Rewarding investment and innovation.
Colorado provides a competitive tax structure that rewards investments and business innovation. All levels of government recognize the importance of providing citizens services and infrastructure while maintaining a fair and equitable tax structure.
Colorado has the 13th most business-friendly tax climate according to the Tax Foundation's 2008 State Business Tax Climate Index. Also, Colorado ranked 30th in state and local tax burden as a percentage of income in 2007 and 23rd lowest in total tax burden for state, local, and federal taxes as a percentage of income.
In November 2005, Coloradoans voted to invest in Colorado’s future, without raising taxes. Referendum C allows the state to retain excess tax revenues and permits the state to spend those revenues on K-12 public education, healthcare, public higher education, and transportation projects.
Colorado Governor Bill Ritter signed into law a significant economic development package for the 2008 Colorado General Assembly to enhance the competitiveness of Colorado and its top industries. Major components of the package included:
- Simplifying Colorado's corporate income tax structure through a "single factor" apportionment, allowing companies to pay taxes based solely on their "sales" in the state
- Raising Colorado's Business Personal Property Tax exemption from $2,500 to $7,000 over the next five years
- Eliminating the "Fly Away Tax" on small jets manufactured in Colorado and sold in other states or countries
In addition, Colorado offers various targeted tax incentive programs to companies creating new jobs and investment in the state:
Colorado Targeted Tax Incentives
- Aircraft Manufacturer Tax Credit - Aircraft manufacturers that locate within a Colorado Aviation Development Zone (ADZ) may qualify for a state income tax credit of $1,200 per new employee.
- Biotechnology Sales and Use Tax Refund - Qualified taxpayers may seek a refund every year for all Colorado sales and use taxes they paid on purchases of tangible personal property used directly and predominately in research and development of biotechnology.
- Colorado Film Incentives Cash Fund - Films produced in Colorado can qualify for a 10% rebate of Colorado production expenses for motion picture, television, and similar film productions.
Local Property Tax Incentives
- The Colorado Urban and Rural Enterprise Zone Act and House Bill 02-1399 enable local governments, at their discretion, to provide property tax credits or incentive payments ("Business Incentive Agreements" or "BIA's") based on the amount of increased property taxes for qualifying new business activity in their jurisdictions.
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