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Contribution Tax Credits

The purpose of the Enterprise Zone (EZ) contribution tax credit program is to encourage taxpayers to assist the local EZ by donating to approved governmental and non-profit partners (Contribution Projects) that encourage economic development in the Enterprise Zone.

NOTE: Applications for tax credits for contributions to EZ Contribution Projects are not included in the new online pre-certification/certification process.  The procedure remains the same as in past years.

Donors to EZ Contribution Projects can receive significant income tax benefits. To see an example, click here.

The following is a list of Region 10’s current Enterprise Zone as of February 2016: 2016 Contribution Projects

Before applying, be certain to read up on the EZ Contribution Tax Credit Policies.


Tax Credits

  • A taxpayer who makes a monetary contribution to an EZ Project is entitled to a Colorado Income Tax credit of 25% of the value of the contribution up to a maximum credit of $100,000.
  • In-kind contributions are eligible for a 12.5% in-kind credit. In-kind contributions (e.g.) employee labor, materials, furniture, computer equipment or stock.
  • A certification form (DR0075) must be completed by the project leader and then signed by the EZ Administrator. A copy of the donation check or in-kind valuation must accompany the form. The EZ Administrator will work with the project leader to complete the processing of the forms. The finalized, signed DR0075 must be attached to the individual’s Colorado Income Tax in order to receive the tax credit.

Proposal Process

Please contact the EZ Coordinator if you are interested in applying for your project at ezadmin@region10.net.  She will assist you with the application and do the submission through Region 10.

Projects must be recertified each year in order to continue to receive contributions.

Eligible Projects

All proposed projects are reviewed and approved by the Colorado Economic Development Commission.

Contribution Project Categories include:

Economic Development

  • Business assistance. Examples include: business training and counseling, incubators, finance funds, and feasibility studies.
  • Economic Development Organizations. Project status may be given to a public/private non-profit economic development organization.
  • Job training programs.These projects focus on training a workforce for a critical industry in the EZ. Higher-education programs do not qualify within this category unless the institution has developed a targeted program in conjunction with an area business to address that business’ workforce needs.
  • Infrastructure projects. Examples of infrastructure include water, sewer, transportation, telecommunications, and streetscapes.
    • Infrastructure must be publicly owned or turned over to a public entity upon completion of the project. It cannot be owned by a private business (e.x. Qwest, Comcast, etc.).
    • The proposal must demonstrate that no more than 50% of donations come from entities which have the potential for direct benefit from the project. For example, a real-estate developer may put in water systems and roads within and to their development, and donate this infrastructure to a city. It is a general requirement for many cities that the developer incur these costs; however, a city may incentivize a developer with the EZ Contribution Tax credit if at least 50% of the infrastructure cost is covered by donors unassociated with the development or who will not receive a direct benefit.
    • These proposals must have support of relevant public entities.

Community Development Projects

Projects under the broadly defined “Community Development” statutory project type must

  • Contribute directly to job creation and retention and/or business expansion in the EZ. Neither jobs associated with the sponsoring non-profit organization, nor those for construction of a Project facility are considered job creation. The Project must impact the broader EZ community.
  • These projects must also implement the adopted economic development plan for the EZ as described in the EZ Administrator’s annual report.

Specific sub-categories allowed under the Community Development category:

  • Community Facilities – some facilities are essential to liveable and resilient communities; these keep people living in the area and those residents support service and retail businesses. Capital campaigns of a limited term to develop or refurbish community assets may be considered. Funding drives that support operations of key community facilities are also eligible to apply.
  • Health Care Facilities. Facilities determined to be essential to the economic viability of an EZ community may be considered.
  • Visitor Event/Attraction. These projects attract people to the enterprise zone and result in spending at other area businesses. These may be tourist attractions, museums and events.
  • Higher Education. A project to support a capital campaign for building and/or equipment with a clear economic development link may be considered. Certain job training projects (see the Economic Development category) may be eligible. Academic, scholarship and endowment programs are not allowed.

Homeless Assistance

  • Organizations that provide homeless services including job training, referrals, and housing in an Enterprise Zone are eligible. A homeless shelter must also provide non-housing assistance including job readiness or training, and job referrals or partnering with a local workforce center.

Specific categories NOT eligible for Contribution Project status:

  • Child Care – Contributions to promote child care may be eligible for a separate statewide credit. See Department of Revenue FYI Income 35.
  • K-12 and Higher-Ed programs and operations. Education is generally funded by the State via the Long Bill.
  • Humane Societies and Animal Shelters – The tie to economic development is too indirect.

 

 


For More Information

Michelle Haynes
(970) 249-2436 x202
ezadmin@region10.net

Colorado Office of Economic Development
(303) 892-3840
www.state.co.us/oed/ez