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Business Tax Credits

Incentives are available to businesses located in designated Enterprise Zones, providing tax credits for certain types of business activities. These credits are for Colorado Income Taxes only.


Business Tax Credits

Businesses wanting to claim any of the Colorado Enterprise Zone (EZ) income tax credits (excluding the Contribution Project credit for which pre-certification is not required), must annually pre-certify with their local EZ Administrator to be eligible to claim EZ tax credits. Pre-certification can be completed up to 3 months in advance of the business’ tax year start date.


Pre-certification

Pre-certification is approved by the Local EZ Administrator; a business with multiple locations in an EZ may include all locations within that EZ on a single pre-certification application. Businesses with multiple locations in various EZs must complete an application for each EZ

For more info on pre-certifying, click here.


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 local EZ Administrator. Certification documents must be submitted with your Colorado income tax filing. The Certification document from our on-line application system takes the place of DOR forms DR0074, DR0076, and DR0077.

For more info on certification, click here.


Available Credits

Below is a summary of available tax credits:

3% Investment Tax Credit

Businesses investing in equipment or improvements used exclusively in an enterprise zone may claim a credit of 3% of the amount of the investment.

$1,100 New Employee Credit

Businesses adding to their number of full time equivalent jobs may claim a tax credit against state income taxes of $1,100 for each such employee. Agricultural Processor qualify for an additional $500 per employee credit. See below for more details.

$2,000 Enhanced Rural areas New Job Tax Credit

in Enhanced Rural Zones (Delta, Hinsdale, Ouray, and Montrose counties)

$500 Agricultural Processor New Employee Tax Credit

An additional credit of $500 per new business facility employee may be claimed by businesses that add value to agricultural commodities through manufacturing or processing.

$1,000 Employer Sponsored Health Insurance Tax Credit

Businesses qualifying as a “new business facility” or as an “Expansion Facility” are allowed a $1,000 tax credit for two years for each employee who becomes insured under a qualifying employer-sponsored health insurance program.

25% Vacant Building Rehabilitation Tax Credit

Owners or tenants of commercial buildings which are at least 20 years old and have been vacant for at least 2 years may claim a credit of 25 percent of the cost of rehabilitating each building up to a maximum credit of $50,000.

12% Job Training Credit

Employers that carry out a qualified job training program for their employees may claim a tax credit of 12 percent of their eligible training costs.

3% R&D Tax Credit

Businesses that are planning to increase their private expenditures on research and experimental activities may qualify for a 3% tax credit.

Local Government Tax Incentives

Any city or county within an enterprise zone is authorized to negotiate with individual taxpayers who have qualifying new business or expansion facilities.

Manufacturing/Mining Sales and Use Tax Exemption

Purchases of manufacturing machinery, machine tools and machine parts are exempt from the 3 percent state sales and use tax statewide. Use Form DR1191 (can be completed on your computer) Note: Application for this tax credit is not included in the new online pre-certification/certification program.

Commercial Vehicle Investment Tax Credit (CVITC)

Purchases of qualifying commercial vehicles qualify for a 1.5% tax credit. Full instructions can be found here. Use the CVITC Pre-Application and Application Forms. Note: Pre-Application and Application for this tax credit is not included in the new online pre-certification and certification program.

For More Information

Businesses interested in obtaining these tax credits should first contact their accountant or tax preparer.

More information on Enterprise Zone Tax credits, “FYI” advice, fact sheets and examples can be found on the state EZ website here.

Please call us with your questions!

Michelle Haynes
(970) 765-3122
(970) 249-2436 X 202
ezadmin@region10.net