Colorado offers an impressive variety of incentives aimed at fostering innovation, job creation, and economic development.  From energy efficiency programs to tax credits for technology and manufacturing, the state provides a robust environment for businesses in diverse industries.  Below are some of the most valuable incentives available to businesses in Colorado, including eligibility criteria and potential value.

Colorado Job Growth Incentive Tax Credit

Overview

This program provides tax credits to businesses that create new jobs and increase economic activity in Colorado.  It is designed to support projects that bring significant employment growth to the state.

Eligibility

• Businesses must create at least five new full-time jobs that are expected to be sustained for at least one year.

• Must demonstrate that the job creation would not occur without the incentive.

Incentive Value

• The tax credit is based on the number of jobs created and can range from $500 to $4,000 per job, depending on the size of the project and the wages offered.

• The credit can be claimed annually for up to five years.

Application Process

Businesses must apply through the Colorado Office of Economic Development and International Trade (OEDIT), and the credit is awarded based on a competitive process.

Colorado Research and Development (R&D) Tax Credit

Overview

The Colorado R&D Tax Credit encourages businesses to invest in research and development by providing tax credits for eligible R&D activities conducted within the state.

Eligibility

• Companies must be engaged in R&D activities in Colorado related to the development or improvement of a product, process, or software.

• Eligible activities include research in the physical sciences, engineering, or computer sciences.

Incentive Value

• The credit is 3% of the first $1 million of qualified R&D expenses and 2% of expenses above $1 million.

• The credit can be carried forward for up to five years.

Application Process

·       Businesses must maintain detailed documentation of their R&D activities and submit an application to the Colorado Department of Revenue (CDR).

Colorado Manufacturing Sales and Use Tax Exemption

Overview

This program provides exemptions from state sales and use taxes for manufacturing equipment and materials, encouraging businesses to invest in new equipment and expand production capabilities.

Eligibility

• Businesses must be engaged in manufacturing activities and purchase equipment, machinery, or materials used directly in production processes.

• Exemption is available for both new and used equipment.

Incentive Value

• Exemption from state sales and use tax on eligible manufacturing equipment and materials.  This can result in significant savings depending on the size of the equipment purchase.

Application Process

• Businesses must submit documentation to the CDR to claim the exemption.

Colorado Enterprise Zone Tax Credit

Overview

The Enterprise Zone Tax Credit program offers tax credits to businesses located in designated "enterprise zones" in Colorado. These zones are typically in economically distressed areas, and the program aims to stimulate investment and job creation in these regions.

Eligibility

• Businesses located in a state-designated enterprise zone.

• Must create a minimum number of new jobs and/or make significant investments in property.

Incentive Value

• The credit can be up to $1,100 per new employee hired, depending on the type of business and area of operation.

• Additional credits may be available for property investments and specific types of research and development.

Application Process

• Businesses must apply through OEDIT and provide information on their location, job creation, and investment plans.

Colorado Renewable Energy and Energy Efficiency Incentives

Overview

Colorado offers various incentives to businesses that implement renewable energy systems or improve energy efficiency. This includes tax credits, grants, and rebates to encourage businesses to adopt sustainable practices.

Eligibility

• Businesses that install renewable energy systems, such as solar, wind, or biomass energy.

• Businesses that make improvements to energy-efficient systems or equipment.

• Eligible improvements include energy-efficient lighting, HVAC systems, and insulation.

Incentive Value

• Tax credits or rebates of up to 25% of the cost of energy efficiency improvements or renewable energy installations.

• Additional grants and funding opportunities may be available through local utility programs.

Application Process

• Businesses must submit applications through OEDIT or local utilities to claim credits or rebates.

Colorado Film Incentive Program

Overview

The Colorado Film Incentive Program provides financial incentives to film and television production companies that choose to film in Colorado.  This program aims to support the state’s entertainment industry and attract productions from all over the world.

Eligibility

• Production companies must meet a minimum spend threshold in Colorado.

• Eligible productions must demonstrate the potential to create local jobs and stimulate economic activity.

Incentive Value

• A 20% to 30% rebate on qualified production expenses.

• Additional rebates may be available for hiring local crew or using in-state services.

Application Process

• Applications must be submitted to the Colorado Office of Film, Television, and Media for approval, and rebates are granted based on the amount spent and job creation.

Colorado Innovation Investment Tax Credit

Overview

This program encourages investment in early-stage innovation companies by offering tax credits to investors who fund eligible startups in Colorado.

Eligibility

• Investors must provide funding to eligible innovation companies in the areas of clean energy, technology, or other high-growth sectors.

• Companies must be located in Colorado and have fewer than 100 employees.

Incentive Value

• Tax credits of up to 25% of the investment amount, with a maximum of $50,000 per investor.

• The program is intended to make it easier for startups to attract venture capital and grow their businesses.

Application Process

• Investors must apply through OEDIT and provide documentation of the investment made in the qualifying company.

Colorado Sales Tax Exemption for Clean Energy Equipment

Overview

This program provides a sales tax exemption for equipment used to generate or store clean energy. It encourages businesses to invest in clean energy technology to meet sustainability goals.

Eligibility

• Businesses must be engaged in generating or storing clean energy, such as solar, wind, or battery storage.

• The exemption applies to equipment purchases used in the production of clean energy.

Incentive Value

• Full sales tax exemption on eligible clean energy equipment purchases.

• Savings depend on the size of the purchase and the amount of energy production.

Application Process

• Businesses must submit a request to CDR for a certificate of exemption.

Conclusion

Colorado’s incentives are tailored to support business growth in a wide range of industries, from renewable energy to entertainment and technology.  These programs provide valuable financial assistance for businesses that make significant investments in the state, create jobs, and drive economic growth.