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Colorado Incentives and Workforce Development Guide

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INCENTIVES

Advanced Industry Investment Tax Credit (AIITC): Issues tax credits to investors who make equity investments in advanced industry startups. This program is based on the same seven advanced industries as the Advanced Industry Accelerator Grant program. Credits are limited, both at the individual level and the program level.

Aviation Development Zone Tax Credit (ADZ): A business or any portion of a business that is involved in the maintenance and repair, completion or modification of aircraft located within the boundaries of an airport designated as an Aviation Development Zone may qualify for a state income tax credit of $1,200 per new full-time employee.

Biotechnology Sales and Use Tax Refund: Colorado promotes its biotechnology industries by providing them with a taxpayer-friendly means to recover the sales and use previously paid tax expenses on equipment and supplies used for research and development.

Colorado FIRST/Existing Industry Customized Training Programs: Colorado First and Existing Industry grants are jointly administered by OEDIT and the Colorado Community College System. By paying costs incurred by businesses associated with job training, the programs increase transferable job skills that support Colorado Company’s competitiveness, the state’s ability to attract businesses and enhance worker’s resumes and long-term employment opportunities.

Enterprise Zone Tax Credits (EZ): Colorado’s Enterprise Zone (EZ) program provides tax incentives that bring economic development to economically distressed areas of the State. Incentives encourage businesses to locate and expand in enterprise zones and encourage public/private partnerships for economic and community development projects.

Film Incentive Program: The Office of Film, Television & Media attracts and facilitates content creation in the state in order to generate economic growth and job creation in all of its communities. The office administers a 20% performance-based rebate.

Historic Preservation Tax Credit (HPTC): The Historic Preservation Tax Credit is a resalable tax credit to the owners of designated commercial properties that do a certified rehabilitation of their property. The program is jointly administered by History Colorado and OEDIT and will start accepting applications in July 2015, and can start reserving tax credits in January 2016. Owners can apply for multiple properties, although there is a limit of $1 million per year on any given property. Since there are limits on the total credits the program can reserve each year, applications will be processed on a first come, first served basis.

Job Growth Incentive Tax Credit (JGITC): Job Growth Incentive Tax Credit is a performance-based program that provides state income tax credit to businesses that create new jobs that would not have occurred in Colorado without this program. The lead role in working with customers and presenting the program to the EDC is undertaken by the Corporate Development team and OEDIT assists in this role, provides a financial analysis of applicants, negotiates contracts and calculates incentive payments.

Local Government Incentives: Local governments can provide property tax credits or incentive payments based on the amount of increased property taxes for qualifying new business activity in their jurisdictions.

Manufacturing Sales and Use Tax Exemption: Colorado encourages manufacturers to locate their manufacturing operations in Colorado, recognizing their importance to the state’s economy. Colorado provides an exemption from state sales and use tax on purchases of manufacturing machinery, machine tools and parts.

Procurement Technical Assistance Center (PTAC): The Colorado Procurement Technical Assistance Center (PTAC) Program provides specialized and professional technical assistance at no cost to businesses that are seeking to pursue and successfully perform under contracting and subcontracting opportunities with federal, state and local governments.

Public Infrastructure Grants: The Infrastructure Assistance program is designed to create new permanent jobs and retain existing jobs, primarily for low‐ and moderate‐income persons by offering grants to build out publically owned infrastructure which is needed to serve a business (e.g. rail spurs, utilities etc).

Sales Tax Exemption on Components for Production of Energy from Renewable Energy Sources: Components used in the production of electricity from a renewable energy source, including wind, are exempt from state sales and use tax. Components used in solar thermal systems are also exempt from state sales and use tax.

Strategic Cash Fund Incentive (SF): The Strategic Fund Cash Incentive program is a performance-based grant for the creation of net new jobs in Colorado that meet certain requirements. The program supports and encourages new business development, business expansions and relocations that have generated new jobs throughout the state. The Strategic Cash Fund also provides support for initiatives pertaining to key industries or regional development. The lead role in working with customers and presenting the program to the EDC is undertaken by the Corporate Development team and OEDIT assists in this role, provides a financial analysis of applicants, negotiates contracts and calculates incentive payments.

FINANCING

Advanced Industry Grant Program (AI): The Advanced Industries (AI) Accelerator Programs were created in 2013 to promote growth and sustainability in these industries by helping drive innovation, accelerate technology commercialization, encourage public-private partnerships, increase access to early stage capital and create a strong ecosystem that increases the state’s global competitiveness. The program provides Proof of Concept Grants to research institutions with technology transfer offices, early stage companies and to non-profits that provide infrastructure that fills gaps in the AI ecosystems and can be used as matching dollars for federal funds.

Advanced Industries Export Grant: The Advanced Industries Export Grant is a Colorado financial assistance program for aspiring and current exporters in Colorado’s Advanced Industries (Aerospace, Bioscience, Electronics, Energy and Natural Resources, Infrastructure Engineering, Technology and Information and Advanced Manufacturing). The grant program supports small- and medium-sized businesses in the advanced industries and offsets international business development and related marketing costs. The program encourages small and medium-sized Colorado businesses to develop export markets.

Bioscience Discovery Evaluation Grants: The Bioscience Discovery Evaluation Grant Program (BDEGP) aids in the growth of the bioscience industry in Colorado. The program advances new technologies from the lab toward commercial products and services, supporting innovation, company formation, and job creation. Effective 1/1/15, this program merges with the Advanced Industries Accelerator program.

Cash Collateral Support (CCS) SSBCI: Cash Collateral Support (CCS) creates greater access to capital for small- and medium-sized businesses operating in Colorado that are experiencing difficulty securing credit due to collateral shortfalls. CCS uses small amounts of public resources to encourage private lender financing. The program provides a deposit of cash as collateral for a business loan or credit facility when a business cannot meet the lender’s collateral requirements.

Certified Capital Companies Program (CAPCO): makes venture capital funds available to new or expanding small businesses throughout Colorado. The program encourages new business development and expansions of businesses by making a $75 million statewide pool available for investment throughout Colorado, and a $25 million rural pool available for investment in designated rural counties in Colorado. The CAPCO Program is anticipated to create new employment opportunities within the state and to stimulate economic growth.

Colorado Capital Access (CCA) SSBCI: Colorado Capital Access (CCA) creates greater access to capital for small- and medium-sized businesses operating in Colorado by using small amounts of public resources to encourage financing by eligible lenders (such as banks and community development financial institutions). CCA is a credit enhancement that helps reduce the risk of loan losses by partially funding a loan loss reserve at each participating lender.

Colorado Credit Reserve (CCR): The Colorado Credit Reserve Program increases the availability of credit to small businesses in Colorado by establishing a pooled loan‐loss reserve fund that banks or sponsored lending entities may access to recover losses associated with loans registered with the program.

Community Development Block Grant (CDBG) Business Loan Funds (BLFs): The Business Loan program is responsible for promoting and fostering economic development efforts at the local level by providing financial assistance in the form of loans and loan guarantees to businesses in their respective regions. The loan program is locally driven, with each loan fund having its own local loan review committee and local Board of Directors. Colorado uses federal funds and Community Development Block Grant Funds (CDBG Funds) it receives to provide funding to aid the state’s Business Loan Funds.

Community Development Block Grant Disaster Recovery (CDBG-DR): The CDBG-DR grant will support recovery efforts in 18 Presidentially declared flood-impacted counties, with a majority of the funds going to the most impacted counties: Boulder, Larimer and Weld. Programs will focus on housing, public infrastructure, long-term planning and economic development and, as stipulated by the grant, 50 percent of the funds will be distributed to low- and moderate-income households.

Community Development Block Grant Disaster Recovery (CDBG-DR) Tourism Marketing Grant: The Tourism Marketing Grant Program will assist non‐profit and quasi‐governmental entities to promote tourism and visitor‐related jobs, job retention and/or economic impact in the Flood Designated Disaster Area as previously defined. These marketing promotional grant funds will be distributed to entities that have tourism and visitor related business communities in their jurisdictions that have suffered concentrated economic losses that have a large impact on the local economy relative to the size of the community.

Community Development Block Grant (CDBG) Planning and Feasibility Studies: CDBG Planning and Feasibility Study grant program provides funding to determine the feasibility of a project or to plan for a project to be located in Colorado. These projects need to meet an economic development objective and create or retain permanent jobs primarily for low- and moderate-income persons.

Private Activity Bonds: The Manufacturing Revenue Bond Program provides favorable, tax-exempt Private Activity Bond financing to small manufacturers in Colorado. The program helps finance real estate, machinery and equipment associated with expansion projects that are specific to manufacturers. The Colorado Department of Local Affairs and the Colorado Housing and Financing Authority offer Private Activity Bond Financing for small manufacturers, and the Colorado Department of Agriculture offers Private Activity Bond Financing for small agricultural manufacturers.

Regional Tourism Act (RTA): The Regional Tourism Act establishes a program that gives local governments the opportunity to apply to the Economic Development Commission (EDC) for approval of a large scale Regional Tourism Project that is of an extraordinary and unique nature, is anticipated to result in a substantial increase in out-of-state tourism, that generates a significant portion of the sales tax revenue by transactions with nonresidents of the state and is unlikely to occur without an RTA award. The final year of selecting new recipients to the program is 2014/2015, although OEDIT and the EDC will have an ongoing monitoring role with the program for the next 30+ years.

Venture Capital Authority (VCA): The VCA is a venture capital funding program designed to fill a gap in private capital markets and provide seed and early stage capital investments in Colorado companies with the potential for rapidly scaling their businesses. The managing partner, HCV, has the final decision making authority as to whether to invest in such business.

Updated 1/5/15

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