Colorado Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.

We were recently asked about credits and incentives in Colorado. I was able to speak with some Colorado economic development professionals and learned some of their details (Colorado Office of Economic Development and International Trade (OEDIT) click here).

Colorado is in the middle range for corporate tax burdens and incentives when compared with other states.  Colorado ranks 19th in the The Tax Foundation’s 2014 Business Tax Climate Index (click here).

Colorado has a moderate selection of incentives, credits, loans, and programs to assist businesses for increasing and retaining jobs and increasing business investments.  Job Growth Incentive Tax Credits provide a 50% of FICA growth tax credit to create a minimum of 20 new jobs in the state, or a minimum of 5 jobs in certain zones (click here).  Other incentives include Advanced Industry investment credits and various sales tax and energy tax exemptions.  The Strategic Fund Incentive provides comprehensive discretionary assistance to new and expanding businesses (click here). Specific requirements depend on business type, size, wages, location, and other factors.

Another big consideration — an application and approval process is required for all of Colorado’s OEDIT incentives.
 
Compared to Georgia, Colorado has: 

  • Somewhat lower taxes:  Lower corporate income tax rate.  Lower personal income tax rate.  Similar sales taxes and higher property taxes.
  • A smaller range of industries eligible for incentives if adding jobs and capital investments, and a far narrower range for training incentives.
  • NO opportunities for incentives unless pre-approved.
  • Location, location, location — cool mountains and great climate, if that’s what is important to the business

To summarize, Colorado is not as competitive as leading states for new and expanding businesses, unless those businesses really need Colorado’s Central Rockies location.
 
Do any of your clients have Colorado connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!

 
DaleSig