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Tax Credits and Forms
Adams County Enterprise Zone Adams County Economic Development is the State appointed administrator of the Enterprise Zone territory in Adams County and some portions of Arapahoe County. The Enterprise Zone Program encourages job creation and capital investment in economically distressed areas by providing tax credits to businesses and Enterprise Zone projects to promote and encourage economic development. In addition Colorado Revised Statue 39-30-107.5 allows city and county governments increased flexibility for local property tax incentives.
Please use the links provided in the table below to access the needed tax form and FYI for each tax credit. If claiming Enterprise Zone tax credits it is recommended that you review the Enterprise Zone FYI Publications available from the Department of Revenue. Businesses in the Enterprise Zone may qualify for these ten tax credits:
|TAX CREDIT||CREDIT AMOUNT||FORM||FYI|
|Investment Tax Credit||3% of equipment purchases||Online form||FYI Income 11|
|Job Training Tax Credit||10% of qualified training expenses||Online form||FYI Income 31|
|New Business Facility (NBF) Tax Credits:||NBF status req’d for these 3 credits||—||—|
|Jobs Credit||$500 per new job||Online form||FYI Income 10|
|Ag Processing Jobs Credit||$1,000 total per new a.p. job||Online form||FYI Income 10|
|Health Insurance Credit||$200 x 2 years per new h.i. job||Online form||FYI Income 10|
|R&D Increase Tax Credit||3% of increased R&D expenditures||Online form||FYI Income 22|
|Vacant Building Rehabilitation Tax Credit||25% of rehabilitation expenditures||Online form||FYI Income 24|
|Manufacturing / Mining Sales and Use Tax||Expanded S&U tax exemption in EZ||DR1191||FYI Sales 10
FYI Sales 69
|Commercial Vehicle Investment Tax Credit (CVITC)||1.5% of commercial vehicle purchases||CVITC Application||CVITC Details
FYI Income 11
|Contributions to Enterprise Zone Projects||25% cash / 12.5% in-kind of donation||DR0075*||FYI Income 23|
|Local Incentives||Increased incentives in some EZ areas||N/A||N/A|
*EZ Contribution Project will provide contributor w/ the DR0075 form.
To better understand how the Enterprise Zone incentives can work for your business, ACED has provided an Incentive Calculator for your use. Please read the instructions before calculating your benefits. Enterprise-Zone-Tax-Credit-Calculator_091113 Please note:
- The benefits calculated are ONLY ESTIMATES, and we encourage you to seek the advice of an accountant for more accurate figures.
- The calculator is in Microsoft Excel format.
Tax Credit Information
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 equal to 3 percent of the amount of the investment, subject to limitations on the amount which can be claimed in any one year. Investment which results from an in-state relocation is not eligible for the credit unless the new location qualifies as an expansion. Excess credits may be carried back three years and forward twelve. FYI: FYI Income 11 Statute: C.R.S. 39-30-104 Dept. of Revenue Regulation: Regulation 39-30-104
Job Training Credit
Employers who carry out a qualified job training program for their enterprise zone employees may claim an income tax credit of 12 percent of their eligible training costs. FYI: FYI Income 31 Statute: C.R.S. 39-30-104(4) Dept. of Revenue Regulation: Regulation 39-30-104(4)
New Business Facility (NBF) Jobs 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 of $1,100 for each such employee. An expansion of an existing facility may be considered a “new business facility” if the expansion adds at least 10 employees or a 10 percent increase over the previous annual average, if it is at least $1 million in investment, or, if less, at least doubles the original investment in the facility. The credit may be taken in subsequent years of the enterprise zone for each additional employee above the maximum number employed in any prior tax year. Excess credits may be carried forward five years. FYI: FYI Income 10 Statute: C.R.S. 39-30-105 Dept. of Revenue Regulation: Regulation 39-30-105
Enhanced Rural Enterprise Zone (EREZ)
Beginning January 1, 2003, the NBF Jobs Credit offers an additional credit of $2,000 per new job for New Business Facilities located in a designated Enhanced Rural Enterprise Zone. The total new job credit is $2,500. Adams County does not meet the criteria to qualify as an Enhanced Rural Enterprise Zone (EREZ). Enhanced Rural EZ Fact Sheet
New Business Facility (NBF) Agricultural Processing Jobs Credit
An additional credit of $500 per new business facility employee may be claimed by businesses which add value to agricultural commodities through manufacturing or processing. Businesses that qualify for the NBF Ag Processing Jobs Credit also qualify for the NBF Jobs Credit, and can take the $500 NBF Ag Processing Jobs Credit in addition to the $500 NBF Jobs Credit for a total of $1,000. Adams County does not meet the criteria to qualify as an Enhanced Rural Enterprise Zone (EREZ). FYI: FYI Income 10 Statute: C.R.S. 39-30-105 Enhanced Rural EZ Fact Sheet
Enhanced Rural Enterprise Zone (EREZ)
Beginning January 1, 2003, NBF Ag Processing Jobs Credit offers an additional credit of $500 per new agricultural processing job for New Business Facilities located in a designated Enhanced Rural Enterprise Zone. This is in addition to the regular NBF jobs credits, the EREZ NBF Jobs Credit and the standard NBF Ag Processing Credit for a total credit of $3,500 per new agricultural processing job in an EREZ. Adams County does not meet the criteria to qualify as an Enhanced Rural Enterprise Zone (EREZ). Enhanced Rural EZ Fact Sheet
New Business Facility (NBF) Health Insurance Credit
In order to encourage employer-sponsored health insurance plans, a taxpayer with a qualifying new business facility is allowed a two-year $1,000 tax credit for each new business facility employee who is insured under a qualifying employer-sponsored health insurance program. FYI: FYI Income 10 Statute: C.R.S. 39-30-105 Dept. of Revenue Regulation: Regulation 39-30-105
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. This credit equals 3 percent of the amount of the increase in the taxpayer’s R&D expenditures within the zone for the current tax year above the average of R&D expenditures within the zone area in the previous two years. No more than one fourth of the allowable credit may be taken in any one tax year. FYI: FYI Income 22 Statute: C.R.S. 39-30-105.5 Dept. of Revenue Regulation: Regulation 39-30-105.5
Vacant Building Rehabilitation Credit
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 percent of the cost of rehabilitating each building. The credit is limited to $50,000. FYI: FYI Income 24 Statute: C.R.S. 39-30-105.6 Dept. of Revenue Regulation: Regulation 39-30-105.6
Manufacturing and Mining Sales and Use Tax Credit
When machinery is used solely and exclusively in an enterprise zone, the standard statewide manufacturing/machinery exemption is broader:
- Machinery used solely and exclusively in a designated enterprise zone does not have to be capitalized to qualify for the exemption.
- Materials for construction or repair of machinery or machine tools are exempt from the state sales and use tax if the machinery is used exclusively in an enterprise zone.
- Mining operations are included in the definition of manufacturing when performed in an enterprise zone.
- Tax Form: DR1191 (For those who anticipate 100+ DR1191 forms file the DR1192) FYI: FYI Sales 10 (Manufacturing) FYI: FYI Sales 69 (Mining) Statute: C.R.S. 39-30-106 Regulation: Regulation 39-30-106
Contribution Tax Credit
A taxpayer who makes a contribution to certain eligible enterprise zone economic development projects including business assistance, job training, economic development marketing, community development and homeless organizations in zones may claim a tax credit. To be eligible, a proposed project must be approved by the local enterprise zone administrator and approved by the Colorado Economic Development Commission. The amount of the credit is 25 percent of the value of the contribution, up to $100,000 in tax credits (12.5% for in-kind contributions up to $50,000 in credit). For a list of eligible projects in each zone, click here. Tax Form: DR0075 (this form will be provided by an EZ Contribution Project upon donation.) FYI: FYI Income 23 Statute: C.R.S. 39-30-103.5 Dept. of Revenue Regulation: Regulation 39-30-103.5
Local Government Incentives in an Enterprise Zone
Any city, county or special district within an enterprise zone is authorized to negotiate with individual taxpayers who have qualifying new business facilities: a) an incentive payment or property tax credit equal to not more than the amount of the increase in property tax liability over pre-enterprise zone levels; and b) a refund of local sales taxes on purchases of equipment, machinery, machine tools, or supplies used in the taxpayer’s business in the enterprise zone. Please visit the Local Government Property Tax Incentives page of this website for more details on the statutory allowances provided by C.R.S. 39-30-107.5.
Enterprise Zone Legislation
During the 2010 Legislative Session, there were several bills that were passed resulting in significant changes to Enterprise Zone Tax Credits and the process by which Enterprise Zone tax forms are certified. The following list provides information on each change, the date the change will take effect and the requirements. For more information regarding Enterprise Zone Legislation, please visit the following website: www.advancecolorado.com
FOR MORE INFORMATION ABOUT THE ENTERPRISE ZONE PROGRAM CONTACT THE AGENCIES LISTED BELOW:
Adams County Economic Development
Attn: Melvin Yarber, Enterprise Zone Administrator
12200 Pecos Street, Suite 100 Westminster, CO 80234
Phone: 303-453-8518 Fax: 303-453-8505
Colorado Office of Local Affairs, EDC 1625 Broadway, #1700 Denver, CO 80202 303-892-3840 www.advancecolorado.com/ez
Colorado Department of Revenue, Taxpayer Services Division 1375 Sherman Street, Room 204 Denver, CO 80261 303-232-2416 www.taxcolorado.com