Proposition 136 (Initiative 232): a 4.4 percent cap on the state income tax rate

Proposition 136 sets a 4.4 percent maximum income tax rate

Proposition 136 would add a section to the Colorado Revised Statutes headed "Maximum Tax Rate". One sentence carries the whole of it: "STARTING JANUARY 1, 2027, NEITHER THE INDIVIDUAL INCOME TAX RATE NOR THE CORPORATE INCOME TAX RATE MAY EXCEED 4.4% OF A TAXPAYER’S FEDERAL TAXABLE INCOME." A second section sets the effective date, applying the measure "to the tax year beginning January 1, 2027 and all future tax years thereafter". The section states a maximum, so a rate below 4.4 percent would not conflict with it. A no vote leaves current law unchanged.

The designated representatives

Suzanne Taheri and Michael Fields are the designated representatives for Initiative 232, named in the February 18, 2026 review and comment memorandum. The same memorandum covers Initiative 233, which would put the 4.4 percent limit in the state constitution and was submitted by the same representatives.

The fiscal impact statement says the measure has no fiscal impact

The April 7, 2026 fiscal note estimates no change in state or local revenue or spending because the proposed cap matches the current 4.40% rate. Its table lists no change in state revenue, expenditures, transfers, TABOR refunds or staffing for fiscal years 2025–26 and 2026–27.

The earlier fiscal summary, dated March 3, 2026, reaches the same finding and adds one sentence about later years: "The measure may prevent future increases in state revenue." Neither document estimates how much revenue that would be.

A cap in state statute, and the reviewers' questions about it

Colorado already requires voter approval to raise the statutory income tax rate. Legislative reviewers asked how adding a statutory cap of 4.4% would change that arrangement. At the February 20, 2026 review and comment hearing, a designated representative answered, "we don't have a cap right now," and that a cap in statute could be changed by a later ballot measure, while one in the constitution would need a constitutional change.

The measure caps a rate, and the amount the rate applies to is set elsewhere. The memorandum notes that "Section 39-22-104 (1.7)(c), C.R.S., specifies that federal taxable income is the basis for computing the state income tax." The reviewers asked what the measure would do if the General Assembly "changes statute to use a different basis for computing the state income tax than federal taxable income", and what it would do if the federal Internal Revenue Code changed the definition of taxable income. Proposition 136 applies its maximum to "A TAXPAYER’S FEDERAL TAXABLE INCOME", and the memorandum's question is what happens to that base if the state or the federal definition of taxable income changes. Asked at the hearing about the legislature using a different basis to calculate income tax, a designated representative said a change lowering what people pay "would be fine," but one raising tax liability would have to go to voters. They added that they thought assessing such a change was "a TABOR interpretation issue" and did not know whether the initiative could resolve it. Asked at the hearing about a change in the federal definition of taxable income, a designated representative said they thought Colorado taxable income "would go up accordingly" if the definition broadened and would go down if it narrowed, as now.

The reviewers also asked what happens when measures on the same ballot set different income tax rates, ending with "How would a conflict be resolved?" At the hearing, a designated representative said they thought a conflict would be resolved in favor of the measure with more votes. They believed a tie between a constitutional and a statutory measure would go to the constitutional one, and said a rate below 4.4% would not conflict with the cap. For a tie between two statutory measures, the representative said "Suzanne would have a lot of work to do." The discussion then included tentative suggestions of drawing lots or flipping a coin. The Kim Monson Newsroom's July 28, 2026 article on the two measures reports that section 1-40-123 of the Colorado Revised Statutes governs which prevails when measures on the same ballot conflict; the memorandum itself does not cite that section.

Protect Colorado’s Future Coalition also supports Amendment 87 (Initiative 195). Vote Common Sense’s registration covers nine measures, and Brighter Colorado supports six and opposes two. None of these committee totals can be attributed to Proposition 136 alone.

A July 28, 2026 Kim Monson Newsroom article examined which of Initiative 195 and Proposition 136 would control if both passed, and that day's Kim Monson Show noted that a conflict would need resolving. Initiative 195 would replace the single rate with graduated rates.