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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Colorado VS COUNTRY B Washington

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

Daniel · CountryTaxCalc Updated April 2026 Tax Comparison 2026
Calculate your take-home → See all comparisons →
OVERVIEW
Washington State has no income tax on wages, saving $4,400 per year versus Colorado’s 4.4% flat rate on $100,000 of earned income. However, Washington carries several hidden tax costs that Colorado does not: a 7% capital gains tax on gains above $262,000, a $2.193 million estate tax threshold, a Bus…
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
Colorado
TAX RATE
4.4%
Flat Income Tax
Flat 4.4% state income tax on all wage income; Denver adds local sales tax
🌲
COUNTRY B
Washington
TAX RATE
0%
No Wage Income Tax
No income tax on wages; 7% capital gains tax only on gains above $262,000
TYPICAL ANNUAL DIFFERENCE
Moving from Washington → Colorado at $100,000
$4,400
That's $367/month 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
🏔️ CO TAX
🌲 WA TAX
SAVINGS
10-YEAR
$50,000
$2,200
$0
$2,200
$22,000
$75,000
$3,300
$0
$3,300
$33,000
$100,000
$4,400
$0
$4,400
$44,000
$150,000
$6,600
$0
$6,600
$66,000
$250,000
$11,000
$0
$11,000
$110,000
$500,000
$22,000
$0 wages ($16,590 cap gains if applicable)
$22,000 (wages only)
$220,000
💡

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🏔️

Colorado Pros & Cons

+ PROS
  • No capital gains tax — investors pay 0% state capital gains at all levels
  • Lowest state sales tax rate in the USA (2.9% state; Denver metro up to 8.81%)
  • No state estate tax
  • Denver OPT payroll tax is minimal at $5.75/month
− CONS
  • 4.4% flat income tax on all wages — costs $4,400/year more than Washington on $100K
  • Denver metro combined sales tax reaches 8.81% with local additions
  • Higher cost of living in Denver metro has risen sharply since 2015
  • No income tax benefit for high earners compared to Washington
🌲

Washington Pros & Cons

+ PROS
  • 0% income tax on wages — saves $4,400-$22,000/year vs Colorado depending on earnings
  • No personal income tax at any wage level
  • Strong tech job market (Amazon, Microsoft, Boeing) with high salaries
  • Higher property values support equity growth (1031 no state cap gains issue)
− CONS
  • 7% capital gains tax on net gains above $262,000 (enacted 2023, upheld by courts)
  • State estate tax on estates above $2.193M (rates up to 20% — highest in the USA)
  • B&O gross receipts tax on businesses (0.471% for services — applies even at a loss)
  • Seattle combined sales tax reaches 10.25% — higher than Denver and most major cities
FAQ

Frequently Asked Questions

Does Washington State have income tax?

Washington State has no income tax on wages or salaries. However, since 2023 Washington levies a 7% capital gains tax on net long-term capital gains above $262,000 per year. This means wage earners pay 0%, but investors with large stock sales or business disposals may owe significant Washington state tax on gains above the threshold.

What is Washington’s estate tax and how does it compare to Colorado?

Washington has a state estate tax on estates above $2.193 million (2026), with rates ranging from 10% to 20% — the highest top rate of any US state. Colorado has no state estate tax. For a $5 million estate, Washington could owe approximately $700,000-$800,000 in state estate tax that would not apply in Colorado. This makes Colorado significantly better for wealth transfer planning.

What is Washington’s B&O tax and does it affect me?

Washington’s Business and Occupation (B&O) tax is a gross receipts tax applied to all business revenue — not profit. Service businesses pay 0.471% on every dollar of revenue, regardless of whether the business is profitable. Colorado has no equivalent tax. The B&O tax is a meaningful cost for freelancers, consultants, and small business owners operating in Washington.

Is Colorado or Washington better for remote tech workers?

For pure income tax savings, Washington wins — saving a $150,000 tech worker $6,600/year vs Colorado. Seattle also offers Amazon and Microsoft HQ proximity and some of the highest tech salaries in the US. However, Seattle’s 10.25% sales tax, $2.19M estate tax threshold, and capital gains tax reduce the advantage for those with stock options or investment portfolios. Denver offers lower sales taxes, no estate tax, and better outdoor recreation access.
From the brief
PT38.4%−9.6 vs. headline
CY17.8%incl. 60-day rule
AE 0.0%substance required
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