Pikes Peak Enterprise Zone

El Paso County is dedicated to helping local businesses and organizations thrive!  Through the Pikes Peak Enterprise Zone, we are working to improve the local business climate; facilitate growth in the quantity and quality of employment opportunities; respond effectively to local business expansion opportunities and constraints; develop and sustain increased rates of business investment and job creation; foster strong partnerships with citizens, businesses and non-profits and provide numerous additional opportunities through tax savings.

What is the Enterprise Zone?

The Enterprise Zone Program is a state incentive which encourages new and established businesses to locate and expand in economically distressed areas of the state.  Businesses in the Enterprise Zone may save thousands of dollars on their Colorado income tax bill each year for any or all of the following:

  • Making capital investments
  • Hiring new employees
  • Providing training for employees
  • Rehabilitating old buildings
  • Conducting Research and Development

What are the benefits for businesses located in the Enterprise Zone?

The Pikes Peak Enterprise Zone can turn the money you have been paying in taxes into working capital.  That is thousands of dollars a business can save each year!  It is about time you let the money you have been spending work for you!

Who is eligible for Enterprise Zone tax credits?

Any business located in the Enterprise Zone, engaged in business that is legal under both state and federal law, is eligible to receive these tax credits!

Enterprise Zone Annual Pre-Certification and Certification

Legislative changes to the Enterprise Zone Program became effective in 2012 that now require pre-certification be completed annually for activities that will earn business tax credits. Additionally, pre-certification must be completed prior to beginning an activity to earn any of the business tax credits. Electronic pre-certification is easy and will ensure that your business can utilize the tax credits.

Per-Certification:

To pre-certify, please visit Colorado’s Office of Economic Development and International Trade Enterprise Zone page and simply click on the “Apply” button. An e-mail acknowledging receipt of the pre-certification will be sent back to the tax preparer listed, and an additional e-mail will be sent either approving or denying that pre-certification. Please retain that approval e-mail in your records as it will be needed to receive certification for credits. Enter an address in the Enterprise Zone mapping tool to learn if your business is in an Enterprise Zone. Pre-certification can be completed up to three months in advance of the business’ tax year start date and is approved or denied by the EZ Administrator. Pre-certify each business location separately as credits are only available for business activity in an Enterprise Zone.

Certification:

A business having pre-certified, and then conducted activities that are eligible for EZ credits, must then complete a certification application and receive approval from the EZ Administrator. Certification documents must be submitted with your Colorado income tax filing. The Certification document from the online application system takes the place of Department of Revenue forms DR0074, DR0076 and DR0077.

 

Credits and Exemptions for Businesses in the Enterprise Zone

Investment Tax Credit: Businesses making investments in equipment used exclusively within the Enterprise Zone for at least one year may claim a credit against their Colorado income taxes equal to 3% of the amount of the investment. This credit is the most widely used of all Enterprise Zone credits.

Job Training Tax Credit: Employers who carry out a qualified job training program for their Enterprise Zone employees may now claim an income tax credit of 12% of their eligible training investment. On the job training is not a qualified job training program.

New Employee Credit: Businesses hiring new employees in an Enterprise Zone may claim a state income tax credit of $1,100 for each net new employee. If the credit exceeds the taxpayer’s Colorado income tax liability, the balance may be carried forward up to five years.

Employer Sponsored Health Insurance Credit: Businesses may qualify for a credit of $1,000 for each employee who is insured under a health insurance plan or program provided by the employer. The employer must contribute 50% or more of the total cost of the plan. The business may only claim this credit for the first two years in the Enterprise Zone.

Research and Development Tax Credit: Businesses involved in private expenditures on research and development activities in the Enterprise Zone qualify for an income tax credit. This credit equals 3% of the amount of the increase in the taxpayer’s research and development expenditures within the Enterprise Zone for the current tax year above the average of research and development expenditures within the Enterprise Zone during the previous two tax years. The total amount of the credit must be divided equally over a four-year period. Qualified research must satisfy three criteria: it must be technological in nature, it must be useful in the development of a new or improved product or component of the business, and it must utilize the process of experimentation.

Vacant Building Rehabilitation Credit: There is a credit of 25% of rehabilitation costs, up to a maximum credit of $50,000 per building, to rehabilitate commercial buildings that are at least 20 years old and which have been completely vacant for at least two years. Qualified expenditures includes exterior, structural, mechanical, and electrical improvements.

Contribution 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. Learn more.

Commercial Vehicle Investment Tax Credit: Businesses that invest in commercial trucks, truck tractors, tractors, or semitrailers, and associated parts may earn the taxpayer a 1.5% credit if registered in Colorado and based and used predominantly in an Enterprise Zone for the first twelve months following purchase. Commercial Vehicle Investment Tax Credit Pre-Certification Application

Sales and Use Tax Exemption: Purchases of manufacturing machinery and machine tools, parts, and materials used in machinery and machine tools used in the Enterprise Zone are exempt from the 2.9% State and 1.23% County sales and use tax.

Manufacturers within the Enterprise Zone may claim this exemption whether the purchases are capitalized or expensed for accounting purposes. Also, machinery and machine tools used directly in the mining process qualify for the tax exemption. At the time of purchase, a “Sales Tax Exemption On Purchases Of Machinery And Machine Tools” Form DR 1191 must be filed with the vendor from whom the item is purchased and with the Colorado Department of Revenue.

Pikes Peak Enterprise Zone Maps

Detailed maps of the Pikes Peak Enterprise Zone can be found below. To confirm whether your business is in the Zone, please visit the State’s website and enter the business address in the Enterprise Zone mapping tool.

Contact us:

DeAnne McCann
Economic Development Executive Director
9 E. Vermijo Ave.
Colorado Springs, CO 80903
Phone: 719-520-6481
Fax: 719-520-6288
deannemccann@elpasoco.com

Sara Lobato
Economic Development Senior Analyst
9 E. Vermijo Ave.
Colorado Springs, CO 80903
Phone: 719-520-6480
Fax: 719-520-6288
saralobato@elpasoco.com