The Colorado Enterprise Zone (EZ) Program is designed to promote a business-friendly environment in economically distressed areas by offering state income tax credits that incentivize businesses to locate and develop in, and non-profit organizations to assist with the needs of these communities.

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Private-sector business activity encouraged by these income tax incentives brings job opportunities and capital investment to economically distressed areas. The private investment results in tax revenue for school districts, cities, counties, and the state, outweighing the costs of the tax credits granted.

 

The Enterprise Zone program encourages businesses to locate and expand within economically distressed areas. Each EZ incentive is tied to a specific business expansion activity; tax credits are earned after the activity takes place, including: business personal property investment, providing job training, and creating net new jobs. These activities benefit the local economy with increased activity and they also result in additional tax revenues for local governments and the state.

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• Investment Tax Credit – Investment in business personal property increases the business’ capacity. Taxes paid by the business on these purchases far exceed the amount of credits awarded for all tax credits under the EZ program.

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• Job Training Tax Credit – This tax credit encourages the development of a skilled workforce within the distressed community. Even if the business leaves the community, the skilled workforce typically remains as an asset to the local economy.

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• New Employee Tax Credit – Businesses adding and filling new jobs will reduce unemployment in the community. Additionally, state and local governments gain tax revenue from these employees.

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• Employer Sponsored Health Insurance Tax Credit – Businesses are motivated to provide a qualified health insurance plan to employees, potentially improving community health and reducing public health cost.

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• Research and Development Tax Credit – Increased investment in research and experimentation supports an innovative economy. An R&D focused business that sells products, services, or intellectual property will bring outside dollars into the local economy.

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• Vacant Commercial Building Rehabilitation Tax Credit – This tax credit encourages the revitalization of dilapidated buildings and blighted areas, bringing new businesses and employees to the community. State and local tax revenues will increase.

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• Commercial Vehicle Investment Tax Credit - This incentive encourages businesses to register new commercial vehicles in Colorado where they will pay licensing and registration fees, as opposed to these being registered in other states with lower fees.

       (Source: OEDIT)

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