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Business Owner's Guide: Colorado Enterprise Zones

Updated: Feb 17

Colorado Enterprise Zones have been around since 1986, and numerous modifications have taken place over the years. Basically, business located within one can receive tax credits for a number of different expenditures that they would have made anyway! Sometimes the Enterprise Zone Credit ends up being the deciding factor of weather to make an investment or not.

The Credits & Incentives

Job Training Credit- Businesses can earn a state income tax credit for 12% of eligible job-training costs for employees working within the enterprise zone.

New Employee Credit- Businesses can earn a state income tax credit of $1,100 per net new employee. Businesses can earn more tax credits if the business is an agricultural processor or is in an enhanced rural enterprise zone.

Employer Sponsored Health Insurance - For the first two years that a business is in an enterprise zone, the business can earn $1,000 per net new employee insured under a qualified health plan for which the employer pays at least 50% of the cost.

Research & Development Credit - Businesses can earn a 3% tax credit for an increase in annual research and development expenses compared to what they spent the prior two years.

Vacant Commercial Building Rehabilitation - If a business rehabilitates a commercial building that is at least 20 years old and has been vacant for at least two years, the business can earn a state income tax credit for 25% of rehabilitation costs (up to $50,000 in credits on $200,000 or more on costs).

Commercial Vehicle Investment Credit - A taxpayer can earn a state income tax credit for 1.5% of the price of new commercial trucks, truck tractors, tractors, semi-trailers, and associated parts registered in Colorado and used in an enterprise zone.

Investment Tax Credit - Businesses can earn a state income tax credit for 3% of an investment in business personal property. New business personal property increases a company’s capacity.

Sales & Use Tax Exemption for Manufacturing and Mining - The statewide sales and use tax exemption for purchases of manufacturing equipment is expanded to include non-capitalized equipment and parts if the business is located within a zone. The enterprise zone statutes also expand manufacturing to include mining.

Enterprise Zone Search

Click HERE to search Colorado’s Office of Economic Development’s website to see if your business is located within an Enterprise Zone. If it is, you might be asking yourself, “why hasn’t my Colorado Accountant not told me about this credit?” And that’s a completely valid question that you should address with them after you’ve read the rest of this article.

Pre-Qualify & Certify

Login to your account or create a new account through the OEDIT Application Portal. A new users account may take up to 24hours to be approved. After you’ve received login access you can submit a “Pre-certification” where the Office will review the request and verify that the business is within the Enterprise Zone. Once verified the office will send you an email that the verification is complete. Finally, A request is submitted again to the office for an official certification. Once the Certification is Approved the office will send an email with the date that the certification has been accepted.

Things to Know

Your Enterprise Zone certification must be done annually. Any expense or investment made before the certification is in place will not qualify for Enterprise Zone Credits. So, plan to do this at the beginning of each year or ensure that you don’t make any qualifying expenditures until the Certification has been approved.

2024 Precertification applications are NOW being accepted! Click HERE to get started. Still have questions? Book a free chat with me below.

Book a Free Discovery Appointment

See if Rangeview Tax & Accounting is a good fit for you with a Free Discovery Chat! We offer in-person, on-site, and telephone discovery chats. On site chats are typically business with exceptions available under appropriate circumstances for individuals.

Book a Paid Consultation

Our paid consultation is $50 and puts you on the line with a tax professional who will answer questions that you have related to IRS Code, and Tax Strategies. Pay for your consultation, select one of the available appointments, and provide the general topic of discussion or questions that you wish to discuss. If you choose to move forward with our services, we will credit the consultation fee towards a future tax return preparation.

Tax Projections

Stay on top of the upcoming filing season with a tax projection! We will collect various data including current pay stubs, expected business income, and more extraordinary situations like selling a home, rental, or business. From there we annualize the figures and run a mock tax return to get a good idea of an expected tax liability. This gives us a baseline in which we can further advise tax planning strategies that may apply.


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