The estate tax is imposed on the transfer of the taxable estate of every deceased domiciliary, nondomiciliary, and alien in Colorado. If a federal estate tax return is required, a Colorado estate tax return is required, whether or not tax is due. The estate's total tax bill remains the same but part of the money, equal to the federal estate tax credit, goes to Colorado. Colorado also taxes the transfer of the gross estate of a nondomiciliary who has property within the state. The amount of the tax is determined by multiplying the federal credit by a fraction, the numerator of which is the property value located in Colorado that is included in the gross estate and the denominator is the value of the gross estate.
Taxes are due on or before the date the federal return is required to be filed.
Any person making an estimated federal estate tax payment shall make an estimated Colorado estate tax payment, not later than the date the application for federal extension of time for payment is filed. The tax had graduated rates that varied in amount for different classes of beneficiaries. Those beneficiaries having the closest relationship to the decedent were subject to lower tax rates than those with a more distant relationship. The 1927 tax rates were not increased until 1967 and were increased again in 1977. The present federal estate tax law taxes all beneficiaries at the same rate and does not consider a beneficiary's relationship to the deceased with the exception of the allowance of the marital deduction for a surviving spouse.