Purpose
The Colorado Enterprise Zone (EZ) Program, was created by the state legislature (C.R.S. Title 39, Article 30), to promote a business friendly environment in economically distressed areas by offering state income tax credits to businesses to locate and grow in these communities.
Qualifications
Taxpayers making business-related investments within an Enterprise Zones can earn Colorado income tax credits by completing specific economic development activities. Only those engaged in legal business activities, as defined by both state and federal law, are eligible to claim EZ tax credits.
IMPORTANT
Each income tax year, a business in an EZ must apply for pre-certification before starting any activity to qualify for business tax credits. At the end of the year, the business must certify the activities completed.
INCOME TAX CREDITS & ADDITIONAL INCENTIVES
12% of eligible training costs
Businesses can earn a state income tax credit for 12% of eligible job-training costs for employees working within the enterprise zone. This tax credit helps develop a skilled workforce in distressed communities. Even if the business leaves the community, the skilled workforce typically remains an asset to the local economy.
$1,100 or more per net new employee
Businesses can earn a state income tax credit of $1,100 per net new employee. Businesses can earn more tax credits if the business is an agricultural processor or is in an enhanced rural enterprise zone. This tax credit encourages businesses to hire and expand employment opportunities, thus reducing unemployment rates. State and local governments benefit from income and sales tax revenue generated from these employees.
12% of eligible training costs
Businesses can earn a state income tax credit for 12% of eligible job-training costs for employees working within the enterprise zone. This tax credit helps develop a skilled workforce in distressed communities. Even if the business leaves the community, the skilled workforce typically remains an asset to the local economy.
3% of an increase in research and development expenses
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. Investment in research and experimentation supports an innovative economy. A research and development focused business that sells products, services, or intellectual property will bring outside dollars to the local economy.
25% of rehabilitation costs (up to $50,000 in credits on $200,000 or more in costs)
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). This tax credit encourages the revitalization of dilapidated buildings and blighted areas, bringing new businesses and employees to the community. State and local governments gain tax revenue from new economic activity.
1.5% of purchase price
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. This tax credit encourages businesses to register new commercial vehicles in Colorado and pay Colorado licensing and registration fees.
3% of business personal property investment
Businesses can earn a state income tax credit for 3% of an investment in business personal property. New business personal property increases a company’s capacity. The taxes a business pays on these purchases far exceed all tax credits under the enterprise zone program.
Sales and use tax exemption
The statewide sales and use tax exemption for purchases of manufacturing equipment is expanded to include non-capitalized equipment and parts if the business is located within a zone. The enterprise zone statutes also expand manufacturing to include mining.
12.5% of an in-kind donation and 25% of a cash donation
The Enterprise Zone Contribution Tax Credit provides a tax credit to Colorado taxpayers that contribute to targeted enterprise zone projects. When taxpayers make a certified contribution, they can claim, 25% of a cash donation as a state income tax credit and 12.5% of an in-kind donation as a state income tax credit. The amount of this tax credit is capped at $100,000 per taxpayer per tax year. If you cannot use all of your credits in a given tax year, you can carry forward the balance up to five years.
Application Process
Application Process
- Verify Eligibility
Make sure your business is located in an enterprise zone by using the OEDIT EZ Interactive Map
Click Here to view Map
See what items are eligible - Pre-Certify
Annual Pre-Certification is required for each business location prior to any eligible investments or activities - Certify
Certification is completed at the end of the tax year to earn tax credits for activities performed during the Pre-Certification period - Submit
Tax credits are claimed by filing the approved EZ Certification with the business’ state income tax return
Apply Now (OEDIT application Portal)
For additional information or questions, contact the EZ program administrator:
Will Slate, Economic Development Manager
City of Englewood
(303) 762-2599
[email protected]
Interactive Map
To use this map, type in your address in the top right-hand corner. You may need to scroll out to identify whether or not you are located within an enterprise zone. If your location is highlighted in a color, you are located in an enterprise zone. If your location is in a checkered colored area, it is located in an enhanced rural enterprise zone.
