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 new 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: 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 net new 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.
