Enterprise Zone Tax Credits
Colorado's Enterprise Zone (EZ) program provides tax incentives to encourage businesses to locate and expand in designated economically distressed areas of the state - those having a high unemployment rate, low per capita income, or a low population growth rate.
Why have a state Enterprise Zone program?
Private-secotr business activity encouraged by these income tax incentives bring job opportunities and capital investment to economically distressed areas. The private investment results in tax revenue for school districts, cities, counties and the state outweighing the cost of the tax credits granted.
Benefits to Colorado communities in fiscal year 2013 were:
- $3.8 billion invested in business property/equipment
- 70,000+ employees trained
- 6,610 net new jobs created at $500/job
- $116 million invested in research and development
- $652,000 invested in vacant buildings, revitalizing business districts
Other interesting facts
- 99% of EZ certifications are for small businesses
- 95% of the EZ land area is in rural areas of the state
- Less than 3% of the businesses in the state earn EZ tax credits - this is because only 5% of EZs are in urban areas with the zone limited to pockets of economic distress and not including the larger business districts
- The overall size of the EZ is largely unchanged since the early 1990s
- Areas are being re-evaluated for EZ designation against the latest qualifying data commencing this calendar year, 2014
In a study conducted by the Leeds School of Business, they stated "Given the pervasiveness of enterprise zones and similar tax incentives across the nation (present in 39 states and Washington D.C.), it is imperative that Colorado maintain incentives in order to compete with other incentive‐rich states for business acquisition or retention."