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 (high unemployment rate, low per capita income, and/or slower population growth rate).
Why have a state Enterprise Zone program?
In fiscal year 2011, a projected $126.4 million in tax revenue was generated for school districts, cities, counties and the state associated with earning $43.8 million in EZ tax credits - a return of 288% in tax revenue alone from a few sources. In addition, the EZ program benefited communities across Colorado by:
- 40 vacant buildings rehabilitated for a commercial use (that were 20 years old and had been vacant for 2 years)
- 31,000+ employees trained
- 5,325 net new jobs created with a cost per job of $500
- $142 million invested into research and development by the private sector associated with the EZ Research and Development credit
- $2.5 billion EZ businesses invested in new equipment
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 and these areas are often just pockets of economic distress not including the larger business districts
- The overall size of the EZ is largely unchanged since the early 1990s
- An evaluation of EZ boundaries is planned for 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."
Click here to get Pre-certified or Certified
If approved, an email will be sent to the preparer and can be used as supporting documentation with income tax filings.
Process for Certifying
Business Tax Credits (not including Commercial Vehicle)
Investment Tax Credit, Job Training Tax Credit, Jobs Credit, Agricultural Processing Jobs Credit, Health Insurance Credit, Research and Development Credit, Vacant Building Credit
- A business must get Pre-certified before any activity is performed to earn a credit. Click here to get Pre-Certified or Certified.
- A business must perform an activity to earn a credit after Pre-certification approval.
- Typically at the end of the income tax year, a business must get Certified summarizing all activities that were performed during the income tax year that earned a credit. Click here to get Pre-Certified or Certified.
Commercial Vehicle Investment Tax Credit
- A business must get Pre-certified before purchasing a commercial vehicle. Click here to get Pre-Certified online or submit the Commercial Vehicle Pre-certification Paper Form to your local administrator.
- A business must purchase a qualifying commercial vehicle after Pre-certification approval.
- A business can complete the Commercial Vehicle Application via paper form and submit to OEDIT following the instructions on the application.
Contribution Tax Credit
- Taxpayers (individual or business) must make a donation to an approved Enterprise Zone Contribution Project. See list here.
- The project will provide the taxpayer with a DR0075 form for their donation.
- Taxpayer can claim the tax credit on their state income tax filing.