Credit/Exemptions for Any Zone Business
Investment Tax Credit: Businesses making investments in equipment used exclusively within the Enterprise Zone for at least one year may claim a credit against their Colorado income taxes equal to 3% of the amount of the investment. This credit is the most widely used of all Enterprise Zone credits.
Job Training Tax Credit: Employers who carry out a qualified job training program for their Enterprise Zone employees may now claim an income tax credit of 12% of their eligible training investment. On the job training is not a qualified job training program.
New Employee Credit: Businesses hiring new employees in an Enterprise Zone may claim a state income tax credit of $1,100 for each new job created. If tne credit exceeds the taxpayer's Colorado income tax liability, the balance may be carried forward up to five years.
Employer Sponsored Health Insurance Credit: Businesses may qualify for a credit of $1,000 for each employee who is insured under a health insurance plan or program provided by the employer. The employer must contribute 50% or more of the total cost of the plan. The business may only claim this credit for the first two years in the Enterprise Zone.
Research & Development Tax Credit: Businesses involved in private expenditures on research and development activities in the Enterprise Zone qualify for an income tax credit. This credit equals 3% of the amount of the increase in the taxpayer's R&D expenditures within the Enterprise Zone for the current tax year above the average of R&D expenditures within the Enterprise Zone during the previous two tax years. The total amount of the credit must be divided equally over a four-year period. Qualified research must satisfy three criteria: it must be technological in nature, it must be useful in the development of a new or improved product or component of the business, and it must utilize the process of experimentation.
Vacant Building Rehabilitation Credit: There is a credit of 25% of rehabilitation costs up to a maximum credit of $50,000 to rehabilitate buildings that are at least 20 years old and which have been completely vacant for at least two years. Qualified expenditures includes exterior, structural, mechanical, and electrical improvements.
Sales and Use Tax Exemption: Purchases of manufacturing machinery and machine tools, parts, and materials used in machinery and machine tools used in the Enterprise Zone are exempt from the 2.9% State and 1.23% County sales and use tax.
Manufacturers within the Enterprise Zone may claim this exemption whether the purchases are capitalized or expensed for accounting purposes. Also, machinery and machine tools used directly in the mining process qualify for the tax exemption. At the time of purchase, a "Purchases of Machinery and Machine Tools" form DR 1191 must be filed with the vendor from whom the item is purchased and with the Colorado Department of Revenue.