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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Alaska VS COUNTRY B Colorado

Side-by-side analysis of income tax, effective rates, and take-home pay for Alaska and Colorado in 2026.

Daniel · CountryTaxCalc Updated June 2026 Tax Comparison 2026
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OVERVIEW
Alaska and Colorado attract similar demographics — outdoor enthusiasts, remote workers, and those who value dramatic natural landscapes — but their tax structures differ markedly. Alaska has no income tax and uniquely pays its residents an annual Permanent Fund Dividend (PFD) of approximately $1,702 per person, funded by oil revenues. Alaska also has no state-level sales tax, though many municipalities charge local rates (Anchorage charges 0%; Juneau charges 5%; the statewide average in areas with a local tax is approximately 1.76%). Colorado charges a 4.4% flat income tax partially offset by TABOR refunds (~$800/filer annually) and has one of the lowest property tax rates in the US (~0.55%). At $100,000 income with a $300,000 home, Alaska's total tax burden — after PFD income — is dramatically below Colorado's: approximately $1,946 for Alaska vs $7,500 for Colorado, a difference of approximately $5,554/year in Alaska's favour. Even without the PFD, Alaska leads by approximately $3,852. Alaska's property tax (~1.04%) is higher than Colorado's (~0.55%), but the income tax and PFD advantages dwarf this difference at virtually all income levels. The key trade-off is practical: Alaska's geographic isolation, extreme climate, high cost of living in many areas, and distance from the continental US are real lifestyle considerations that Colorado's Rocky Mountain outdoor lifestyle and Denver career ecosystem do not share.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.
🐻
COUNTRY A
Alaska
TAX RATE
0%
No Income Tax — State Pays Residents the Permanent Fund Dividend
No income tax; no state sales tax (local varies; ~1.76% average in areas that charge it); property tax ~1.04% average; Permanent Fund Dividend (PFD) ~$1,702/person annually; no estate tax; no capital gains tax
🏔️
COUNTRY B
Colorado
TAX RATE
4.4%
Flat Income Tax — TABOR Refunds Partially Offset; Very Low Property Tax
4.4% flat income tax on all income; TABOR refunds ~$800/filer annually in recent years; 2.9% state sales tax (~7.5% combined average); property tax ~0.55% average (one of the lowest in the US); no estate tax; capital gains taxed as ordinary income at 4.4%
TYPICAL ANNUAL DIFFERENCE
Moving from Colorado → Alaska at Net annual Alaska advantage vs Colorado at $100K income (income tax + PFD advantage minus property tax premium; grows with income as CO income tax increases)
$5,554+ net (including PFD); $3,852+ without PFD
That's $463+/month net at $100K income including PFD back in your pocket
Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.
GROSS INCOME
🐻 AK TAX
🏔️ CO TAX
SAVINGS
10-YEAR
$50,000
$0 income tax; ~$2,444 property (1.04% × $235K home); ~$352 sales (1.76% avg × $20K spending) − $1,702 PFD = ~$1,094 net total
~$2,200 income tax (4.4%); −~$800 TABOR = ~$1,400 net; ~$1,293 property (0.55% × $235K home); ~$1,500 sales (7.5% × $20K) = ~$4,193 total
AK total ~$1,094 vs CO ~$4,193 = ~$3,099 AK advantage at $50K (including PFD); ~$1,397 without PFD
$30,990 including PFD; $13,970 without PFD
$100,000
$0 income tax; ~$3,120 property (1.04% × $300K home); ~$528 sales (1.76% × $30K) − $1,702 PFD = ~$1,946 net total
~$4,400 income tax (4.4%); −~$800 TABOR = ~$3,600 net; ~$1,650 property (0.55% × $300K home); ~$2,250 sales (7.5% × $30K) = ~$7,500 total
AK total ~$1,946 vs CO ~$7,500 = ~$5,554 AK advantage at $100K (including PFD); ~$3,852 without PFD
$55,540 including PFD; $38,520 without PFD
$200,000
$0 income tax; ~$5,200 property (1.04% × $500K home); ~$704 sales (1.76% × $40K) − $1,702 PFD = ~$4,202 net total
~$8,800 income tax (4.4%); −~$800 TABOR = ~$8,000 net; ~$2,750 property (0.55% × $500K home); ~$3,000 sales (7.5% × $40K) = ~$13,750 total
AK total ~$4,202 vs CO ~$13,750 = ~$9,548 AK advantage at $200K (including PFD)
$95,480 including PFD
$300,000
$0 income tax; ~$7,280 property (1.04% × $700K home); ~$880 sales (1.76% × $50K) − $1,702 PFD = ~$6,458 net total
~$13,200 income tax (4.4%); −~$800 TABOR = ~$12,400 net; ~$3,850 property (0.55% × $700K home); ~$3,750 sales (7.5% × $50K) = ~$20,000 total
AK total ~$6,458 vs CO ~$20,000 = ~$13,542 AK advantage at $300K (including PFD)
$135,420 including PFD
$1M capital gain
$0 state capital gains tax (Alaska: no income or capital gains tax of any kind)
~$44,000 Colorado state capital gains tax (CO taxes capital gains as ordinary income at 4.4%; TABOR does not separately offset capital gains tax)
AK saves ~$44,000 on a $1M capital gain event vs Colorado; PFD adds an additional ~$1,702/person annually regardless
Depends on frequency of gain events
💡

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🐻

Alaska Pros & Cons

+ PROS
  • No income tax plus Permanent Fund Dividend — Alaska charges $0 income tax and pays residents approximately $1,702/person per year (2023 PFD); for a family of four, that's approximately $6,808 in annual PFD income on top of zero state income tax; Colorado charges 4.4% and pays only ~$800 TABOR back
  • No state sales tax — Alaska has no state-level sales tax; many areas (including Anchorage, the state's largest city) have no local sales tax either; the statewide effective average is approximately 1.76% for areas that do charge; Colorado's combined average is ~7.5%
  • No capital gains tax — Alaska charges $0; Colorado taxes capital gains as ordinary income at 4.4%; a $1M gain saves approximately $44,000 vs Colorado
  • PFD creates recurring passive income — Alaska's Permanent Fund Dividend is a unique benefit; over 10 years, a family of four receives approximately $68,000+ in PFD distributions regardless of income level
− CONS
  • Higher property tax than Colorado — Alaska's ~1.04% exceeds Colorado's ~0.55%; on a $400,000 home, AK pays approximately $1,960/year more; this partially reduces Alaska's income advantage but does not eliminate it at any income level
  • Geographic isolation and high cost of living — Alaska's remoteness from the continental US means higher costs for many goods, travel, and services; Anchorage's cost of living index exceeds Denver's in many categories; the lifestyle trade-off is significant
  • Extreme climate — Alaska's winters, particularly outside Anchorage, are among the most extreme in the US; for residents prioritising outdoor recreation in temperate conditions, Colorado's 300+ days of sunshine and accessible mountains are preferable
🏔️

Colorado Pros & Cons

+ PROS
  • Very low property tax — Colorado's ~0.55% is one of the lowest in the US and well below Alaska's ~1.04%; for homeowners with expensive Denver metro or mountain properties, this is a meaningful structural advantage
  • TABOR refunds reduce income tax burden — Colorado returns approximately $800/filer per year; at $50,000 income, TABOR cuts the effective income tax burden meaningfully; though it's a small portion of Alaska's PFD + zero income tax advantage
  • Denver career ecosystem and Rocky Mountain lifestyle — Denver's aerospace, tech, energy, and outdoor recreation industries offer career access Alaska cannot match; the Rocky Mountains are accessible from Denver in under 2 hours
  • Continental US convenience — Colorado's location in the continental US means lower travel costs, easier access to major markets, and no supply chain premiums on goods that Alaska residents typically absorb
− CONS
  • 4.4% flat income tax on all income — Colorado residents pay 4.4% from the first dollar; at $200,000, approximately $8,800/year before TABOR; Alaska residents pay $0 and receive ~$1,702 in PFD
  • Capital gains taxed as ordinary income — Colorado taxes all capital gains at 4.4% with no preferential rate; Alaska charges $0; a $1M capital gain costs approximately $44,000 in Colorado state tax
  • Higher combined sales tax — Colorado's ~7.5% combined average exceeds Alaska's effective ~1.76% average; on $30,000/year of spending, approximately $1,722/year more than Alaska
  • TABOR refund is not proportional — the ~$800 TABOR refund is fixed; Alaska's PFD pays the same ~$1,702 per person regardless, but Alaska also has no income tax to start
FAQ

Frequently Asked Questions

What is Alaska's Permanent Fund Dividend?

The Alaska Permanent Fund Dividend (PFD) is an annual payment made to Alaska residents from the earnings of the Alaska Permanent Fund, a sovereign wealth fund created from oil revenues. The amount varies annually based on fund performance and legislative appropriation. In 2023, the PFD was approximately $1,702 per eligible resident. A family of four receives approximately $6,808/year. To qualify, residents must have lived in Alaska for the full calendar year and intend to remain.

Does Alaska have a sales tax?

Alaska has no state sales tax. However, many municipalities charge local sales taxes — Juneau charges 5%, Sitka charges 5%, but Anchorage (the largest city) charges 0%. The statewide effective average is approximately 1.76% for areas that have a local tax. This makes Alaska significantly below Colorado's ~7.5% combined average, and below the national average of approximately 7.1%.

How do property taxes compare between Alaska and Colorado?

Alaska's effective property tax rate (~1.04%) is nearly double Colorado's (~0.55%). On a $400,000 home: Alaska costs approximately $4,160/year; Colorado approximately $2,200/year — a difference of approximately $1,960/year. While Alaska's property tax is higher, this is more than offset by the income tax saving ($4,400 at $100K) and PFD ($1,702/person), making Alaska significantly better overall at virtually all income levels.

Is Alaska or Colorado better for remote workers?

Alaska is financially superior for remote workers. At $100,000 income, Alaska's combination of 0% income tax and PFD creates a net tax burden of approximately $1,946 vs Colorado's approximately $7,500 — a difference of approximately $5,554/year. However, Alaska's geographic isolation, higher cost of living for many goods, and extreme climate are practical considerations. Remote workers with family in the continental US or frequent travel needs may find Colorado's Denver location more livable despite the higher taxes.

What is Colorado's TABOR refund?

Colorado's Taxpayer's Bill of Rights (TABOR) requires excess state revenues to be refunded to income tax filers, approximately $800/person per year in recent years. This reduces Colorado's effective income tax: at $100,000 income, gross income tax is $4,400, net after TABOR is approximately $3,600. While TABOR is a Colorado-specific advantage, Alaska's PFD (~$1,702/person) plus zero income tax creates a much larger financial benefit for Alaska residents at all income levels.

Is Alaska or Colorado better for retirees?

Alaska is financially superior for retirees. With 0% income tax on retirement distributions, IRA withdrawals, and investment income — plus the annual PFD — Alaska retirees face minimal state tax burden. A retired couple could receive approximately $3,404 in PFD annually, tax-free. Colorado's 4.4% flat rate applies to retirement income. Alaska also has no estate tax. The key trade-off is climate and access to services — many retirees find Colorado's milder climate, healthcare access, and family proximity more practical than Alaska.
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