Empowering Businesses to Thrive
Whether your business is large or small, the Colorado Office of Economic Development & International Trade offers numerous incentive programs to help create and retain jobs in Colorado. These include grants, tax credits, access to capital through private, local, state, and federal financing options, and no-cost advising and business training. Many of these programs are also tailor-made to support business creation and retention in rural areas like Morgan County.
Incentives
Opportunity Zones
Colorado has 126 designated Opportunity Zones. Two of the designated Opportunity Zones are located in Morgan County. For more information and resources on Opportunity Zones in Colorado, visit the Colorado Office of Economic Development & International Trade.
Click here for a searchable, interactive map of the Opportunity Zones throughout the United States
The 2017 Tax Cuts and Jobs Act (TCJA) established Opportunity Zones to invite private investment in designated economically-challenged communities throughout the United States. Private investment in Opportunity Zones is encouraged through tax incentives.
Opportunity Zones are designed to spur economic development by providing tax benefits to investors.
First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or until December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%.
Second, if the investor holds the investment in the Opportunity Fund for at least 10 years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged. (Source)
IRS Opportunity Zones FAQ
Q: What is an Opportunity Zone?
A. An Opportunity Zone is an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service. (Source: IRS Opportunity Zones FAQ)
Q: How Do I Find a List of Opportunity Zones?
A. For a map of Opportunity Zones in Colorado, click here.
Q: What is a Qualified Opportunity Zone?
A. A Qualified Opportunity Fund is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in a Qualified Opportunity Zone. (Source: IRS Opportunity Zones FAQ)
Q: Is there an Opportunity Fund in Colorado?
A. An Opportunity Zone is an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment. Localities qualify as Opportunity Zones if they have been nominated for that designation by the state and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service. (Source: IRS Opportunity Zones FAQ)
Enterprise Zones
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.
Morgan County is located in Zone 9: Northeast Enterprise Zone.
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.
- Investment Tax Credit – Investment in business personal property increases the business’s capacity. Taxes paid by the business on these purchases far exceed the amount of credits awarded for all tax credits under the EZ program.
- 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.
- 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.
- 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 costs.
- 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.
- 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.
- 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 registering in other states with lower fees. (Source: OEDIT)
