Colorado voters face two income tax measures written to collide. What Amendment 87 and Proposition 136 would mean for households and business owners

DENVER — Colorado voters already have ballots in hand for the Nov. 3 election, and two measures on them are written to collide. Amendment 87 would end the state’s flat 4.4% income tax and replace it with six graduated brackets topping out at 8.4%. Proposition 136 would lock the rate at 4.4%. In ballot recommendations reported Oct. 13, Gov. Jared Polis urged a no vote on the first and a yes on the second, and by Oct. 14 campaign filings showed millions of dollars, much of it from groups that do not disclose donors, flowing into the fight.

The two measures are the most consequential tax choice on the 2026 ballot for many households and nearly every business owner who reports company profits on a personal return. Here is what each one does, what the state’s nonpartisan analysts project, and what is still unsettled.

What would Amendment 87 change about Colorado income tax?

Colorado has taxed individual and corporate income at a single rate since 1987, when it became the first state to drop a graduated system, according to the Tax Foundation. The 1992 Taxpayer’s Bill of Rights, or TABOR, later wrote the single-rate requirement into the state constitution.

Amendment 87 would delete that requirement. The state’s official ballot information booklet, the Blue Book, lays out the proposed schedule beginning in tax year 2027:

Each rate applies only to the slice of income inside its bracket, and the brackets are not indexed to inflation. Because only language is being removed from the constitution, the Tax Foundation notes, the measure needs a simple majority rather than the 55% most constitutional amendments now require.

For most filers the change would be small and downward. CBS News Colorado, citing state analysts, reported that people earning below about $550,000 would save $175 to $325 a year, while those above that line would pay $1,175 to $55,925 more. A University of Denver panel on Oct. 7, reported by Colorado Politics, walked through the top of that range: a $2 million earner would owe about $143,925 instead of $88,000.

How much money would it raise, and where would it go?

The Blue Book estimates about $958.4 million in the 2026-27 budget year, a half-year effect, and about $1.97 billion in 2027-28, the first full year. The ballot title uses a ceiling of $2.7 billion for 2027-28, the figure Polis has cited in calling the measure a tax increase larger than all other tax proposals on the ballot combined, according to Complete Colorado.

The new revenue would be limited to K-12 education, health care and early childhood programs, with lawmakers deciding the split, and it would be exempt from TABOR’s revenue cap, according to Colorado Politics and CBS News Colorado. Supporters in the Protect Colorado’s Future coalition, which includes the Bell Policy Center and the Colorado Fiscal Institute, say about 97% of taxpayers would see a cut.

What does Proposition 136 do, and what if both pass?

Proposition 136 is a statute, not a constitutional amendment. It would cap both the individual and corporate income tax rates at 4.4% starting Jan. 1, 2027, Colorado Public Radio reported. It would not change anyone’s current bill. Its sponsor is Advance Colorado, a conservative group led by Michael Fields, and the Colorado Chamber of Commerce has argued it would keep the tax structure predictable for employers.

Because it is a statute, a later simple-majority vote could repeal it, and TABOR already requires voter approval for rate increases, the Tax Foundation notes. Its practical role is as a competitor to Amendment 87.

If both pass, the result is not clear. The Blue Book says the measure with more votes generally controls conflicting provisions, but that the legislature or a court may have to resolve it. CBS News Colorado described one plausible outcome if Proposition 136 wins more votes: the lower brackets of Amendment 87 could take effect while the top rates are held to 4.4%. The Tax Foundation flagged a more awkward literal reading and said courts would likely apply the cap to all income.

Why business owners are watching closely

Most small companies in Colorado are pass-through entities, meaning profits are taxed on the owners’ personal returns. The Tax Foundation counts 731,000 small businesses in the state employing almost half of the state’s workers, and says that of 53,640 filers with income above $500,000, 30,850 report partnership or S corporation income. That is the core of the dispute over who actually pays.

Polis argues most of the new tax would land on small and midsize businesses rather than wealthy individuals. Supporters counter that much of the revenue would come from companies based outside Colorado, according to CBS News Colorado. The Common Sense Institute, a business-oriented think tank, projected losses in personal earnings and corporate profits, figures cited at the DU panel. Critics also point out that unindexed brackets would pull more filers above $500,000 over time; Rep. Lorena Garcia, who supports the measure, responded at the panel that few people earn that much, so the near-term effect is limited.

For an owner near the $500,000 line, the planning questions are concrete: how business income flows to personal returns, whether income can be timed across years, and how a marriage affects the brackets. The Tax Foundation notes that the brackets are the same width for single and joint filers, which creates a marriage penalty at higher incomes. Those are questions for a tax advisor, not a ballot guide, but they are worth raising before 2027 estimated payments are set.

Who is paying for the campaigns?

Filings through the morning of Oct. 13, compiled by the Colorado Capitol News Alliance, show the pro-87 coalition had raised nearly $2 million, including $500,000 from philanthropist Merle Chambers. On the other side, the committee Don’t Price Us Out received $760,000 on Sept. 29 from American Prosperity Coalition, a group the report said has no online presence, plus $300,000 from Ready Colorado. Brighter Colorado, which opposes 87 and Proposition NN while backing other measures, had raised nearly $3 million, and Americans for Prosperity’s Colorado committee had raised and spent about $350,000 against 87.

Is Amendment 87 certain to count?

A lawsuit in Denver District Court, filed in September by an Arapahoe County voter, argues that 9,849 signatures came from circulators who lacked required training paperwork, Colorado Politics reported. The state validated 130,938 signatures against a requirement of 124,238; removing the challenged ones would leave the measure short. The case was unresolved as of the latest reports, and the measure remains on printed ballots.

What to watch next

• Ballot deadlines: Colorado Politics lists Oct. 26 as the last suggested day to mail a ballot and the last day to register and still receive one by mail. Drop boxes and vote centers take ballots until 7 p.m. on Nov. 3.
• The court case: A ruling on the signature challenge could affect whether votes on Amendment 87 are counted.
• Vote margins: If both measures pass, the relative yes totals will matter, and a legal fight over how they interact is likely.
• The state budget: The September legislative forecast projects a $1.58 billion gap for 2027-28 under one spending scenario, which frames how lawmakers would use, or replace, the revenue at stake.