ARTICLE 30
URBAN AND RURAL ENTERPRISE ZONE ACT

 

 

 

 

 

 

 

39-30-101. Short title.

 

 

 

 

 

 

 

 

 

 

 

This article shall be known and may be cited as the "Urban and Rural Enterprise Zone Act".

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1139, 1, effective July 1.

 

 

 

 

39-30-102. Legislative declaration.

 

 

 

 

 

 

 

 

 

 

 

(1) The general assembly hereby finds and declares:

 

 

 

 

 

 

 

 

 

(a) That the health, safety, and welfare of the people of this state are dependent upon the continued encouragement, development, and expansion of opportunities for employment in the private sector in this state;

 

 

 

 

 

 

 

 

 

(b) That there currently exist in this state both rural and urban areas which require new employment opportunities to overcome conditions of unemployment, underemployment, net out-migration of the population, chronic economic distress, deterioration of main street business districts, or sudden and severe economic dislocations and that such conditions may well exist, from time to time, in other areas of the state; and

 

 

 

 

 

 

 

 

 

(c) That some rural counties in this state continue to have difficulty in promoting economic growth despite the existence of enterprise zones and their associated tax credits.

 

 

 

 

 

 

 

 

 

(2) It is, therefore, declared to be the policy of the state, in order to provide incentives for private enterprise to expand and for new businesses to locate in such economically depressed areas and to provide more job opportunities for residents of such areas, to establish a pilot program for tax incentives and other assistance for enterprises in designated areas to be known as enterprise zones.

 

 

 

 

 

 

 

 

 

(3) (a) It is the intent of the general assembly that state agencies, including but not limited to the division of local government in the department of local affairs, the department of labor and employment, the department of revenue, the state board for community colleges and occupational education in the department of higher education, and the Colorado office of economic development created in the office of the governor, place special emphasis on providing assistance to designated enterprise zones.

 

 

 

 

 

 

 

 

 

(b) It is further declared to be the intent of the general assembly that areas so designated also be eligible to apply for designation under federal enterprise zone legislation that may be enacted.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1139, 1, effective July 1. L. 97: (3)(a) amended, p. 527, 11, effective July 1. L. 2002: (1)(c) added, p. 1103, 1, effective August 7. L. 2008: (3)(a) amended, p. 216, 1, effective March 26.

 

 

 

 

 

 

39-30-103. Zones established - termination.

 

 

 

 

 

 

 

 

 

 

 

(1) Any municipality, county, or group of contiguous municipalities or counties may propose an area of such municipality, county, or group of municipalities or counties to be designated as an enterprise zone if the area has a population of no more than eighty thousand persons, or one hundred thousand persons if the area is a rural area, and meets at least one of the following additional criteria:

 

 

 

 

 

 

 

 

 

(a) An unemployment rate at least twenty-five percent above the state average for the most recent period of twelve consecutive months for which data is available from the department of labor and employment;

 

 

 

 

 

 

 

 

 

(b) A population growth rate less than twenty-five percent of the state average rate for the most recent five-year period for which data are available from the United States census bureau or the department of local affairs, or, if such data is not available for any five-year period, for the most recent period of not less than five nor more than ten years for which such data is available; or

 

 

 

 

 

 

 

 

 

(c) A per capita income less than seventy-five percent of the state average for the most recent period for which data is available from the United States census bureau or the department of local affairs.

 

 

 

 

 

 

 

 

 

(1.5) As used in this section, "rural area" means:

 

 

 

 

 

 

 

 

 

(a) A county with a population of less than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census;

 

 

 

 

 

 

 

 

 

(b) A municipality with a population of less than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census, that is located ten miles or more from a municipality with a population of more than fifty thousand people; or

 

 

 

 

 

 

 

 

 

(c) The unincorporated part of a county located ten miles or more from a municipality with a population of more than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census.

 

 

 

 

 

 

 

 

 

(2) The director of the Colorado office of economic development shall determine whether an area meets the criteria specified in subsection (1) of this section based on the most recent statistics available. All decisions concerning the designation or termination of an enterprise zone or any portion of an enterprise zone shall be made by the Colorado economic development commission created in section 24-46-102, C.R.S., upon the recommendations of the director of the Colorado office of economic development.

 

 

 

 

 

 

 

 

 

(3) In proposing an area for designation as an enterprise zone, the local government shall submit to the director of the Colorado office of economic development a development plan. This plan shall include information describing the following items:

 

 

 

 

 

 

 

 

 

(a) The boundaries of the proposed zone;

 

 

 

 

 

 

 

 

 

(b) The proposed zone's potential for business development and job creation;

 

 

 

 

 

 

 

 

 

(c) How the proposed zone will support and be consistent with maintenance of an economically viable central business district;

 

 

 

 

 

 

 

 

 

(d) The specific economic development objectives, to be achieved in the zone, including specific objectives that have measurable outcomes, and the measures that local government and the private sector will undertake to support those objectives;

 

 

 

 

 

 

 

 

 

(e) The person or agency to be designated as administrator of the proposed zone;

 

 

 

 

 

 

 

 

 

(e.5) How the specific economic development objectives of the zone that have measurable outcomes will be measured and the specific, verifiable data that will be used to measure such outcomes;

 

 

 

 

 

 

 

 

 

(f) Any other pertinent information the director of the Colorado office of economic development or the Colorado economic development commission may require.

 

 

 

 

 

 

 

 

 

(4) (a) The Colorado economic development commission, after consultation with the executive directors of the department of labor and employment and the department of revenue, may approve the designation of not more than sixteen areas as enterprise zones. The commission shall designate administrative entities for enterprise zones.

 

 

 

 

 

 

 

 

 

(b) For any area designated as an enterprise zone or as a portion of an enterprise zone prior to July 1, 1999, the Colorado economic development commission shall work with the zone administrator to ensure that the area has specific economic development objectives with outcomes that can be measured with specific, verifiable data. The director of the Colorado office of economic development shall require the zone administrators for each zone to submit annual documentation of efforts to improve conditions in areas designated as enterprise zones and the results of those efforts. Such annual documentation shall include specific, verifiable data that can be used to measure whether the zone has achieved the specific economic development objectives for the zone that have measurable outcomes. In order for the commission to determine if the enterprise zones or portions thereof are achieving the specific economic development objectives submitted pursuant to this paragraph (b) or to paragraph (d) of subsection (3) of this section, such annual documentation shall include, but need not be limited to, the most recent statistics available for companies claiming enterprise zone tax credits on:

 

 

 

 

 

 

 

 

 

(I) The number of jobs created in the enterprise zone and the standard industrial classification code (SIC) of each company reporting the creation of jobs within the zone;

 

 

 

 

 

 

 

 

 

(II) The number of jobs retained in the zone;

 

 

 

 

 

 

 

 

 

(III) The average annual compensation level, including benefits, of the jobs created or retained within the zone, categorized by full time permanent, part time, temporary, and contract jobs;

 

 

 

 

 

 

 

 

 

(IV) (Deleted by amendment, L. 99, p. 725, 2, effective May 20, 1999.)

 

 

 

 

 

 

 

 

 

(V) The number of employees from outside the zone transferred to a facility within the zone;

 

 

 

 

 

 

 

 

 

(VI) (Deleted by amendment, L. 99, p. 725, 2, effective May 20, 1999.)

 

 

 

 

 

 

 

 

 

(VII) An analysis of capital investment in the enterprise zone, including:

 

 

 

 

 

 

 

 

 

(A) The number and amount of qualified rehabilitation expenses made on rehabilitated vacant buildings;

 

 

 

 

 

 

 

 

 

(B) The amount of investment in qualifying property for which tax credits were claimed pursuant to section 39-30-104;

 

 

 

 

 

 

 

 

 

(VIII) The number of employees trained and the amount of investment in job training programs pursuant to section 39-30-104 (4);

 

 

 

 

 

 

 

 

 

(IX) The number of employees employed in new or expanded business facilities for which a credit is claimed pursuant to section 39-30-105;

 

 

 

 

 

 

 

 

 

(X) The amount of investment tax credits claimed pursuant to section 39-30-104 and the amount of credits claimed for new business facility employees pursuant to section 39-30-105;

 

 

 

 

 

 

 

 

 

(XI) Any other information reasonably required by the zone administrator, the director of the Colorado office of economic development, or the Colorado economic development commission to evaluate the effectiveness of each zone in accomplishing the specific measurable objectives of the zone.

 

 

 

 

 

 

 

 

 

(b.5) In addition to the annual documentation required pursuant to paragraph (b) of this subsection (4), the director of the Colorado office of economic development shall require the zone administrators for each enterprise zone to submit, to the extent practicable, annual documentation on the most recent statistics available on:

 

 

 

 

 

 

 

 

 

(I) Any change in the unemployment rate in the zone;

 

 

 

 

 

 

 

 

 

(II) Any change in per capita income in the zone;

 

 

 

 

 

 

 

 

 

(III) Any change in population in the zone;

 

 

 

 

 

 

 

 

 

(IV) The amount of all monetary or in-kind contributions for the purpose of implementing the economic development plan for the zone and the specific purpose of the contributions as provided in section 39-30-103.5.

 

 

 

 

 

 

 

 

 

(b.7) The director of the Colorado office of economic development on behalf of the Colorado economic development commission shall submit an annual report to the general assembly summarizing the annual documentation submitted by zone administrators to the director of the Colorado office of economic development each year pursuant to paragraphs (b) and (b.5) of this subsection (4). The director of the Colorado office of economic development, on behalf of the commission, shall make an annual presentation to the legislative audit committee that reviews and summarizes the information in the report submitted to the general assembly pursuant to this paragraph (b.7).

 

 

 

 

 

 

 

 

 

(c) (I) (Deleted by amendment, L. 2004, p. 364, 1, effective August 4, 2004.)

 

 

 

 

 

 

 

 

 

(II) The state auditor shall submit a report to the governor and the general assembly, at the discretion of the state auditor and the legislative audit committee, evaluating the implementation of the enterprise zone program and its effect on the employment, unemployment rate, investment, overall growth rate, economic diversity, and per capita income in each enterprise zone and enhanced rural enterprise zone or county containing an enterprise zone or enhanced rural enterprise zone, evaluating the effectiveness of each zone in achieving its measurable objectives, making recommendations for statutory changes, if any, and including any other information requested by the governor or the general assembly. The evaluation shall be based upon the data included in the annual reports submitted by the director of the Colorado office of economic development on behalf of the Colorado economic development commission to the general assembly pursuant to paragraph (b.7) of this subsection (4), and objective verifiable data submitted by the zone administrators and maintained by the Colorado office of economic development, local governments, and zone administrators. The report shall also include information concerning the amounts of tax credits claimed and allowed under the program. For purposes of preparing the report required by this paragraph (c), the state auditor shall have access to all records and documents applicable to the program, whether maintained by the Colorado office of economic development, local governments, or enterprise zone administrators.

 

 

 

 

 

 

 

 

 

(c.5) Companies claiming enterprise zone credits shall provide information reasonably required by zone administrators, the director of the Colorado office of economic development, and the Colorado economic development commission to evaluate the effectiveness of each zone in accomplishing the measurable economic development objectives to be achieved in the zone. Such information shall be considered public records as defined in section 24-72-202 (6), C.R.S., shall be preserved for at least five years by the zone administrator who collected the information, who shall be the custodian of such information, and shall be made available by the zone administrator for inspection by any person at reasonable times. Nothing in this paragraph (c.5) shall be construed to require the disclosure to the public of any information that reveals the amount of compensation paid to any individual employee of a company, any Colorado income tax return, or any information regarding expenditures on research and development.

 

 

 

 

 

 

 

 

 

(d) Repealed.

 

 

 

 

 

 

 

 

 

(e) (Deleted by amendment, L. 2008, p. 216, 2, effective March 26, 2008.)

 

 

 

 

 

 

 

 

 

(5) No later than March 1, 1997, the Colorado economic development commission created in section 24-46-102, C.R.S., shall report to the governor and the general assembly the results of a competitive benchmarking study, performed by a private consultant with experience in evaluation of state business assistance programs in multiple states, comparing Colorado's business climate, as it affects the retention and growth of basic employers and their investment, with the business climate of other states. In addition, the study shall assess long term economic development strategies, including but not limited to encouraging primary job creation throughout Colorado. Along with the report, the commission shall provide the governor and the general assembly its recommendations for additional study or modifications to Colorado's public policy concerning the state's business climate and its recommendations concerning specific business development and job creation objectives that should be used as minimum requirements or standards for future designation of enterprise zones or portions of enterprise zones consistent with statewide economic development targets and objectives.

 

 

 

 

 

 

 

 

 

(6) (a) When the termination of an enterprise zone or portion of an enterprise zone would prevent a taxpayer from qualifying for tax benefits under this article and the taxpayer can identify job creation or capital expansion activities that were planned prior to the termination announcement and that would have otherwise entitled the taxpayer to claim tax benefits under section 39-30-103.5, 39-30-104, or 39-30-105, the enterprise zone administrator and the taxpayer shall jointly certify detailed information about such planned activities. A taxpayer who files such certification with the taxpayer's state income tax return may claim tax benefits otherwise actually earned up to the limits of such certified information for a period not to exceed the ten tax years following the year in which the enterprise zone or portion of an enterprise zone was terminated. It is the intent of this subsection (6) only to permit taxpayers to claim tax benefits on which they demonstrably relied in making business planning decisions, and, except as specifically provided in this subsection (6), nothing in this subsection (6) shall be construed to authorize the commission or any enterprise zone administrator to grant tax benefits that have been repealed by the general assembly or to grant tax benefits in excess of the limits established by law.

 

 

 

 

 

 

 

 

 

(b) Notwithstanding any date restriction set forth in its text, any certification that was prepared pursuant to paragraph (a) of this subsection (6) prior to June 3, 2002, that extends the right of a taxpayer to claim tax benefits for the maximum period that was allowed by law at the time the certification was prepared, and that allows the taxpayer to claim tax benefits for one or more income tax years that end on or after June 3, 2002, shall extend the right of the taxpayer to claim tax benefits for the maximum period specified in paragraph (a) of this subsection (6).

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1140, 1, effective July 1. L. 87: (4) amended, p. 1470, 1, effective May 28. L. 89: (3)(e) R&RE, (3)(f) added, and (4) amended, p. 1521, 2-4, effective June 7. L. 90: (1)(b), (2), and (4) amended, p. 1752, 1, effective May 24. L. 96: IP(1), (3)(d), and (4) amended, and (5) and (6) added, p. 1121, 1, effective July 1. L. 97: (4)(b)(VIII) amended, p. 1397, 3, effective June 3. L. 99: (3)(d), (4)(b), (4)(c), (4)(d)(I), and (6) amended and (3)(e.5), (4)(b.5), (4)(b.7), and (4)(c.5) added, p. 725, 1, 2, effective May 20. L. 2000: (4)(e) amended, p. 1680, 8, effective July 1. L. 2002: (4)(d) repealed and (6) amended, pp. 1121, 1122, 5, 6, effective June 3; IP(1), (4)(c)(II), (4)(c.5), and (6) amended and (1.5) added, p. 1103, 2, effective August 7. L. 2004: (4)(b.7) and (4)(c) amended, p. 364, 1, effective August 4. L. 2008: (2), IP(3), (3)(f), (4)(a), IP(4)(b), (4)(b)(XI), IP(4)(b.5), (4)(b.7), (4)(c)(II), (4)(c.5), and (4)(e) amended, p. 216, 2, effective March 26; (4)(c)(II) amended, p. 115, 1, effective August 5.

 

 

 

 

 

 

 

 

 

 

 

Editor's note: (1) Amendments to subsection (6) by House Bill 02-1161 and House Bill 02-1399 were harmonized.

 

 

 

 

 

 

 

 

 

(2) Amendments to subsection (4)(c)(II) by Senate Bill 08-107 and House Bill 08-1305 were harmonized.

 

 

 

 

 

 

 

 

39-30-103.2. Enhanced rural enterprise zones - criteria - termination.

 

 

 

 

 

 

 

 

 

 

 

(1) The portion of any county within an enterprise zone designated pursuant to section 39-30-103 shall be designated as an enhanced rural enterprise zone if the county that contains the area to be so designated meets two or more of the following criteria:

 

 

 

 

 

 

 

 

 

(a) The county has an unemployment rate at least fifty percent above the state average unemployment rate for the most recent period of twelve consecutive months for which data are available from the department of labor and employment;

 

 

 

 

 

 

 

 

 

(b) The county has a population growth rate less than twenty-five percent of the state average population growth rate for the most recent five-year period for which data are available from the United States census bureau or the department of local affairs, or if such data are not available for any five-year period, for the most recent period of not less than five nor more than ten years for which such data are available;

 

 

 

 

 

 

 

 

 

(c) The average per capita income in the county is less than seventy-five percent of the state average per capita income for the most recent period for which data are available from the United States census bureau or the department of local affairs;

 

 

 

 

 

 

 

 

 

(d) The total assessed value of all nonresidential property within the county ranks in the lower one-half of all counties based on the total value of nonresidential property for the most recent year for which such data are available from the department of local affairs;

 

 

 

 

 

 

 

 

 

(e) The county has a population of five thousand or less as estimated by the department of local affairs.

 

 

 

 

 

 

 

 

 

(2) By December 1, 2002, and every two years thereafter, the director of the Colorado office of economic development shall determine whether each county meets two or more of the criteria specified in subsection (1) of this section. Such determination shall be based on the most recent statistics available. The director of the Colorado office of economic development shall provide to each enterprise zone administrator and to the board of county commissioners of each eligible county a list of the counties that meet two or more of the criteria specified in subsection (1) of this section.

 

 

 

 

 

 

 

 

 

(3) If a county containing a previously designated enhanced rural enterprise zone does not appear on the biennial list of eligible counties provided by the director of the Colorado office of economic development, the enterprise zone within such county shall be terminated as an enhanced rural enterprise zone as of January 1 following the issuance of such list. If the county appears again on a subsequent list of eligible counties, the portion of the county within an enterprise zone shall be designated as an enhanced rural enterprise zone.

 

 

 

 

 

 

 

 

 

(4) The termination of an enhanced rural enterprise zone shall not restrict, curtail, terminate, or otherwise cut off any tax credits that were earned by any taxpayer based on transactions completed while a county was designated as an enhanced rural enterprise zone. In addition, the director of the Colorado office of economic development shall establish procedures for recognizing and allowing credits to taxpayers who have taken actions in reliance on agreements reached with enhanced rural enterprise zone administrators or local governments for long-term investments.

 

 

 

 

 

 

 

 

 

(5) If the termination of an enhanced rural enterprise zone would prevent a taxpayer from qualifying for tax benefits under this article and the taxpayer can identify job creation or capital expansion activities that were planned before the director of the Colorado office of economic development issued the list of eligible counties and that would have otherwise entitled the taxpayer to claim tax benefits under section 39-30-105, the enterprise zone administrator and the taxpayer shall jointly certify detailed information about such planned activities. A taxpayer who files such certification with the taxpayer's state income tax return may claim tax benefits otherwise actually earned up to the limits of such certified information for a period not to exceed the five tax years following the year in which the enhanced rural enterprise zone was terminated. It is the intent of this subsection (5) to permit taxpayers to claim only those tax benefits on which they demonstrably relied in making business planning decisions, and, except as specifically provided in this subsection (5), nothing in this subsection (5) shall be construed to authorize any enterprise zone administrator to grant tax benefits that have been repealed by law or to grant tax benefits in excess of the limits established by law.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 2002: Entire section added, p. 1105, 3, effective August 7. L. 2008: (2), (3), (4), and (5) amended, p. 219, 3, effective March 26.

 

 

 

 

 

 

39-30-103.5. Credit against tax - contributions to enterprise zone administrators to implement economic development plans.

 

 

 

 

 

 

 

 

 

 

 

(1) (a) (I) Except as otherwise provided in subparagraph (II) of this paragraph (a), for income tax years commencing on or after January 1, 1989, any taxpayer who makes a monetary or in-kind contribution for the purpose of implementing the economic development plan for the enterprise zone to the person or agency designated as the enterprise zone administrator by the department of local affairs, and on or after July 1, 2008, by the person or agency designated as the enterprise zone administrator by the Colorado economic development commission, shall be allowed a credit against the income tax imposed by article 22 of this title in an amount equal to fifty percent of the total value of the contribution as certified by the enterprise zone administrator.

 

 

 

 

 

 

 

 

 

(II) For income tax years commencing on or after January 1, 1996, the amount of the credit allowed for contributions made pursuant to this paragraph (a) shall be twenty-five percent of the total value of the contribution as certified by the enterprise zone administrator; except that nothing in this subparagraph (II) shall be construed to affect the amount of the credit:

 

 

 

 

 

 

 

 

 

(A) For contributions made prior to July 1, 1997: To an enterprise zone administrator for a project, program, or organization that was originally approved by an enterprise zone administrator in writing prior to May 1, 1996; or directly to a project, program, or organization that was originally approved by an enterprise zone administrator prior to May 1, 1996, and that is certified by the enterprise zone administrator pursuant to subsection (5) of this section; or

 

 

 

 

 

 

 

 

 

(B) For contributions made on or after July 1, 1997, through December 31, 2000, pursuant to a written agreement executed prior to July 1, 1997, between a taxpayer and an enterprise zone administrator in which the taxpayer pledges to make future contributions to a project, program, or organization that was approved by the enterprise zone administrator pursuant to this section prior to May 1, 1996.

 

 

 

 

 

 

 

 

 

(b) The credit allowed by paragraph (a) of this subsection (1) shall not exceed one hundred thousand dollars or the total amount of the income tax imposed on the taxpayer's income by article 22 of this title for the tax year for which the credit is claimed, whichever is less. In-kind contributions shall not exceed fifty percent of the total credit claimed.

 

 

 

 

 

 

 

 

 

(c) Upon request, the enterprise zone administrator, acting on behalf of the department of revenue, shall provide the taxpayer with a form to be filed with the department of revenue for the purpose of claiming the credit allowed by this section which shall be accompanied by a copy of the certification of the value and purpose of the contribution furnished to the taxpayer by the enterprise zone administrator.

 

 

 

 

 

 

 

 

 

(d) If the amount of the credit allowed pursuant to the provisions of this section exceeds the amount of income taxes otherwise due on the income of the taxpayer in the income tax year for which the credit is being claimed, the amount of the credit not used as an offset against income taxes in said income tax year may be carried forward as a credit against subsequent years' income tax liability for a period not exceeding five years and shall be applied first to the earliest income tax years possible. Any credit remaining after said period shall not be refunded or credited to the taxpayer.

 

 

 

 

 

 

 

 

 

(e) On or before November 1, 2000, and November 1 of each year thereafter, each zone administrator shall provide to the director of the Colorado office of economic development on behalf of the Colorado economic development commission a list of all programs, projects, and organizations to which taxpayers may contribute during the next calendar year for the purpose of implementing the economic development plan of the zone and receiving a tax credit pursuant to this section. The list shall be accompanied by a description of each program, project, or organization, including the purpose and relationship of the program, project, or organization to the economic development goals of the enterprise zone, the expected benefits of the program, project, or organization to the enterprise zone, and an estimate of the amount of potential contributions to the program, project, or organization during the next calendar year. Any modifications to a list, including programs, projects, or organizations that are to be added thereto, shall be submitted to the director of the office of economic development on behalf of the commission by the zone administrator no later than thirty days after the modification is made. Commencing July 1, 1999, the commission is authorized to hold hearings and review any new program, project, or organization included on a list that is submitted to the director of the Colorado office of economic development on behalf of the commission pursuant to this section, any modification to a list, and any other program, project, or organization that the commission determines has changed materially. A list or modification of a list that is submitted to the director of the Colorado office of economic development on behalf of the commission pursuant to this section shall not be considered final until thirty days after the commission has received such information. The commission shall approve any program, project, or organization that it determines is eligible under the requirements of this section or is essential to the mission of the enterprise zone upon a majority vote of the members of the commission present at a meeting at which such approval is considered. The director of the Colorado office of economic development on behalf of the commission shall notify the zone administrator of any program, project, or organization that is not approved within thirty days of receipt of the list or modification of the list. Any program, project, or organization not approved by the commission may request that the commission reconsider its decision within thirty days after the date the notice indicating that the program, project, or organization was not approved was provided to the zone administrator. A zone administrator may accept contributions for any program, project, or organization it has submitted pursuant to this paragraph (e).

 

 

 

 

 

 

 

 

 

(2) (a) For income tax years commencing prior to January 1, 1999, monetary or in-kind contributions to promote child care in enterprise zones shall be deemed to be for the purpose of implementing the economic development plan for the enterprise zone and shall include but shall not be limited to the following types of contributions:

 

 

 

 

 

 

 

 

 

(I) Donating money, real estate, or property to the enterprise zone for the establishment of a child care facility;

 

 

 

 

 

 

 

 

 

(II) Donating money to the enterprise zone to establish a grant or loan program for a parent or parents requiring financial assistance for child care;

 

 

 

 

 

 

 

 

 

(III) Pooling moneys of several businesses and donating such moneys to the enterprise zone for the establishment of a child care facility;

 

 

 

 

 

 

 

 

 

(IV) Donating money to the enterprise zone for the training of child care providers; and

 

 

 

 

 

 

 

 

 

(V) Donating money, services, or equipment to the enterprise zone for the establishment of an information dissemination program to provide information and referral services to assist a parent or parents in obtaining child care.

 

 

 

 

 

 

 

 

 

(b) Notwithstanding any other provision to the contrary, nothing in this subsection (2) shall be construed to limit the ability of a taxpayer to claim a credit under this subsection (2) for contributions made on or after January 1, 1999, pursuant to the terms of an agreement entered into prior to such date between the taxpayer and an enterprise zone administrator.

 

 

 

 

 

 

 

 

 

(3) (a) Monetary or in-kind contributions to promote temporary, emergency, or transitional housing programs for the homeless that offer or provide referrals to child care, job placement, and counseling services for the purpose of promoting employment for homeless persons in enterprise zones shall be deemed to be for the purpose of implementing the economic development plan for the enterprise zone and shall include but not be limited to the following types of contributions:

 

 

 

 

 

 

 

 

 

(I) Donating money, real estate, or property to the enterprise zone for the establishment of temporary, emergency, or transitional housing for the homeless to include child care and job placement services;

 

 

 

 

 

 

 

 

 

(II) Donating money to the enterprise zone to establish a grant or loan program for homeless individuals requiring financial assistance for temporary, emergency, or transitional housing or child care;

 

 

 

 

 

 

 

 

 

(III) Pooling moneys of several businesses and donating those moneys to the enterprise zone for the establishment of temporary, emergency, or transitional housing programs for the homeless that offer or provide referrals to child care, job placement, and counseling services for the purpose of promoting employment for homeless persons;

 

 

 

 

 

 

 

 

 

(IV) Donating money to the enterprise zone for the training of homeless individuals to obtain employment; and

 

 

 

 

 

 

 

 

 

(V) Donating money, services, or equipment to the enterprise zone for the establishment of an information dissemination program to provide information and referral services to assist a homeless individual in obtaining temporary, emergency, or transitional housing, child care, or employment.

 

 

 

 

 

 

 

 

 

(b) Repealed.

 

 

 

 

 

 

 

 

 

(3.5) For income tax years commencing on and after January 1, 2003, monetary or in-kind contributions to promote nonprofit or government-funded community development projects in enterprise zones shall be deemed to be for the purpose of implementing the economic development plan for the enterprise zone.

 

 

 

 

 

 

 

 

 

(4) In no event shall credits be allowed pursuant to this section for contributions that directly benefit the contributor or that are not directly related to job creation, job preservation, or other purposes specified in subsections (2), (3), and (3.5) of this section.

 

 

 

 

 

 

 

 

 

(5) (a) Contributions pursuant to this section may be made directly to programs, projects, or organizations certified by the enterprise zone administrator. The enterprise zone administrator shall only certify programs, projects, or organizations that meet the criteria set forth in this section for the purpose of receiving direct contributions.

 

 

 

 

 

 

 

 

 

(b) Each program, project, and organization certified by the enterprise zone administrator pursuant to this subsection (5) shall submit a report at least once per year, or more often if required by the enterprise zone administrator, indicating the total value of contributions received for which tax credits would be allowed pursuant to this section and the source of the contribution.

 

 

 

 

 

 

 

 

 

(6) No later than ninety days after making a certification of value pursuant to subsection (1) of this section, the enterprise zone administrator making the certification shall report to the director of the Colorado office of economic development on behalf of the Colorado economic development commission the total value of the contribution as certified by the administrator, the source of the contribution, the purpose of the contribution, and the relationship of the stated purpose of the contribution to the enterprise zone's goals or job creation objectives.

 

 

 

 

 

 

 

 

 

(7) The director of the Colorado office of economic development on behalf of the Colorado economic development commission or the enterprise zone administrator may release information concerning the source and amount of contributions made pursuant to this section, as well as the amount of the credits allowed pursuant to this section.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 89: Entire section added, p. 1519, 1, effective June 7. L. 90: (2) added, p. 1399, 14, effective May 24. L. 94: (3) added, p. 2085, 1, effective July 1. L. 96: (1)(a) and (1)(c) amended and (1)(e), (4), (5), (6), and (7) added, p. 1125, 2, 3, effective July 1. L. 98: (3)(b) repealed, p. 225, 1, effective April 10; (2) amended, p. 1371, 2, effective August 5. L. 99: (1)(e) amended, p. 729, 3, effective May 20. L. 2000: (1)(a)(I), (1)(e), (6), and (7) amended, p. 1680, 9, effective July 1. L. 2002: (3.5) added and (4) amended, p. 1107, 4, effective August 7. L. 2006: (2) amended, p. 1508, 60, effective June 1. L. 2007: (1)(a)(I) amended, p. 343, 1, effective August 3. L. 2008: (1)(a)(I), (1)(e), (6), and (7) amended, p. 220, 4, effective March 26.

 

 

39-30-104. Credit against tax - investment in certain property - repeal.

 

 

 

 

 

 

 

 

 

 

 

(1) (a) In lieu of any credit allowable under section 39-22-507.5, there shall be allowed to any person as a credit against the tax imposed by article 22 of this title, for income tax years commencing on or after January 1, 1986, an amount equal to the total of three percent of the total qualified investment, as determined under section 46 (c) (2) of the federal "Internal Revenue Code of 1986", as amended, in such taxable year in qualified property as defined in section 48 of the internal revenue code to the extent that such investment is in property that is used solely and exclusively in an enterprise zone for at least one year. The references in this subsection (1) to sections 46 (c) (2) and 48 of the internal revenue code mean sections 46 (c) (2) and 48 of the internal revenue code as they existed immediately prior to the enactment of the federal "Revenue Reconciliation Act of 1990".

 

 

 

 

 

 

 

 

 

(b) (I) For income tax years commencing on or after January 1, 2011, but before January 1, 2016, a commercial truck, truck tractor, tractor, or semitrailer with a gross vehicle weight rating of sixteen thousand pounds or greater that is model year 2010 or newer, as well as any parts associated with the vehicle at the time of purchase, shall be deemed to be used solely and exclusively in an enterprise zone if it is licensed and registered within the state and predominantly housed and based at the taxpayer's business trucking facility within an enterprise zone for the twelve-month period following its purchase.

 

 

 

 

 

 

 

 

 

(II) The income tax credit for a qualified investment in a commercial truck, truck tractor, tractor, or semitrailer with a gross vehicle weight rating of sixteen thousand pounds or greater that is model year 2010 or newer, as well as any parts associated with the vehicle at the time of purchase, shall be allowed as follows:

 

 

 

 

 

 

 

 

 

(A) For the income tax year commencing on January 1, 2011, an amount equal to one-half of one percent of the total qualified investment;

 

 

 

 

 

 

 

 

 

(B) For the income tax year commencing on January 1, 2012, an amount equal to one percent of the total qualified investment;

 

 

 

 

 

 

 

 

 

(C) For the income tax year commencing on January 1, 2013, an amount equal to one and one-half percent of the total qualified investment;

 

 

 

 

 

 

 

 

 

(D) For the income tax year commencing on January 1, 2014, an amount equal to two percent of the total qualified investment; and

 

 

 

 

 

 

 

 

 

(E) For the income tax year commencing on January 1, 2015, an amount equal to three percent of the total qualified investment.

 

 

 

 

 

 

 

 

 

(III) For purposes of this paragraph (b), "facility" means any factory, mill, plant, refinery, warehouse, feedlot, building, or complex of buildings located within the state, including the land on which such facility is located and all machinery, equipment, and other real and tangible personal property located at or within such facility and used in connection with the operation of such facility, which facility the taxpayer owns, rents, or leases in the business's name at which continuous and ongoing operational activities of the business are maintained and at which at least one full-time employee of the business is employed.

 

 

 

 

 

 

 

 

 

(IV) This paragraph (b) is repealed, effective January 1, 2017.

 

 

 

 

 

 

 

 

 

(2) The amount of the credit set forth in subsection (1) of this section shall be subject to the limitations of section 39-22-507.5; except that, in computing the limitations on credit pursuant to section 39-22-507.5 (3), a taxpayer's actual tax liability for the income tax year shall not be reduced by the amount of credits allowed by section 39-30-105 and the limit on that portion of a taxpayer's tax liability that exceeds five thousand dollars shall be fifty percent.

 

 

 

 

 

 

 

 

 

(2.5) Notwithstanding the provisions of section 39-22-507.5 (7) (b), any excess credit claimed pursuant to this section shall be an investment tax credit carryover to each of the twelve income tax years following the unused credit year.

 

 

 

 

 

 

 

 

 

(3) (Deleted by amendment, L. 96, p. 1127, 4, effective July 1, 1996.)

 

 

 

 

 

 

 

 

 

(4) (a) In addition to any other credit allowed under this section, for income tax years commencing on or after January 1, 1997, there shall be allowed to any person as a credit against the tax imposed by article 22 of this title an amount equal to ten percent of the total investment made during the taxable year in a qualified job training program.

 

 

 

 

 

 

 

 

 

(b) For purposes of this subsection (4):

 

 

 

 

 

 

 

 

 

(I) "Qualified job training program" means 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 employed by the taxpayer working predominantly within an enterprise zone.

 

 

 

 

 

 

 

 

 

(II) "Total investment" means:

 

 

 

 

 

 

 

 

 

(A) Land, building, real property improvement, leasehold improvement, or space lease costs and the costs of any capital equipment purchased or leased by the taxpayer and used entirely within an enterprise zone primarily for qualified job training program purposes or to make a training site accessible, when such costs are not the subject of a credit under subsection (1) of this section; and

 

 

 

 

 

 

 

 

 

(B) Expenses of a qualified job training program, whether incurred within or outside of an enterprise zone, including expensed equipment, supplies, training staff wages or fees, training contract costs, temporary space rental, travel expenses, and other expense costs of qualified job training programs for employees working predominantly within an enterprise zone.

 

 

 

 

 

 

 

 

 

(5) Repealed.

 

 

 

 

 

 

 

 

 

(6) For credits claimed for income tax years commencing on or after January 1, 1997, no credit shall be allowed pursuant to this section if the investment resulted from the relocation of a business operation from within the state to an enterprise zone, regardless of whether the original location of the operation was within an enterprise zone, except to the extent such relocation meets the criteria for an expansion pursuant to section 39-30-105 (7) (c) (II) and (7) (c) (III).

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1141, 1, effective July 1. L. 87: (3) added, p. 1470, 2, effective May 28. L. 91: (3) amended, p. 1988, 7, effective April 20. L. 92: (2) amended, p. 2220, 3, effective May 29. L. 96: Entire section amended, p. 1127, 4, effective July 1. L. 97: (5) repealed, p. 1396, 2, effective June 3. L. 2007: (6) amended, p. 352, 9, effective August 3. L. 2009: (1) amended, (HB 09-1298), ch. 417, p. 2313, 2, effective (see editor's note).

 

 

 

 

 

 

 

 

 

 

 

Editor's note: Section 7 of chapter 417, Session Laws of Colorado 2009, provides that amendments to subsection (1) shall take effect when the revisor of statutes receives written notice from the executive director of the department of revenue that a sustainable source of revenue has been identified to implement this section. As of the publication date, the revisor of statutes had not received such notice.

 

 

 

 

 

 

39-30-105. Credit for new business facility employees - definitions.

 

 

 

 

 

 

 

 

 

 

 

(1) (a) (I) For any income tax year commencing on or after January 1, 1993, any taxpayer who establishes a new business facility in an enterprise zone shall be allowed a credit against the income tax imposed by article 22 of this title in an amount equal to five hundred dollars per income tax year for each new business facility employee, pursuant to subsection (6) of this section, who is working within the zone, prorated according to the number of months the employee was employed by the taxpayer during the income tax year. An employee whose primary duties consist of operating a commercial motor vehicle with a commercial driver's license shall be deemed to be working one hundred percent within the zone if the employee spends no more than five percent of his or her total time at any facility of the employer other than the facility within the zone.

 

 

 

 

 

 

 

 

 

(II) (Deleted by amendment, L. 2002, p. 1107, 5, effective August 7, 2002.)

 

 

 

 

 

 

 

 

 

(III) For any income tax year commencing on or after January 1, 2003, any taxpayer who establishes a new business facility in an enhanced rural enterprise zone shall be allowed an additional credit against the income tax imposed by article 22 of this title in an amount equal to two thousand dollars per income tax year for each new business facility employee who is working within the enhanced rural enterprise zone, prorated according to the number of months such employee was employed by the taxpayer during the income tax year.

 

 

 

 

 

 

 

 

 

(IV) A new business facility qualifying for credit shall be allowed the credit for each subsequent tax year for each additional new business facility employee in excess of the maximum number employed in any prior tax year. Any credit shall be allowed for a maximum of twelve consecutive months for each new business facility employee employed by the taxpayer.

 

 

 

 

 

 

 

 

 

(b) In addition to the credit available under paragraph (a) of this subsection (1), a taxpayer qualified under said paragraph (a) shall be allowed for the first two full income tax years while located in an enterprise zone a credit in an amount equal to two hundred dollars for each new business facility employee who is insured under a health insurance plan or program provided through his or her employer. To be eligible for such credit, the employer must contribute fifty percent or more of the total cost of a health insurance plan or program, and such plan or program must be in accordance with the provisions of article 8 of title 10 or part 1, 2, 3, or 4 of article 16 of title 10, C.R.S., or be a self-insurance program and include partial or complete coverage for hospital and physician services.

 

 

 

 

 

 

 

 

 

(2) For new business facilities in enterprise zones or enhanced rural enterprise zones, the number of new business facility employees engaged or maintained in employment at the new business facility for each taxable year for which the credit is claimed must equal or exceed one person.

 

 

 

 

 

 

 

 

 

(3) (a) Any taxpayer who operates a business within an enterprise zone that adds value through manufacturing or processing to agricultural commodities shall be allowed in addition to the credit allowed under subsection (1) of this section, while located in the enterprise zone, a credit against the income tax imposed by article 22 of this title in an amount equal to five hundred dollars for each additional new business facility employee in excess of the maximum number employed in any prior tax year.

 

 

 

 

 

 

 

 

 

(b) For any income tax year commencing on or after January 1, 2003, any taxpayer who operates a business within an enhanced rural enterprise zone that adds value through manufacturing or processing to agricultural commodities shall be allowed in addition to the credit allowed under paragraph (a) of this subsection (3) a credit against the income tax imposed by article 22 of this title in an amount equal to five hundred dollars for each additional new business facility employee in excess of the maximum number employed in any prior tax year.

 

 

 

 

 

 

 

 

 

(4) Repealed.

 

 

 

 

 

 

 

 

 

(5) (a) (I) For taxable years beginning on or after January 1, 1993, if the total amount of the credits claimed by a taxpayer pursuant to the provisions of subparagraph (I) of paragraph (a) of subsection (1), paragraph (b) of subsection (1), and paragraph (a) of subsection (3) of this section exceeds the amount of income taxes due on the income of the taxpayer in the income tax year for which the credits are being claimed, the amount of the credits not used as an offset against income taxes in said income tax year shall not be allowed as a refund but may be carried forward as a credit against subsequent years' tax liability for a period not exceeding five years and shall be applied first to the earliest income tax years possible. Any amount of the credit that is not used during said period shall not be refundable to the taxpayer.

 

 

 

 

 

 

 

 

 

(II) For taxable years beginning on or after January 1, 2003, if the total amount of credits claimed by a taxpayer pursuant to subparagraph (III) of paragraph (a) of subsection (1) of this section and paragraph (b) of subsection (3) of this section exceeds the amount of income taxes due on the income of the taxpayer in the income tax year for which the credits are being claimed, the amount of credits not used as an offset against income taxes in said income tax year shall not be allowed as a refund but may be carried forward as a credit against subsequent years' tax liability for a period not exceeding seven years and shall be applied first to the earliest income tax years possible. Any amount of the credit which is not used during said period shall not be refundable to the taxpayer.

 

 

 

 

 

 

 

 

 

(b) (I) Subparagraph (I) of paragraph (a) of this subsection (5) is effective for income tax years commencing on or after January 1, 1993; except that application of subparagraph (I) of paragraph (a) of this subsection (5) to the credit described in paragraph (b) of subsection (1) of this section shall be effective for income tax years commencing on or after January 1, 1996.

 

 

 

 

 

 

 

 

 

(II) Subparagraph (II) of paragraph (a) of this subsection (5) is effective for income tax years commencing on or after January 1, 2003.

 

 

 

 

 

 

 

 

 

(c) For purposes of this section, a partnership, S corporation, limited liability company, or other entity electing not to be taxed as a corporation may pass through the credits earned under this section in any tax year to its participating partners, shareholders, or members, hereinafter referred to as the "investors" of the entity, in any percentage the entity chooses, up to the amount of the credit earned in the tax year. Credits earned but unclaimed in a tax year for which the entity elects to be taxed as a corporation may not be distributed to investors in a later tax year for which the entity elects not to be taxed as a corporation. In any tax year for which the entity elects not to be taxed as a corporation, all credits passed through to investors may be carried forward at the investor level for the carryover periods specified in this section.

 

 

 

 

 

 

 

 

 

(d) For purposes of this section, a taxpayer may only claim the new business facility employee credit for employees for whom:

 

 

 

 

 

 

 

 

 

(I) The taxpayer withholds social security, medicare, and income taxes under the taxpayer's own federal and state taxpayer identification numbers; or

 

 

 

 

 

 

 

 

 

(II) The taxpayer is the work-site employer, as defined in section 8-70-114 (2) (a) (VII), C.R.S., and an employee leasing company, as defined in section 8-70-114 (2) (a) (V), C.R.S., as the employing unit for, or co-employer with, the taxpayer, withholds social security, medicare, and income taxes under the employee leasing company's own federal and state taxpayer identification numbers.

 

 

 

 

 

 

 

 

 

(6) (a) The number of new business facility employees during any taxable year shall be determined by dividing by twelve the sum of the number of new business facility employees on the last business day of each month of such taxable year. If the new business facility is in operation for less than the entire taxable year, the number of new business facility employees shall be determined by dividing the sum of the number of new business facility employees on the last business day of each full calendar month during the portion of the taxable year during which the new business facility was in operation by the number of full calendar months during the period.

 

 

 

 

 

 

 

 

 

(b) Notwithstanding the provisions of paragraph (a) of this subsection (6), for the purpose of determining the credit allowed by this section in the case of a facility that qualifies as a new business facility but is a replacement business facility, the number of new business facility employees employed in the operation of the facility shall be reduced by the average number, determined pursuant to paragraph (a) of this subsection (6), of individuals employed in the operation of the facility that the new business facility replaces during the three taxable years preceding the taxable year in which commencement of commercial operations occurs at the new business facility.

 

 

 

 

 

 

 

 

 

(7) As used in this section, unless the context otherwise requires:

 

 

 

 

 

 

 

 

 

(a) "Building" means only structures within which individuals are customarily employed or that are customarily used to house machinery, equipment, or other property.

 

 

 

 

 

 

 

 

 

(b) "Commencement of commercial operations" means the first taxable year that the new business facility is first available for use by the taxpayer, or first capable of being used by the taxpayer, in the revenue-producing enterprise in which the taxpayer intends to use the new business facility.

 

 

 

 

 

 

 

 

 

(c) (I) "Facility" means any factory, mill, plant, refinery, warehouse, feedlot, building, or complex of buildings located within the state, including the land on which the facility is located and all machinery, equipment, and other real and tangible personal property located at or within the facility and used in connection with the operation of the facility.

 

 

 

 

 

 

 

 

 

(II) (A) If a facility that does not constitute a new business facility is expanded by the taxpayer, the expansion shall be considered a separate facility eligible for the credit allowed by this section if: The taxpayer's investment in the expansion exceeds one million dollars or the investment is less than one million dollars but the investment in the expansion exceeds one hundred percent of the investment in the original facility prior to expansion; and the expansion otherwise constitutes a new business facility.

 

 

 

 

 

 

 

 

 

(B) The taxpayer's investment in the expansion and in the original facility prior to expansion shall be determined in the manner provided in paragraph (g) of this subsection (7).

 

 

 

 

 

 

 

 

 

(III) If a facility that does not constitute a new business facility is expanded by the taxpayer, the expansion shall be considered a separate facility for purposes of the credit allowed by this section if:

 

 

 

 

 

 

 

 

 

(A) The expansion results in the employment of ten or more new business facility employees or, for income tax years commencing on or after January 1, 1996, a ten percent increase in the number of new business facility employees resulting in the employment of at least one full-time new business facility employee, whichever is less, during the taxable year over and above the average number of employees employed in the enterprise zone by the taxpayer during the twelve months immediately prior to the expansion, determined pursuant to subsection (6) of this section; and

 

 

 

 

 

 

 

 

 

(B) The expansion otherwise constitutes a new business facility.

 

 

 

 

 

 

 

 

 

(d) "Net annual rental rate" means the annual rental rate paid by the taxpayer on real and tangible personal property, less any annual rental rate received by the taxpayer from subrentals.

 

 

 

 

 

 

 

 

 

(e) "New business facility" means a facility that satisfies the following requirements:

 

 

 

 

 

 

 

 

 

(I) The facility is operated by the taxpayer in the operation of a revenue-producing enterprise. A facility shall not be considered a new business facility in the hands of the taxpayer if the taxpayer's only activity with respect to the facility is to lease it to another person. If the taxpayer operates only a portion of the facility in the operation of a revenue-producing enterprise and leases another portion of the facility to another person or does not otherwise use the other portions in the operation of a revenue-producing enterprise, the portion operated by the taxpayer in the operation of a revenue-producing enterprise shall be considered a new business facility if the requirements of subparagraphs (II) and (III) of this paragraph (e) are satisfied.

 

 

 

 

 

 

 

 

 

(II) If the facility was acquired by the taxpayer from another person, the facility was not operated immediately prior to the transfer of title to the facility to the taxpayer or immediately prior to the commencement of the term of the lease of the facility to the taxpayer by any other person in the operation of a revenue-producing enterprise, and the taxpayer continues the operation of the same or a substantially identical revenue-producing enterprise at the facility.

 

 

 

 

 

 

 

 

 

(III) The facility is not a replacement business facility.

 

 

 

 

 

 

 

 

 

(f) "New business facility employee" means a person employed by the taxpayer in the operation of a new business facility during the taxable year for which the credit allowed by this section is claimed. A person shall be deemed an employee if the person performs duties in connection with the operation of the new business facility on:

 

 

 

 

 

 

 

 

 

(I) A regular, full-time basis;

 

 

 

 

 

 

 

 

 

(II) A part-time basis if the person is customarily performing his or her duties at least twenty hours per week throughout the taxable year; or

 

 

 

 

 

 

 

 

 

(III) A seasonal basis if the person performs his or her duties for substantially all of the season customary for the position in which the person is employed.

 

 

 

 

 

 

 

 

 

(g) "New business facility investment" means the value of the real and tangible personal property, except inventory or property held for sale to customers in the ordinary course of the taxpayer's business, that constitutes the new business facility or that is used by the taxpayer in the operation of the new business facility during the taxable year for which the credit allowed by this section is claimed. The value of the property during the taxable year shall be:

 

 

 

 

 

 

 

 

 

(I) The original cost of the real and tangible personal property if owned by the taxpayer; or

 

 

 

 

 

 

 

 

 

(II) Eight times the net annual rental rate of the real and tangible personal property if leased by the taxpayer.

 

 

 

 

 

 

 

 

 

(h) (I) "Related taxpayer" means:

 

 

 

 

 

 

 

 

 

(A) A corporation, partnership, limited liability company, trust, or association controlled by the taxpayer;

 

 

 

 

 

 

 

 

 

(B) An individual, corporation, limited liability company, partnership, trust, or association under the control of the taxpayer; or

 

 

 

 

 

 

 

 

 

(C) A corporation, limited liability company, partnership, trust, or association controlled by an individual, corporation, limited liability company, partnership, trust, or association under the control of the taxpayer.

 

 

 

 

 

 

 

 

 

(II) For the purposes of this paragraph (h), unless the context otherwise requires:

 

 

 

 

 

 

 

 

 

(A) "Control of a corporation" means ownership, directly or indirectly, of stock possessing at least eighty percent of the total combined voting power of all classes of stock entitled to vote and at least eighty percent of all other classes of stock of the corporation.

 

 

 

 

 

 

 

 

 

(B) "Control of a partnership, limited liability company, or association" means ownership of at least eighty percent of the capital or profits interest in the partnership, limited liability company, or association.

 

 

 

 

 

 

 

 

 

(C) "Control of a trust" means ownership, directly or indirectly, of at least eighty percent of the beneficial interest in the principal or income of the trust.

 

 

 

 

 

 

 

 

 

(i) (I) "Replacement business facility" means a facility, otherwise described in paragraph (e) of this subsection (7) and referred to in this paragraph (i) as a "new facility", which replaces another facility, referred to in this paragraph (i) as an "old facility", located within the state that the taxpayer or a related taxpayer previously operated but discontinued operating on or before the close of the first taxable year in which the credit allowed by this section is claimed. A new facility shall be deemed to replace an old facility if the following conditions are met:

 

 

 

 

 

 

 

 

 

(A) The old facility was operated by the taxpayer or a related taxpayer for more than three full taxable years out of the five taxable years next preceding the taxable year in which commencement of commercial operations occurs at the new facility; and

 

 

 

 

 

 

 

 

 

(B) The old facility was operated by the taxpayer or a related taxpayer in the operation of a revenue-producing enterprise and the taxpayer continues the operation of the same or a substantially identical revenue-producing enterprise at the new facility.

 

 

 

 

 

 

 

 

 

(II) Notwithstanding the provisions of subparagraph (I) of this paragraph (i), a facility shall not be considered a replacement business facility if the taxpayer's investment in the new facility exceeds three million dollars or the investment is less than three million dollars but the investment in the new facility exceeds three hundred percent of the investment in the old facility by the taxpayer or related taxpayer. The investment in the new facility and in the old facility shall be determined in the manner provided in paragraph (g) of this subsection (7).

 

 

 

 

 

 

 

 

 

(j) "Revenue-producing enterprise" means an enterprise that engages in the following:

 

 

 

 

 

 

 

 

 

(I) The production, assembly, fabrication, manufacturing, or processing of any agricultural, mineral, or manufactured product;

 

 

 

 

 

 

 

 

 

(II) The storage, warehousing, distribution, or sale of any products of agriculture, mining, or manufacturing;

 

 

 

 

 

 

 

 

 

(III) The feeding of livestock at a feedlot;

 

 

 

 

 

 

 

 

 

(IV) The operation of laboratories or other facilities for scientific, agricultural, animal husbandry, or industrial research, development, or testing;

 

 

 

 

 

 

 

 

 

(V) The performance of services of any type;

 

 

 

 

 

 

 

 

 

(VI) The administrative management of any of the activities listed in subparagraphs (I) to (V) of this paragraph (j); or

 

 

 

 

 

 

 

 

 

(VII) Any combination of any of the activities referred to in subparagraphs (I) to (VI) of this paragraph (j).

 

 

 

 

 

 

 

 

 

(k) "Same or a substantially identical revenue-producing enterprise" means a revenue-producing enterprise in which the products produced or sold, services performed, or activities conducted are the same in character and use and are produced, sold, performed, or conducted in the same manner and to or for the same types of customers as the products, services, or activities produced, sold, performed, or conducted in another revenue-producing enterprise.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1141, 1, effective July 1. L. 87: (1) and (2) amended and (4) added, p. 1473, 1, effective May 25; (1) amended and (3) added, p. 1471, 3, effective May 28. L. 89: (1)(a) amended, p. 1521, 5, effective June 7. L. 90: (4) amended, p. 1840, 20, effective May 31. L. 91: (4) amended, p. 1987, 4, effective January 1, 1992. L. 91, 1st Ex. Sess.: (4) repealed, p. 13, 3, effective July 5. L. 92: (1)(a) and (3) amended and (5) added, p. 2219, 1, effective May 29; (1)(b) amended, p. 1728, 21, effective July 1. L. 94: (1)(a)(I) amended, p. 1990, 1, effective July 1. L. 96: (1)(b) and (5) amended, p. 1129, 5, effective July 1. L. 2002: (1), (2), (3), and (5) amended, p. 1107, 5, effective August 7. L. 2003: (1)(b) amended, p. 2003, 70, effective May 22. L. 2007: (1)(a)(I), (1)(a)(IV), (2), and (3)(a) amended and (6) and (7) added, p. 343, 2, effective August 3; (5)(c) amended, p. 555, 2, effective August 3. L. 2008: (5)(c) amended and (5)(d) added, p. 16, 1, effective March 6. L. 2009: (5)(d)(II) amended, (SB 09-292), ch. 369, p. 1981, 117, effective August 5.

 

 

 

 

 

 

 

 

 

 

 

Editor's note: Subsection (5)(d)(II) was amended in a 2009 act that was passed without a safety clause. The act establishes an effective date of August 5, 2009, for this provision. The act, or portions thereof, may not take effect if the people exercise their right to petition under article V, section 1 (3) of the state constitution. For further explanation concerning the effective date, see page ix of this volume.

 

 

 

 

 

 

39-30-105.5. Credit against Colorado income taxes based on expenditures for research and experimental activities.

 

 

 

 

 

 

 

 

 

 

 

(1) Any taxpayer who makes expenditures in research and experimental activities, as defined in section 174 of the federal "Internal Revenue Code of 1986", as amended, which activities are conducted in an enterprise zone for the purpose of carrying out a trade or business, shall be allowed a credit against the income tax imposed by article 22 of this title as follows:

 

 

 

 

 

 

 

 

 

(a) For income tax years commencing on or after January 1, 1989, an amount equal to three percent of the amount by which the amount expended for research and experimental activities in the enterprise zone in the income tax year of the taxpayer exceeds the taxpayer's average of the total actual expenditures for such purposes made in the same area as that which comprises the enterprise zone in the next preceding two income tax years.

 

 

 

 

 

 

 

 

 

(b) Repealed.

 

 

 

 

 

 

 

 

 

(2) In any one tax year, the amount of such credit allowable for deduction from the taxpayer's tax liability shall be the total of:

 

 

 

 

 

 

 

 

 

(a) Twenty-five percent of the total amount of such credit, with the balance carrying forward to the next tax year; and

 

 

 

 

 

 

 

 

 

(b) Any applicable carryforward amount, which amount shall be twenty-five percent of the original amount of such credit. The amount by which the credit allowed by subsection (1) of this section in any one taxable year exceeds the credit allowed to be deducted pursuant to paragraph (a) of this subsection (2) may be carried forward until the total amount of the credit is used.

 

 

 

 

 

 

 

 

 

(3) As used in this section, the term "expenditures in research and experimental activities" means expenditures made for such purposes, other than expenditures of moneys made available to the taxpayer pursuant to federal or state law, which are paid as expenses under the provisions of the federal "Internal Revenue Code of 1986", as amended.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 88: Entire section added, p. 1349, 1, effective July 1. L. 89: (1)(a) amended and (1)(b) repealed, pp. 1522, 1523, 7, 11, effective June 7.

 

 

 

 

 

 

39-30-105.6. Credit against tax - rehabilitation of vacant buildings.

 

 

 

 

 

 

 

 

 

 

 

(1) For income tax years commencing on or after January 1, 1989, any taxpayer who is the owner or tenant of a building which is located in an enterprise zone, which is at least twenty years old, and which has been unoccupied for at least two years and who makes qualified expenditures for the purpose of rehabilitating said building shall be allowed a credit against the income tax imposed by article 22 of this title in an amount equal to twenty-five percent of the aggregate qualified expenditures per building or fifty thousand dollars per building, whichever is less.

 

 

 

 

 

 

 

 

 

(2) Any taxpayer who is allowed a credit for costs incurred in the rehabilitation of property pursuant to the provisions of section 38 of the federal "Internal Revenue Code of 1986", as amended, shall not be allowed the credit provided for in subsection (1) of this section.

 

 

 

 

 

 

 

 

 

(3) If the amount of the credit allowed pursuant to the provisions of this section exceeds the amount of income taxes otherwise due on the income of the taxpayer in the income tax year for which the credit is being claimed, the amount of the credit not used as an offset against income taxes in said income tax year may be carried forward as a credit against subsequent years' income tax liability for a period not exceeding five years and shall be applied first to the earliest income tax years possible. Any credit remaining after said period shall not be refunded or credited to the taxpayer.

 

 

 

 

 

 

 

 

 

(4) As used in this section, unless the context otherwise requires: "Qualified expenditures" means expenditures associated with any exterior improvements, structural improvements, mechanical improvements, or electrical improvements necessary to rehabilitate for commercial use a building which meets the requirements established in subsection (1) of this section. "Qualified expenditures" includes, but shall not be limited to, expenditures associated with demolition, carpentry, sheetrock, plaster, painting, ceilings, fixtures, doors, windows, sprinkler systems installed for fire protection purposes, roofing and flashing, exterior repair, cleaning, tuckpointing, and cleanup. "Qualified expenditures" does not include expenditures, commonly referred to as soft costs, which include, but are not limited to, costs associated with appraisals; architectural, engineering, and interior design fees; legal, accounting, and realtor fees; loan fees; sales and marketing; closing; building permit, use, and inspection fees; bids; insurance; project signs and phones; temporary power; bid bonds; copying; and rent loss during construction. "Qualified expenditures" also does not include costs associated with acquisition; interior furnishings; new additions except as may be required to comply with building and safety codes; excavation; grading; paving; landscaping; and repairs to outbuildings.

 

 

 

 

 

 

 

 

 

(5) Any form filed with the department of revenue for the purpose of claiming the credit allowed by this section shall be accompanied by a copy of the certification of the qualified nature of the expenditures furnished to the taxpayer by the enterprise zone administrator and by copies of any receipts, bills, or other documentation of the qualified expenditures claimed for the purpose of receiving the credit.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 89: Entire section added, p. 1519, 1, effective June 7.

 

 

 

 

 

 

 

 

39-30-106. Sales and use tax - machinery and equipment exempted.

 

 

 

 

 

 

 

 

 

 

 

(1) (a) On or after July 1, 1995, purchases of machinery or machine tools, or parts thereof, and materials for the construction or repair of machinery or machine tools, in excess of five hundred dollars to be used solely and exclusively in an enterprise zone in manufacturing tangible personal property, for sale or profit, whether or not such purchases are capitalized or expensed, are exempt from taxation under article 26 of this title.

 

 

 

 

 

 

 

 

 

(b) The provisions of section 39-26-709 (1) shall govern the administration of this subsection (1), except to the extent that such section and this subsection (1) are inconsistent. For purposes of this section, in addition to the definition of "manufacturing" found in section 39-26-709 (1) (c) (III), "manufacturing" shall include refining, blasting, exploring, mining and mined land reclamation, quarrying for, processing and beneficiation, or otherwise extracting from the earth or from waste or stockpiles or from pits or banks any natural resource.

 

 

 

 

 

 

 

 

 

(2) Repealed.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1141, 1, effective July 1. L. 87: Entire section amended, p. 1451, 26, effective June 22. L. 88: Entire section amended, p. 1317, 15, effective May 29. L. 89: Entire section amended, p. 1523, 8, effective June 7. L. 91: Entire section amended, p. 2428, 2, effective June 8; entire section amended, p. 1975, 1, effective July 1, 1992. L. 95: (1)(a) amended, p. 137, 2, effective April 7. L. 2004: (1)(b) amended, p. 1047, 21, effective July 1. L. 2007: (1)(b) amended, p. 1177, 6, effective May 23.

 

 

 

 

 

 

 

 

 

 

 

Editor's note: (1) Since no certified or licensed air carrier of persons or property had executed or delivered to the state of Colorado, before July 1, 1994, a letter of commitment to operate an aircraft maintenance facility employing more than two thousand persons in the state, subsection (2) was repealed on July 1, 1994, pursuant to the mandate in paragraph (b) that it be repealed if that had not happened. For the text of subsection (2)(b), consult the 1994 replacement volume.

 

 

 

 

 

 

 

 

 

(2) Amendments to this section by Senate Bill 91-131 and House Bill 91-1182 were harmonized.

 

 

 

 

 

 

 

 

 

 

 

Cross references: For the legislative declaration contained in the 2007 act amending subsection (1)(b), see section 1 of chapter 281, Session Laws of Colorado 2007.

 

 

 

 

 

 

 

 

 

 

 

ANNOTATION

 

 

 

 

 

 

 

 

 

 

 

Only the first $150,000 of the purchase price of used machinery is exempt from taxation pursuant to this section. By incorporating the provisions of 39-26-114 (11) to govern the administration of this exemption, the limitation on purchases of used equipment contained in the federal investment tax credit is also incorporated pursuant to 39-26-114 (11)(d). Colo. Dept. of Rev. v. Cray Computer Corp., 18 P.3d 1277 (Colo. 2001).

 

 

 

 

 

 

 

 

 

By its terms, this section governs when it conflicts with 39-26-114 (11). The "capitalized and expensed" language in this section thus prevents the depreciability and useful life requirements of the federal investment tax credit from being applied to purchases of machinery that are exempt from state sales tax made within enterprise zones and the regional transportation district and certain other districts could not impose use tax on such purchases. Ball Corp. v. Fisher, 51 P.3d 1053 (Colo. App. 2001).

 

 

 

 

 

 

39-30-107. Zoning regulations and labor agreements not affected.

 

 

 

 

 

 

 

 

 

 

 

Nothing in this article shall affect any zoning measure or labor-management agreement in effect when an enterprise zone is established or adopted or entered into after the establishment.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1142, 1, effective July 1.

 

 

 

 

 

 

 

 

39-30-107.5. Taxable property valuations - sales taxes - incentives - definitions.

 

 

 

 

 

 

 

 

 

 

 

(1) (a) Notwithstanding any law to the contrary, any special district, county, municipality, or city and county within an enterprise zone may negotiate with any taxpayer who qualifies for a credit pursuant to section 39-30-105, who establishes a new business facility within an enterprise zone, or who expands a facility within an enterprise zone, the expansion of which constitutes a new business facility, for an incentive payment or credit equal to not more than the amount of the taxes levied upon the taxable property of the taxpayer; but in no instance shall any such negotiation result in such an incentive payment or credit which is greater than the difference between the current property tax liability and the tax liability for the same property for the year preceding the year in which the enterprise zone was approved.

 

 

 

 

 

 

 

 

 

(b) A special district shall not enter into an agreement pursuant to the provisions of this subsection (1) unless, prior to or simultaneous with the execution of the agreement, the taxpayer also enters into an agreement with a municipality or county pursuant to this section.

 

 

 

 

 

 

 

 

 

(2) Notwithstanding any law to the contrary, any county, municipality, or city and county within an enterprise zone may negotiate with any taxpayer who qualifies for a credit pursuant to section 39-30-105, who establishes a new business facility within an enterprise zone, or who expands a facility within an enterprise zone, the expansion of which constitutes a new business facility, a refund of the sales taxes levied by such county, municipality, or city and county for the purchase of equipment, machinery, machine tools, or supplies used in the taxpayer's business in the enterprise zone.

 

 

 

 

 

 

 

 

 

(3) As used in this section, unless the context otherwise requires:

 

 

 

 

 

 

 

 

 

(a) "Facility" means a facility as defined in section 39-30-105 (7) (c).

 

 

 

 

 

 

 

 

 

(b) "New business facility" means a new business facility as defined in section 39-30-105 (7) (e).

 

 

 

 

 

 

 

 

 

(c) "Special district" means a special district as defined in section 32-1-103 (20), C.R.S.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 87: Entire section added, p. 1472, 4, effective May 28. L. 92: Entire section amended, p. 2220, 4, effective May 29. L. 94: (1) amended, p. 2834, 5, effective January 1, 1995. L. 95: Entire section amended, p. 1213, 2, effective May 31. L. 2005: (1) amended and (3)(c) added, pp. 107, 108, 2, 3, effective August 8. L. 2007: IP(3), (3)(a), and (3)(b) amended, p. 352, 10, effective August 3.

 

 

 

 

 

 

39-30-107.6. Parallel credits and refunds - insurance premium taxes.

 

 

 

 

 

 

 

 

 

 

 

(1) Any taxpayer who is subject to the tax on insurance premiums established by sections 10-3-209, 10-5-111, and 10-6-128, C.R.S., and who is therefore exempt from the payment of income tax and who is otherwise eligible to claim a credit or refund pursuant to this article may claim such credit or refund against such insurance premium tax to the same extent as the taxpayer would have been able to claim such credit or refund against income tax.

 

 

 

 

 

 

 

 

 

(2) For purposes of administering this section, any reference in this article to "income tax year" means the calendar year.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 89: Entire section added, p. 1519, 1, effective June 7.

 

 

 

 

 

 

 

 

39-30-108. Rules and regulations.

 

 

 

 

 

 

 

 

 

 

 

(1) In accordance with article 4 of title 24, C.R.S., the executive director of the department of revenue shall promulgate rules and regulations for the implementation of sections 39-30-103.5 to 39-30-107.5.

 

 

 

 

 

 

 

 

 

(2) In accordance with article 4 of title 24, C.R.S., the commissioner of insurance shall promulgate rules and regulations for the implementation of section 39-30-107.6.

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1142, 1, effective July 1. L. 89: Entire section amended, p. 1523, 9, effective June 7.

 

 

 

 

 

 

 

 

39-30-109. Repeal of article. (Repealed)

 

 

 

 

 

 

 

 

 

 

 

Source: L. 86: Entire article added, p. 1142, 1, effective July 1. L. 87: Entire section amended, p. 1472, 5, effective May 28. L. 89: Entire section amended, p. 1523, 10, effective June 7. L. 90: Entire section amended, p. 1753, 2, effective May 24. L. 91, 1st Ex. Sess.: Entire section repealed, p. 13, 4, effective July 5.