Taxes

Colorado ranks among the top-20 states (16th) for best corporate tax system and business-friendly tax climate according to the Tax Foundation's 2017 State Business Tax Climate Index.

Rewarding investment and innovation.

Colorado is a modified right-to-work state, with the most progressive labor law in the country. The Colorado Labor Peace Act requires two elections and approval from 75 percent of a company's workers before becoming unionized. Follow the link for more information on Colorado's unique labor law

Colorado provides a competitive tax structure that rewards investments and business innovation. In 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 Targeted Tax Incentives

Colorado offers various targeted tax incentive programs to companies creating new jobs and investment in the state:

  • Biotechnology Sales and Use Tax Refund - State sales and use taxes paid on the sale, storage, use, or consumption of tangible personal property to be used in Colorado directly and predominantly in research and development of biotechnology are refundable. 
  • Colorado Aircraft Manufacturer New Employee Tax Credit - Aircraft manufacturers located in a Colorado aviation development zone may qualify for a state income tax credit of $1,200 per new employee.
  • Enterprise Zone Program - The Enterprise Zone Program provides tax credits for private enterprise to expand and for new businesses to locate in economically distressed areas of Colorado as designated by the Colorado Economic Development Commission (EDC). Businesses located in a zone may qualify for various Enterprise Zone Tax Credits and Incentives to encourage job creation and investment in Colorado. 
  • Advanced Industry Investment Tax Credit - Helps Colorado advanced industry companies receive capital from Colorado investors.
  • Sales Tax Exemption on Components for Production of Energy from Renewable Energy Sources
    Components used in the production of electricity from a renewable energy source are exempt from state sales and use tax.
  • Qualifying Therapeutic Discovery Projects - A tax credit provided under new section 48D of the Internal Revenue Code (IRC), enacted as part of the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148). The credit is a tax benefit targeted to therapeutic discovery projects.  

Local Property Tax Incentives

The Colorado Urban and Rural Enterprise Zone Act and House Bill 02-1399 enables local governments, at their discretion, to provide property tax credits or incentive payments (Business Incentive Agreements (BIA)) based on the amount of increased property taxes for qualifying new business activity in their jurisdictions.

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