TAX INCENTIVES

Provided by the Colorado Office of Economic Development and International Trade and Montrose County

 

Montrose County Business Tax Credits 

Montrose County is able to negotiate tax credits for new and expanding businesses. These credits are negotiated on a case by case basis and apply to business personal property associated with the new or expanding business. A minimum investment of $250,000 is required for eligibility for these credits. For additional information on these credits, please contact Montrose County Government Affairs at (970)252-4549.

 

Job Growth Tax Incentive

The Job Growth Incentive Tax Credit provides a state income tax credit to businesses undertaking job creation projects that would not occur in Colorado without this program. 

 

Requirements

Businesses need to create at least 20 new jobs in Colorado, with an average yearly wage of at least 100% of the county average wage rate based on where the business is located. A business located in an Enhanced Rural Enterprise Zone has to create at least five new jobs in Colorado, with an average yearly wage of at least 100% of the county average wage. All new jobs must be maintained for at least one year after the positions are hired to qualify.

 

Process

Businesses interested in requesting a Job Growth Incentive Tax Credit commitment should contact us. For more information, see the following:

 

Job Growth Incentive Tax Credit Fact Sheet.

 

Statute (39-22-531 C.R.S)

HB 14-1014

 

Biotechnology Sales & Tax 

Colorado promotes its biotechnology industries by providing them with a taxpayer-friendly means to recover the sales and use previously-paid tax expenses on equipment and supplies used for research and development. Qualified taxpayers may seek a refund every year for all Colorado sales and use taxes they paid on purchases of tangible personal property used directly in research and development of biotechnology. This includes property such as microscopes, chemical reagents and software.

 

Taxpayers have only a short period to claim the biotechnology refund – you must submit a refund claim between January 1st and April 1st within the following calendar year.

 

Requirements for the Refund

The refund applies to Colorado’s 2.9 percent state sales or use taxes.

 

  1. The tax was paid within the eligible calendar year. The refund for biotechnology is not an exclusion or exemption from sales or use taxes. To take advantage of the refund, the taxpayer first must pay any sales or use taxes owed, and then seek a refund.

  2. The tax was paid by a qualified taxpayer.

  3. The tax was paid in the calendar year immediately preceding the brief mandated filing period (that is, the period eligible for the refund).

  4. The tax was paid for the sale, storage, use, or consumption of (a) tangible personal property (b) for use in Colorado; and

  5. The tangible property was directly and predominately used in (a) research and development (as defined in the federal tax code) (b) of biotechnology.

 

Qualified taxpayers must submit a refund application to the Colorado Department of Revenue.

 

To consult the Sales and Use Tax Refund for Biotechnology statute, visit the state statutes and search for 39-26-401 and 402.

 

Manufacturing Sales & Use Tax Exemption 

Colorado encourages manufacturers to locate their manufacturing operations in Colorado recognizing their importance in Colorado's economy. Colorado provides an exemption from state sales and use tax on purchases of manufacturing machinery, machine tools and parts.

 

Requirements for the Exemption

The machinery must be:

 

  • Used in Colorado

  • Used directly and predominantly to manufacture tangible personal property for sale or profit.

  • Included on a purchase order or invoice totaling more than $500.

  • Capitalized.

  • Be of a nature that would have qualified for the federal investment tax credit under the definition of section 38 property found in the Internal Revenue Code of 1954, as amended. This includes tangible personal property with a useful life of one year or more and limits qualifying purchases of used equipment to a maximum of $150,000 annually.

 

For additional details related to the production of electricity see the Department of Revenue FYI Publication for this exemption, FYI Sales 10.

 

Contact the Department of Revenue with questions at 303-238-7378 or visit www.colorado.gov/revenue.

 

Aviation Development Zone Tax Credit

A business or any portion of a business that is involved in the maintenance and repair, completion or modification of aircraft located within the boundaries of an airport designated as an Aviation Development Zone may qualify for a state income tax credit of $1,200 per new full-time employee.

 

The facility must employ ten or more employees and the credit is based on the increase in the average number of aviation zone employees for the tax year over the previous base number. The credit is available to all types of business entities.

 

For more information, contact us.

 

Advanced Industry Investment Tax Credit 

 

Purpose

 

The purpose of the Colorado Advanced Industry Investment Tax Credit is to help more Colorado advanced industry companies receive more capital from Colorado investors. The legislation that created this program (HB 14-1012) defines the seven advanced industries as:

 

  1. Advanced Manufacturing

  2. Aerospace

  3. Bioscience

  4. Electronics

  5. Energy/Natural Resources/Cleantech

  6. Infrastructure Engineering

  7. Technology & Information

 

Requirements and Eligibility

 

In order to qualify for the Advanced Industry Investment Tax Credit, the investor, the investee (the company being invested in), and the investment all must meet certain criteria.

 

The investor must be an individual, S corporation, partnership, LLC or other business entity. C corporations are not eligible to be investors in this program.

 

The investee must:

 

  • Be a corporation, partnership, LLC or other business entity. Individuals are not qualified.

  • Be in one of the advanced industries listed above.

  • Have its headquarters located in Colorado or have at least 50% of its employees in Colorado.

  • Have received less than $10 million from third-party investors since the business was formed.

  • Have annual revenues of less than $5 million.

  • Have been actively operating and generating revenue for less than 5 years.

  • The investment must meet the following criteria:

  • The investment must have been received by the investee on or after July 1, 2014.

  • The investment must be an equity security of at least $10,000.

  • The investor must hold no more than 30% of the voting power before the investment.

  • The investor must hold less than 50% of the voting power after the investment.

 

Application Process

All applications for this credit must be submitted online via the OEDIT website. Manual applications will not be accepted. Applications must be submitted by the investor, not the recipient business. Please click here to learn more about the application process and apply.