Pikes Peak Enterprise Zone
El Paso County and Teller County are 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.
Pikes Peak EZ 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 and Homeless Housing and Employment Services Operations, promoting a variety of housing and job opportunities in the region, resulting in an increase of successful housing outcomes and job placements.
EZ Tax Credits:
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:
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. Excess credits may be carried forward up to fourteen (14) years and pre-certification is required.
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. Excess credits may be carried forward for up to fourteen (14) years and pre-certification is required.
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. Excess credits may be carried forward for up to five (5) years and pre-certification is required.
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. Excess credits may be carried forward for up to five (5) years and pre-certification is required.
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. There is no limit on the number of years excess credits may be carried forward; pre-certification is required.
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. Excess credits may be carried forward five (5) years and pre-certification is required.
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. Excess credits may be carried forward five (5) years. 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.