Support and Resources for Colorado Springs Investment
There are a variety of available local and state incentive, tax credit and training programs designed to promote economic growth in the region for businesses relocating or expanding in Colorado Springs. Several incentives have been built into the tax codes of state and local taxing authorities. Examples include: no state or county sales tax on manufacturing equipment; no inventory tax and others. The Colorado Springs Chamber and EDC acts as a resource throughout the incentives process and will assist in compiling private and public incentive packages for eligible projects. Please review the available programs below or review our Menu of Incentives to see full program details and requirements.
New and expanding businesses in the Colorado Springs region may be eligible for one or more state-sponsored incentive programs designed to drive business growth in key operations and locations. Learn more about these programs here.
Aviation Development Zone Tax Credit
This program is a calendar year performance-based job creation incentive. The Colorado Springs Airport is a recognized Aviation Development Zone (ADZ) through the Colorado Office of Economic Development and International Trade. A business or any portion of a business that is involved in aircraft manufacturing or maintenance and repair, completion or modification of aircraft located within the boundaries of an ADZ may qualify for a state income tax credit of $1,200 per net 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 taxes paid in the preceding year on equipment and supplies purchased to conduct biotechnology research and development. Qualified taxpayers may seek a refund every year for all Colorado sales and use taxes they paid on purchases of tangible personal property used directly and predominately in research and development of biotechnology.
Job Growth Incentive Tax Credit Program This program is a performance-based job creation incentive program which provides a state income tax credit to businesses undertaking job creation projects that would not occur in Colorado without this program and have met certain requirements.
Strategic Fund Incentive The Strategic Fund is a cash incentive program for businesses that create and maintain permanent net new jobs and meet certain requirements. The incentive is based on the average wage rate of the new jobs and requires a local matching commitment.
City and County Personal Property Tax Credits As a benefit to the region’s businesses, El Paso County no longer collects their portion of the business personal property tax. The mill levy and tax amount appear on the company’s annual tax statement, accompanies by a corresponding credit. El Paso County is the only Colorado County that does not collect a business personal property tax. The city of Colorado Springs began phasing out its portion of the business personal property tax collection in 2016 with full elimination of the tax by 2018.
Colorado Sales and Use Tax Exemption on Aircraft and Aircraft Parts Aircraft used in interstate commerce by a commercial airline and parts permanently affixed to aircraft are exempt from state sales and use tax.
Commercial Aeronautical Zone The Colorado Springs Airport is located within a regionally created Commercial Aeronautical Zone (CAZ), which recognizes significant tax incentives for aeronautical businesses. All local sales and use taxes are abated for companies located within the CAZ and specifically engaged in a variety of aeronautical activities.
Sales Tax Exemptions Each business assisted will be analyzed to determine the tax issues that are important and a presentation of available incentives will be provided including City of Colorado Springs Sales and Use Tax Rebates.
Other Incentives These additional resources for investors and employers in the Colorado Springs region provide additional support through financing and plan assistance. See full details about these programs here.
Private Activity Bonds Private Activity Bonds (PABs) are a type of tax-exempt financing for borrowers investing in qualified projects. PABs can provide significant savings over conventional financing because they are offered at a lower interest rate. A bond is repaid from the revenues of the entity on whose behalf the City has issued the bonds. Thus, the City assumes no financial risk since PABs do not constitute a debt for the City of Colorado Springs.
Rapid Response Team The City of Colorado Springs created a Rapid Response Team program that provides expedited development plan review and permitting to qualifying primary employers. The Rapid Response Team provides a connection between all the necessary reviewing agencies, the company representatives and their contractor. This helps to reduce the permitting and review time by about half the typical processing time — all to help companies save time and money. The team often suggests approaches to reduce the time involved in project approval and construction, including reasonably accelerating planning approvals.
Colorado Springs Utilities is a municipally owned four service utility providing electricity, natural gas, water and wastewater services to business and residential customers in the Colorado Springs region. For economic development benefit, Colorado Springs Utilities has the ability to enter into exclusive contractual agreements with commercial customers. More information is available on their website.
Pikes Peak Enterprise Zone
The Colorado Enterprise Zone program is designed to promote job creation, business growth and development opportunities in areas of the state targeted for economic stimulation. Businesses locating within the Pikes Peak Enterprise Zone may be eligible for one or several of the below Colorado Business Income Tax Credits related to hiring new employees, making investments in equipment, training employees or conducting research and development activities. See full descriptions of these programs here.
Investment Tax Credit Businesses making investments in equipment used exclusively in an Enterprise Zone for at least one year may claim a credit against their Colorado income taxes equal to three percent of the investment amount, subject to limitations on the amount that can be claimed in any one year. In general, only equipment purchases qualify for the investment tax credit.
Jobs Tax Credit Businesses hiring new employees/creating jobs in an Enterprise Zone may claim a state income tax credit of $1,100 for each new job created above the maximum number employed in the prior tax year.
Job Training Credit Employers located in an Enterprise Zone are allowed to claim a credit of 12 percent of their eligible training investment in a qualified job training program, defined as a structured training or basic education program conducted on site or off site by the taxpayer or another entity to improve the job skills of employees who are employed by the taxpayer. These employees must be working predominately within the Enterprise Zone.
Employer-Sponsored Health Insurance Credit For the first two full income tax years that a business operates in an Enterprise Zone, the taxpayer can qualify for a two-year credit of $1,000 (or $2,000 total) for each employee who is insured under a health insurance plan or program provided through the employer. The employer must contribute 50 percent or more of the total cost of the plan.
Manufacturing and Mining Equipment Exemption Purchases of manufacturing machinery or machine tools and parts thereof are exempt from state sales and use tax (3 percent) when the machinery is to be used in manufacturing. Those purchases are also exempt from El Paso County’s sales and use tax (1.23 percent). For businesses in an Enterprise Zone, this exemption is further expanded to include the purchase of machinery and machine tools used in certain mining or oil and gas operations and to the purchase of materials for the construction of machinery and machine tools, as long as the machinery is used exclusively in the Enterprise Zone.
Credit for Rehabilitation of Vacant Buildings There is a credit of 25 percent of rehabilitation costs up to a maximum credit of $50,000 to rehabilitate buildings that are at least 20-years-old and which have been completely vacant for at least two years. Qualified expenditures include exterior, structural, mechanical, and electrical improvements.
Research & Development Tax Credit Eligible businesses involved in private expenditures on research and development activities in the Enterprise Zone qualify for an income tax credit of 3 percent of the amount of increase in the taxpayer’s R&D expenditures above the previous two tax years.
Training programs aid in providing training assistance, education and funding for eligible employers and prospective personnel in the Colorado Springs region. Learn more about these programs here.
Pikes Peak Workforce Center Training Dollars Companies moving to Colorado Springs may be eligible for training dollars to hire and train new, local employees. The Pikes Peak Workforce Center (PPWFC) is federally funded to provide training opportunities for laid-off workers and other eligible individuals looking for work in demand occupations and industries.
On-the-Job Training (OJT) – OJT contracts may be developed on an individual basis or for several workers. PPWFC may reimburse up to 75 percent of the wages of eligible, newly-hired employees for a limited training period.
Customized Training — This training is for eligible individuals who are not yet employees of the company. Training for the specific skill sets required by the company is developed by the company or another training entity, such as a community college.
In addition to OJT and customized training, PPWFC works with other, industry specific grants, aimed at training and education within demand occupations, as funds are available to the region. To assist new and relocating companies, PPWFC is able to host, at no-cost, large-scale hiring and screening events.
Colorado FIRST and Existing Industry Job Training Programs Colorado FIRST grants of up to $1,200 per new employee may be provided for new employees of eligible companies through funding from the State of Colorado. Pikes Peak Community College is the lead local agency for delivery of training funded under Colorado FIRST.
The State of Colorado provides a credit of 10 percent of employer investment in a qualified school-to-work program.
Existing Industry grants of up to $1,000 per full time employee may be provided to assist established Colorado Companies provide new training for existing employees.
Small Business Support
These loan programs are designed specifically to provide resources and assistance to eligible businesses and projects operating in El Paso County, Colorado. Learn more about these programs here.
El Paso County Revolving Loan Fund The El Paso County Revolving Loan Fund (RLF) is a federally-funded loan pool created by the US Department of Housing and Urban Development (HUD). The funds, Community Development Block Grant (CDBG) monies, are provided by the State of Colorado and administered locally. El Paso County, through its Office of Economic Development, contracts with the Pikes Peak Regional Development Corporation to administer the program for the County.
Pikes Peak Regional Development Corporation (PPRDC)
PPRDC is an SBA Certified Development Company (CDC) that provides the SBA 504 Loan Program to businesses in Colorado. Through the SBA 504 loan program, PPRDC typically arranges funding for up to 40 percent of the eligible project cost, up to a maximum of $5,000,000 or $5,500,000 for manufacturers.
PPRDC also administers the El Paso County Business Loan Fund. Eligible for-profit businesses are located in El Paso County outside of the City limits of Colorado Springs or in designated Enterprise Zones. All for-profit manufacturing companies are eligible. Funds can be used for a variety of needs the small business may have ranging from $25,000 to $200,000.
Colorado Springs Foreign Trade Zone #112 consists of 2,371 acres in four separate areas of the city. A Foreign Trade Zone is a restricted access area located within the United States and Puerto Rico that is considered legally outside the customs territory of the United States. The key benefits in a Foreign Trade Zone are duty deferral, duty reduction and duty avoidance for the transfer, use and storage of imported materials. Import duties are deferred until the materials physically leave the Foreign Trade Zone or reduced if used in a product with a lower duty rate. There is no import duty if the materials, or products in which imported materials are used, are re-exported. Foreign Trade Zones enhance the ability of U.S. firms to compete in the international marketplace.