Rewarding investment and innovation.
Colorado is a Modified Right-to-Work State, with the most progressive labor law in the country. Under the Colorado Labor Peace Act, if an employer is represented by a union under the National Labor Relations Act, at least 75 percent of the employees must vote in favor of an all-union agreement.
Without the 75 percent approval, there can be no all-union agreement in the collective bargaining agreement, just as in a Right-to-Work State. In 2014, only 9.5 percent of Colorado’s workforce was a member of a union. A 2015 study showed that Colorado employment grew six times faster than unionized states from 2008-2014. For more information, see the blog post "Economic Development and Right-to-Work Laws" by Tom Clark, CEO of the Metro Denver EDC.
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.
- Sales Tax Exemption on Aircraft and Aircraft Parts - The sale of a new or used aircraft to a person who is not a resident of Colorado for registration and primary use outside of the state is exempt from state sales 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.