The economy of Colorado, the eight largest state in the United States based on area, is remarkable for its high-technology industries and scientific research. The state has various industries including transportation equipment, food processing, chemical products, machinery, metals extraction and tourism. It has also the biggest annual beer production among the other states.
During the mid-19th century, the economy broadened with the development of irrigated agriculture, while livestock raising gained prominence by the late 19th century. Early industries were based on the processing and extraction of agricultural products and minerals. By the second half of the 20th century, the service and industrial sectors saw significant growth. Currently, agricultural products in Colorado are wheat, corn, hay, dairy products and cattle.
According to the Bureau of Economic Analysis, gross state product in 2008 stood at $248.6 billion. Its economy was the 28th biggest in the US for the same year, and per capita personal income hit $34,561 in 2003, the eight highest in the country.
The federal government is a key economic force in Colorado. Several federal facilities are based in Colorado including the United States Air Force Academy, National Institute of Standards and Technology and US Geological Survey. The state is also home to four National Parks and a rich National Forest land.
Colorado is also home to several laboratories and factories. Telecommunication company Qwest originated in the state in 1879, Gates hoses and belts in 1911, and herbal teas from Celestial Seasonings in 1969.
Colorado boasts large hydrocarbon resources. The Energy Information Administration said the state hosts seven of the 100 biggest natural gas fields in the US, and two of the country’s biggest oil fields.
Irrespective of the income level, the state’s income tax stands at 4.63 percent. Unlike the other US states, taxes in Colorado are based on income after federal itemized/standard deductions and federal exemptions, otherwise known as taxable income. Its state sales tax stands at 2.9 percent on retail sales. Once state revenues surpass state constitutional caps, full-year residents can get a sales tax refund on their state income tax return. Personal business property and real estate are also taxable in the state.
The federal government awards farmers and ranchers with an annual average payments totaling $36 million, which include wheat subsidies at an average of $79 million per year.
Denver is a major financial center in Colorado. It is rapidly becoming a strategic hub for federal, financial, commercial, educational, high-tech, cultural, storage, distribution and tourist services to the Rocky Mountain States.
As of September 2010, the unemployment rate in Colorado hit 8.2 percent.