New Business Facility Credits
How to Qualify as a New
Business Facility. If a business
is in the Enterprise Zone, there are three ways it
may qualify as a New Business Facility (NBF):
- NEW
- Be a newly acquired, constructed, or leased
facility used by the taxpayer to operate a
revenue-producing enterprise.
- EXPANSION
- Expand an existing Enterprise Zone facility
by new investment (at least $1 million or
at least double the taxpayer's investment
in the original facility), or by an increase
in employment (increase employment at the
existing facility by 10 or more employees
or by an increase of 10 percent over the base
employment).
- REPLACEMENT
- Qualify as a replacement facility - a Colorado
company relocating to the Enterprise Zone
that was operated for three or more full tax
years of the five years preceding the opening
of the new facility, and investment in the
new facility exceeds $3 million or is at least
300% of the taxpayer's investment in the old
facility.
Jobs Tax Credit. Businesses
hiring new employees in connection with a New Business
Facility located in the Enterprise Zone may claim
a credit against Colorado income taxes of $500 for
each new employee. Qualifying new business facilities
may claim the jobs tax credit each year during the
life of the Enterprise Zone for each new employee
above the base number employed in the prior tax year.
This credit should be calculated by using the monthly
average of employee. Compare to last year's monthly
average. Take $500 per increased employees. If it
was a partial tax year, the credit is $41.67 per month
per increased employee.
 To
see an example on how to calculate the jobs tax credit,
try this link.
Agricultural Processing Jobs
Tax Credit. An additional credit of $500
per new business facility employee may be claimed
by businesses that add value to agricultural commodities
through manufacturing or processing. Qualifying
new business facilities may claim the agricultural
processing tax credit each year during the life of
the Enterprise Zone. This credit is calculated the
same as the Jobs Tax Credit, explained above.
Employer-Sponsored Health Insurance
Credit. An Enterprise Zone taxpayer
who qualifies for the NBF jobs credit can also qualify
for a two-year credit of $200 (or $400 total) for
each NBF employee who is insured under a health insurance
plan or program provided through the employer. The
employer must contribute 50% or more of the total
cost of the plan. The taxpayer may only claim
this credit for the first two full income tax years
after the facility initially qualifies as a NBF.
Local Government Tax Incentives. Any
city or county within an Enterprise Zone is authorized
to negotiate a personal property tax credit with taxpayers
who have qualifying New Business Facilities. These
incentives are negotiated directly with the local
governments through their economic development staff.
|
