Incentives are an economic development tool that help ensure the vitality of an area or region. These incentives exist to spark and reward the growth and expansion of local businesses. All of Delta, Montrose, Ouray, Hinsdale, as well as most of Gunnison and San Miguel counties, currently lie within the Region 10 Enterprise Zone which is administered by Region 10. Note: Delta, Ouray and Hinsdale counties are Enhanced Enterprise Zones which provide additional incentives.
The Colorado Enterprise Zone (EZ) offers state income tax credits that incentivize businesses to develop and expand, as well as retain and create jobs.
Enterprise Zone Tax Credits
The Colorado Enterprise Zone (EZ) offers state income tax credits that incentivize businesses to develop and expand, as well as retain and create jobs. EZ tax credits are available to registered for-profit and not-for-profit organizations. Region 10 is the designated administrator for EZ tax credits for Delta, Montrose, Gunnison, Hinsdale, Ouray, and San Miguel counties. Incentives are available to businesses located in designated Enterprise Zones, providing tax credits for certain types of business activities.
Business Tax Credits
Businesses (which includes a farm or ranch) located in an Enterprise Zone may be eligible for up to 10 different state tax credits including capital investment tax credits, job tax credits, job training, and research and development tax credits, and other credits and incentives. Currently, Delta, Hinsdale, and Ouray counties are Enhanced Rural Enterprise Zones through 2020, which provides greater financial incentives to businesses to promote and encourage new job creation in designated economically depressed rural Enterprise Zone counties.
Detailed information about each of the EZ tax credits is available at Choose Colorado’s website.
Specific tax questions should be directed to the Department of Revenue or to your CPA. General information for the EZ program can be obtained from Region 10.
- Enterprise Zone Fact Sheet
- Enhanced Rural Enterprise Zone Fact Sheet
- BUSINESSES MUST PRE-CERTIFY FIRST
Pre-certification is validation that your business is located in an Enterprise Zone and that Enterprise Zone Tax credits are a factor to the start-up, expansion or relocation of your business. Legislation requires (EZ) businesses to obtain pre-certification prior to engaging in an activity to earn an EZ tax credit each tax year. It is suggested that any business that may be planning on using one or more of the credits during the year complete the pre-certification in early January. Submitting information for pre-certification does not obligate the business to actually earn or use the credit(s). Pre-certification (generally beginning of income tax year) and regular Certification (end of income tax year) both require approval by the Region 10 Enterprise Zone Administrator and will need to be filed electronically.
Contribution Tax Credits
One of the Enterprise Zone credits pertains to designating a project or organization as an Enterprise Zone Contribution Project. This designation allows contributors of approved projects to receive a 25% State Tax Credit for cash donations to that Enterprise Zone Project and a 12.5% State Tax Credit for in-kind contributions. For contributions to be eligible for the Contribution Tax credit:
- Donations must be made to an approved EZ project
- Donation must meet the minimum dollar amount set by that organization (ranges from $50 – $250)
- Donors must have a 0075 form for their tax return
BECOMING A DESIGNATED ENTERPRISE ZONE CONTRIBUTION PROJECT
A representative of the project wishing to seek Enterprise Zone Development Project designation should contact the Enterprise Zone administration staff to discuss the project, requirements, the Region 10 Comprehensive Economic Development Strategy (CEDS), and the guidelines of the Colorado Economic Development Commission.