Pikes Peak Enterprise Zone

Enterprise Zone (EZ) State Income Tax Credits:

The Colorado Enterprise Zone (EZ) Program was created by the Colorado Legislature (C.R.S. Title 39, Article 30) to promote a business-friendly environment in economically distressed areas by offering state income tax credits that incentivize businesses to locate and develop in – and nonprofit organizations to assist with the needs of – these communities.

Areas with high unemployment rates (25% above state average), low per capita income (25% below state average), and/or slower population growth (less than 25% of the state average in rural areas) may be approved for EZ designation by the Colorado Economic Development Commission. Only taxpayers engaged in business that is legal under both state and federal law are eligible to claim EZ income tax credits. The following tax credits can be earned by businesses located within the geographic boundaries of the Pikes Peak Enterprise Zone:

Investment Tax Credit:

Businesses making investments in qualified business personal property and equipment used exclusively within the Enterprise Zone for at least one year may earn a tax credit equal to 3% of the amount of the qualified investment. Pre-certification is required, and excess credits may be carried forward for up to fourteen (14) years.

Commercial Vehicle Investment Tax Credit:

A taxpayer can earn a state income tax credit for 1.5% of the price of commercial trucks, truck tractors, tractors, semi-trailers, and associated parts registered in Colorado and used in an Enterprise Zone. Pre-certification is required, and a separate two-part application must be completed with the Colorado Office of Economic Development & International Trade (OEDIT): Commercial Vehicle Investment Tax Credit Application

Job Training Tax Credit:

Businesses can earn a state income tax credit for 12% of eligible job training costs for employees working within the Enterprise Zone. Pre-certification is required, and excess credits may be carried forward for up to fourteen (14) years.

New Employee Tax Credit:

Businesses hiring new employees in an Enterprise Zone may earn a state income tax credit of $1,100 for each net new employee hired by the business. Businesses can earn additional tax credits if the business is an agricultural processor. Pre-certification is required, and excess credits may be carried forward for up to five (5) years.

Employer-Sponsored Health Insurance Tax Credit:

For the first two full tax years that a business is in an Enterprise Zone, the business can earn $1,000 per employee insured under a qualified health plan for which the employer pays at least 50% of the cost. Pre-certification is required, and excess credits may be carried forward for up to five (5) years.

Research and Development Tax Credit:

Businesses can earn a 3% tax credit for an increase in annual research and development expenses compared to what they spent the prior two years. Pre-certification is required, and there is no limit on the number of years excess credits may be carried forward.

Vacant Building Rehabilitation Tax Credit:

If a business rehabilitates a commercial building that is at least 20 years old and has been vacant for at least two years, the business can earn a state income tax credit for 25% of rehabilitation costs (up to $50,000 in credits on $200,000 or more on costs). Qualified expenditures include exterior, structural, mechanical, and electrical improvements. Pre-certification is required, and excess credits may be carried forward for up to five (5) years.

Contribution Tax Credit:

Enterprise Zone (EZ) Contribution Projects encourage community participation and public-private partnerships to revitalize EZs by supporting local economic improvements, resulting in job creation/retention and business expansion. Colorado taxpayers may earn a 25% state income tax credit by contributing to targeted efforts. Excess credits may be carried forward five (5) years. Learn more.

Sales and Use Tax Exemption:

Purchases of machinery and machine tools, parts, and materials used for manufacturing are exempt from the 2.9% State and 1.23% County sales and use tax.

For businesses located within the Enterprise Zone, the statewide sales and use tax exemption for purchases of manufacturing equipment is expanded to include non-capitalized equipment, parts, and tools to repair machinery. Also, machinery and machine tools used directly in the mining process qualify for the tax exemption. To claim this tax exemption, complete form DR 1191 or DR 1192 through the Colorado Department of Revenue.

Please refer to Colorado Department of Revenue’s Enterprise Zone Income Tax Credit Guide for additional tax credit information and complete eligibility requirements.

Enterprise Zone (EZ) Annual Pre-Certification and Certification:

EZ Pre-Certification:

Enterprise Zone (EZ) Pre-Certification Application Tutorial Video (7 minutes)

Legislative changes to the Enterprise Zone Program in 2012 now require that online Pre-certification applications be completed annually. EZ Pre-certification is quick and simple, and will ensure that your business can earn and claim these valuable tax credits.

EZ Certification:

Enterprise Zone (EZ) Certification Application Tutorial Video (10 minutes)

Certification applications are to be completed following the conclusion of the tax year, prior to submitting your tax return to Colorado Department of Revenue. In order to certify for EZ tax credits, you must have an approved Pre‐Certification.

Please visit Colorado’s Office of Economic Development and International Trade’s Enterprise Zone page and click on the “Apply for a tax credit” button to begin the Certification process. The local EZ Administrator will review and approve your Certification application, and an EZ Certification Tax Certificate will be emailed to you by the State.

Pikes Peak Enterprise Zone (EZ) Maps:

Detailed maps of the Pikes Peak Enterprise Zone geographic boundaries in El Paso County and Teller County can be found below. To determine whether your business is located in the Enterprise Zone boundaries, please utilize one of the following EZ mapping tools and enter the business address:

• Colorado Office of Economic Development & International Trade’s Interactive EZ Map
• El Paso County Economic Development’s Pikes Peak EZ Interactive EZ Map (El Paso County locations only)

Pikes Peak Enterprise Zone (EZ) Economic Development Goals & Reports:

Pikes Peak EZ 2022 Economic Development Goals:

• Support business opportunities – and increase the number of out-of-area visitors to EZ contribution projects – that promote the region’s heritage, unique cultures, scenic beauty, wildlife, arts, sporting activities, and other tourism opportunities.
• Support and encourage increased employment opportunities by partnering with economic development-focused agencies and businesses in marketing, recruitment, and training efforts, resulting in new or increased job opportunities within the EZ.
• In partnership with community stakeholders, support the revitalization of existing business districts through rehabilitation and business expansion.
• Support Workforce Housing Capital Campaigns, promoting a variety of housing and job opportunities in the region, resulting in an increase of successful housing outcomes and job placements.

Pikes Peak EZ Reports:

2022 Pikes Peak Enterprise Zone Annual Report

2022 Business Incentives & Community Development Initiatives Accomplishments Infographic

2021 Pikes Peak Enterprise Zone Annual Report

2021 Pikes Peak Enterprise Zone & Business Incentives Accomplishments Infographic

Enterprise Zone Contribution Project Tax Credit:

The goal of Enterprise Zone Contribution Projects is to create or preserve an environment that will help attract, expand, and retain employers in the Enterprise Zone (EZ). To encourage Colorado taxpayers to make contributions to nonprofits that make improvements to the Pikes Peak Enterprise Zone, a State Income Tax Credit equal to 25% of monetary contributions is available to donors who make contributions to approved EZ Contribution Projects.