

That figure is a ceiling, not a forecast.

State law requires Legislative Council Staff to put the maximum dollar change for the first full fiscal year in the ballot question itself. The number it actually forecasts is lower. An increase of $958.4 million in budget year 2026-27, which is a half year, and $1.972 billion in 2027-28, the first full one.

The Blue Book says the measure has no effect on current TABOR refunds or the mechanisms that produce them. Under current law the state expects to collect $15 billion in income tax in 2028. Under Amendment 87 it expects $17 billion, with the increase exempt from the TABOR limit as a voter-approved revenue change.

Where the money goes, and who decides

The measure creates an account inside the General Fund and sends the new revenue there. Spending is limited to K-12 education, health care, and early child care and education. It must supplement rather than supplant what the state already spends.

Within those three categories the General Assembly decides. The measure lists purposes, not programs or amounts.

It also calls its own fund two different things. The legislative declaration names the Colorado’s Future Fund. The operative statute creates the Colorado Future’s Account.

Two reporting requirements come with it. Legislative Council’s research director must produce an annual public report on how the money was spent, in plain language and, where possible, with understandable visualizations. The Office of the State Auditor must audit that report every year.

Voters rejected the cap built to stop it

Proposition 136 would have capped the income tax rate at 4.4 percent for individuals and corporations. Advance Colorado’s Suzanne Taheri and Michael Fields filed it, and one committee backing it registered with the state under the name “No on 87, Yes on 136.”

It failed with 47.28 percent.

Had both passed, the Blue Book said the outcome would have been unclear and the legislature or a court would have had to sort it out. That question is closed.

The court order was 47 words

Amendment 87 almost did not get counted. Michael A. Hancock, an Arapahoe County opponent of the measure and no relation to Denver’s former mayor, sued to keep it off the ballot. He argued that paid circulators who gathered signatures were never registered as state law requires, and that invalidating their signatures would drop the petition below the constitutional threshold.

His brief to the Supreme Court said at least 66 of the 311 paid circulators were unregistered.

Denver District Court Judge Heidi L. Kutcher dismissed it, Colorado Public Radio reported. The Colorado Supreme Court upheld that on Oct. 30 in an order that ran 47 words.

“Votes cast on Initiative 2025-2026 # 195 (also known as ‘Amendment 87’) shall be counted,” it read, according to KUNC. The court said it would issue an opinion in due course.

Chris deGruy Kennedy, who filed the initiative with Kiyana Newell, co-chairs Protect Colorado’s Future and is president of the Bell Policy Center, acknowledged what he called administrative oversights in the signature gathering.

“We have been open about that from the start,” he said. “The people behind this lawsuit have not been open about anything. They have spent what must be an enormous sum on lawyers to keep voters from having a say, and they still will not tell Colorado who they are or how much they have spent.”

Jason R. Dunn, a former Colorado deputy attorney general who led Hancock’s legal team, was not satisfied with the ruling.

“The result is disappointing as it leaves a system in which there will be little accountability for those who collect signatures and fail to follow the rules,” Dunn said.

Four committees registered in favor of Amendment 87 with the state. Eight registered against it, according to the issue committee filings.

Where the count stands

Amendment 87 passed 1,324,554 to 1,253,718 out of 2,578,272 votes cast on the question.

AP has called all 14 statewide measures. Seven passed and seven failed. Amendment 87 is the only amendment of the seven on the ballot that voters approved.

None of these results are official.