Business Tax Credits
Many business tax credits exist for businesses within the Enterprise Zone. During the 2010 legislative session, MAJOR changes to the credits were made. Starting January 1, 2012, businesses operating in an Enterprise Zone must obtain pre-certification each year from the local Enterprise Zone administrator prior to engaging in any activity for which they intend to earn a credit on. Information about this change and additional changes can be found here: EZ Leg Changes Factsheet
Download the State of Colorado Enterprise Zone PDF documents associated with each benefit listed here for complete details.
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3% Investment Tax Credit: Businesses making investments in equipment used exclusively in an Enterprise Zone which would have qualified for the pre-1986 federal investment tax credit may claim a credit against their Colorado income taxes. Excess credits may be carried back 3 ears and forward 12 years. (FYI Income 11)
$500 Job Tax Credit: Businesses hiring new employees in connection with a “new business facility” located in an Enterprise Zone may claim a tax credit against state income taxes. If a business expands and meets the criteria to qualify as a “new business facility”, they may claim the $500 Job Tax Credit. Excess credits may be carried forward 5 years. (FYI Income 10)
Double Job Tax Credit for Agricultural Processing: An additional $500 credit per new business facility employee may be claimed by businesses that add value to agricultural commodities through manufacturing or processing. (FYI Income 10)
$200 Job Tax Credit for Employer Sponsored Health Insurance: A taxpayer with a new business facility is allowed a two-year $200 tax credit for each new business facility employee who is insured under a qualifying employer-sponsored health insurance program (employer must pay at least 50% of the premium). (FYI Income 10)
10% Job Training Credit: Beginning with 1997 tax years, employers who carry out a qualified job training program for their Enterprise Zone employees may claim a Colorado income tax credit of 10% of their eligible training costs. (FYI Income 31)
Credit to Rehabilitate Vacant Buildings: Owners or tenants of commercial buildings in an Enterprise Zone which are at least 20 years old and which have been vacant for at least 2 years may claim a credit of 25% of the cost of rehabilitating each building. The credit is limited to $50,000. (FYI Income 24)
Research and Development Tax Credit: Taxpayers who make private expenditures on research and experimental activities (as defined in federal tax law) conducted in an Enterprise Zone qualify for an income tax credit of 3% of the R&D expenditures. (FYI Income 22)
Exemption from State Sales and Use Tax for Manufacturing and Mining Equipment: Eligible purchases used in an Enterprise Zone are exempt whether the purchases are capitalized or expensed for accounting purposes. (FYI Sales 69)
Examples of Tax Credits
If you purchase new equipment for your business: a computer, a point of sale system, kitchen equipment, manufacturing machinery, an agricultural irrigation system or other tangible personal property that is used to generate revenue, you may be eligible for a 3% Investment Tax Credit.
If you add additional jobs to your workforce, you may be eligible for a $500 Job Tax Credit per additional employee.
If you are an agricultural processing business and you add additional employees to your staff, you may be eligible for an extra $500 Job Tax Credit making a total of $1,000 per additional employee
If you provide additional training for your employees (other than on-the-job training), you may be eligible for a 10% Job Training Credit.
If you provide employer-sponsored health insurance for your employees, you may be eligible for a $200 per employee (for two years) Health Insurance Tax Credit.
If you rehabilitate a 20 year old vacant building, you may be eligible for 25% of the building renovation costs.
How Do You Apply for Enterprise Zone Tax Credits?
Once you have established that a business is located in the Mesa County Enterprise Zone, you should follow these steps: