Rewarding investment and innovation.
Colorado provides a competitive tax structure that rewards investments and business innovation. According to the Small Business and Entrepreneurship Council’s Business Tax Index 2014, Colorado as the 9th best state for taxes on entrepreneurship and small businesses.
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.