SPOTLIGHT PROGRAMS

Job Growth Incentive Tax Credit (JGITC): Businesses that create at least 20 new jobs (5 new jobs if located in an Enhanced Rural Enterprise Zone) with wages of at least 100% of the annual wage of the county where the project is located may receive a performance-based state corporate income tax credit. Businesses also must maintain the net new jobs for at least one year. They must also demonstrate that they considered at least one other state and the JGITC is a major factor for them locating in Colorado. The credit is equal to 50% of FICA or payroll taxes the company pays for new hires. Credits may be claimed for up to 8 years and are non-refundable. Unused credits may be carried forward for up to 10 years.

Transferable Tax Credit (TTC): This high-impact program allows projects that make major capital investments to monetize certain non-refundable tax credits that are earned as part of the project. Under the program, TTC allows approved companies to transfer eligible income tax credits, such as the Job Growth Incentive Tax Credit or Enterprise Zone Tax Credits, that are normally cannot be monetized unless the company had sufficient state income tax liability. To be eligible, a business must make a capital investment of at least $100 million over the ten consecutive income tax years that commence immediately following the date of pre-certification by the approval body, the Colorado Economic Development Commission.

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TAX CREDITS

Enterprise Zone Tax Credits: Businesses that locate in an Enterprise Zone may qualify for the following non-refundable corporate income tax credits:

• Investment Tax Credit (ITC): 3% of business personal property
• Job Training Tax Credit: 12% of qualifying training expenses
• New Employee Credit: $1,100 per job
• Employer Sponsored Health Insurance: $1,000 per job for first two years
• Enhanced Rural EZ: $2,000 per job
• R&D Increase Tax Credit: 3% of increased R&D expenditures
• Vacant Commercial Building Rehabilitation Tax Credit: 25% of rehab expenditures

To encourage investment in the state’s most rural and economically distressed areas, Enhanced Rural Enterprise Zones (EREZ) have been created.  Businesses that locate in Enhanced Rural Enterprise Zones may receive larger tax credit amounts and additional benefits than those offered under the Enterprise Zone program.

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TAX EXEMPTIONS/ABATEMENTS

Sales and Use Tax Exemptions: An exemption of state sales and use taxes is available for purchases of manufacturing machinery, machine tools, and parts.

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DIRECT FINANCIAL ASSISTANCE

Strategic Fund Incentive: This discretionary program offers performance-based cash grants ranging from $3,000 to $6,500 for each new job created and retained for one year. The amount is dependent on the county project is located and the average annual wage of jobs created. To qualify, a business must create jobs that pay an average wage that is at or above 100% of the average wage of the county where the project is located. Local governments must provide one-to-one matching funds for a business to be eligible for this program. Companies pursuing a Strategic Fund incentive may pursue a Job Growth Incentive Tax Credit for separate new jobs on a single project. However, the two programs cannot incentivize the same job on a project.

Location Neutral Employment (LONE) Program: The LONE program is a supplement to the Strategic Fund Incentive which promotes businesses to hire remote workers in Colorado’s rural areas, in addition to hiring a core employment base at a physical location in one of Colorado’s urban areas. The program waives the local match requirement for grant funds, thus eliminating this requirement for rural communities participating in the LONE program.

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JOB TRAINING

Skill Advance Colorado Job Training Grant: The Skill Advance Colorado Job Training Program, formerly known as the Colorado First and Existing Industry Grant Program offers job training grants of up to $1,650 per job for businesses that are expanding in or relocating to Colorado or up to $1,400 per job for qualified existing businesses. A minimum of 40% of the total training costs must be covered by the company.

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Last Updated: April 2023