The Enterprise Zone Program, established by Colorado’s Urban and Rural Enterprise Zone Act of 1986, was formulated to provide state tax incentives for private enterprises to expand and for new businesses to locate in economically distressed areas of Colorado. The Colorado Economic Development Commission (EDC) designates these areas into a maximum of 18 Enterprise Zones, qualifying businesses in these zones for up to nine tax credits.
This new credit allows for Colorado taxpayers to claim a ten percent credit of the total year’s investments in qualified job training programs. All pre-certification credits earned on or after January 1st, 2012, by employees working within an enterprise zone, will qualify for this credit. Excess credits accrued can be carried forward for up to twelve years.
To qualify as a “qualified job training program,” a structured training or basic education program must be conducted to improve job skills of employees who are employed by the taxpayer.
The taxpayer’s “total investment” includes land, building, real property improvement, leasehold improvement, or space lease costs and the cost of any capital equipment purchased or leased by the taxpayer, and must be used entirely within an enterprise zone primarily for qualified job training program purposes. With the exclusion of employee training wages, any expenses utilized for a qualified job training program are considered as part of the taxpayer’s total investment.
Other available EZ credits available to taxpayers who own, are expanding or forming a new business include:
• Investment Tax Credit;
• New Business Facility Jobs Credit;
• Research and Development Tax Credit;
• Tax Credit for Private Contributions to Enterprise Zone Administrators;
• Tax Credit for Rehabilitation of Vacant Commercial Buildings;
• Quilified Job Training Program Investment Credit; and
• State Sales and Use Tax Exemption for Manufacturing and Mining Equipment.
Only a small number of qualified businesses are taking advantage of these credits. In addition, numerous city and county tax credits are available to businesses in Colorado enterprise zones. Colorado’s Enterprise Zone Program may be one of the most valuable and easiest programs overlooked as far as tax credits go. In a difficult economy, these credits can provide businesses with the opportunity to benefit an entire community.
For a more information on this topic please visit:
Colorado Department of Revenue’s Enterprise Zones web page.