OEDIT Performance-Based Incentive Programs • Incentives Summary • Aviation Development Zone (ADZ) • Job Growth Incentive Tax Credit (JGITC) • Strategic Fund – Job Creation • Colorado FIRST / Existing Industry Customized Job Training • Enterprise Zone • Business Loan Funds (CDBG) / Public Infrastructure Grants • Advanced Industries Accelerator Programs Simon Fox Sr. Financial and Program Manager Business Funding and Incentives Division
State Incentives Summary • Performance-Based incentives : Generally, no free money – Job Creation (at least a year / minimum number) – Re-imbursement based (training) – Investment – Location (Enterprise Zone (EZ) / Community Development Block Grants (CDBG)) – Key industry
Aviation Development Zone (ADZ) • Calendar-year performance-based job creation incentive program. • Originally only Aircraft Manufacturing (2005) • Expanded in 2013 to include Maintenance & Repair, Completion, Modification of Aircraft • $1,200 state income tax credit per net new, weighted average employee • Eligibility: – Public-use facility designated by the FAA – Registered and recognized as an ADZ with OEDIT – Minimum 10 employees – Must be located within the boundaries of the airport • Application: – OEDIT – Form DR 0085 with the Colorado Department of Revenue
Job Growth Incentive Tax Credit (JGITC) • Performance-based job creation incentive program with a state income tax credit equal to 50% FICA paid on net new jobs for each calendar year. • Businesses have to create at least 20 net new jobs (full-time equivalents) in Colorado during the credit period with an average yearly wage of at least 100% of the county average annual wage (AAW) rate based on where the business is located when compared to the county AAW. • A business located in an Enhanced Rural Enterprise Zone has to create at least 5 net new jobs (full-time equivalents) in Colorado during the credit period with an average yearly wage of at least 100% of the county average wage based on where the business is located. • The credit period is 96 consecutive months where the business may claim an annual tax credit. • All net new jobs must be maintained for at least one year after the positions are hired.
Strategic Fund Job-Incentive • Create new full-time jobs in CO that are maintained for at least a year . • Materially meet the following: – Local match commitment (1:1) – Potential for economic “spinoff” – Headquarters in Colorado – Significant capital investment ($100,000 per job) – Inter-state competitive factors – Responds to a special local economic event – Other unique conditions • Potential cash incentive levels: Enterprise Zone Non-Enterprise Zone Annual Average Wage Rate % $ Incentive / Eligible Job Annual Average Wage Rate % $ Incentive / Eligible Job 100% $2,500 100% $2,500 110% $3,000 120% $3,500 120% $4,000 140% or > $5,000 130% or > $5,000
Colorado FIRST / Existing Industry Guidelines • Partnership between OEDIT and the Colorado Community College System (CCCS). • Performance-based incentive focused on transferable job skills that enhance worker’s resumes, company’s competitiveness and Colorado’s workforce. ( Post Employment) • Maximum annual grant award of $800 per employee. ( Under Review) • Colorado FIRST : Focus on only net new hires for companies relocating or expanding in Colorado. ( Always Available ) • Existing Industry : Established companies looking to remain competitive, adapt to new technology, prevent layoffs. ( 1 on 2 off ) • General Guidelines : – Competitive process: Round by Round / Hard Skills Focus w 1 Soft – 40% Company Match – Customer Chooses Delivery: In-house / Com. Col. / 3 rd Party – Minimum wage of $11.96/hr in urban and $9.79/hr in rural areas
Enterprise Zone Incentives The following incentives can be earned by taxpayers that perform the eligible activities. These incentives pertain to state taxes, as defined in C.R.S. 39-30-101 to 112. BUSINESS TAX CREDITS CREDIT AMOUNT FYI Investment Tax Credit 3% of equipment purchases FYI Income 11 Job Training Tax Credit 10% of qualified training expenses FYI Income 31 New Business Facility (NBF) Jobs Credit $500 per new job FYI Income 10 NBF Ag. Processing Jobs Credit $500 add’l per new a.p. job = $1,000 total FYI Income 10 NBF Health Insurance Credit $200 x 2 years ($400) add’l per new job FYI Income 10 R&D Increase Tax Credit 3% of increased R&D expenditures FYI Income 22 Vacant Building Rehabilitation Tax Credit 25% of rehab expenditures (hard costs) FYI Income 24 Commercial Vehicle Investment Tax Credit 1.5% of commercial vehicle purchases FYI Income 11 Note: NBF credits require New Business Facility status as defined by the Colorado Department of Revenue. See FYI Income 10 for details. Pre-certification and Certification Process (Must be completed prior to implementation) ADDITIONAL EZ INCENTIVES INCENTIVE AMOUNT FYI Manufacturing & Mining Sales and Use Tax Exemption Expanded S&U tax exemption in EZ FYI Sales 10 & 69 25% cash / 12.5% in-kind on contributions Contribution Tax Credit FYI Income 23 to EZ projects Additionally, municipalities, counties and special districts may have increased flexibility pertaining to local incentives per CRS 39-30-107.5 if located in an EZ. Contact: Sonya Guram at Sonya.guram@state.co.us
- CDBG Business Loan Funds - Public Infrastructure Assistance • Business Loan Funds (Community Development Block Grants-CDBG) – Financial assistance through Loans and Loan Guarantees – Rural area focus to start or expand an existing business – Job creation/retention with one job for each $20,000 in loans – Federal funds, with at least 51% of jobs qualifying as low to moderate income (LMI) persons – Requires a credit and business analysis (sustainability) – Micro enterprise loans available (five or fewer employees) – www.advancecolorado.com/CDBG • Infrastructure Assistance Program (Incentive) – CDBG Grant to eligible city or county – Specific business utilizing the infrastructure must create/retain jobs (51% LMI) – One job for each $20,000 in grants – Improvements owned and/or maintained by public or quasi-public entity – Water lines/treatment – Sewer lines/treatment – Roadways – Natural Gas line – Electric power services – Railroad spurs – Lighting – Sidewalks – Alternative Power – www.advancecolorado.com/infrastructureassistance • Contact: Bob Todd at Robert.todd@state.co.us
Advanced Industry Accelerator Programs • Proof-of-Concept Grant – Applied research performed at Colorado research institutions • Early-stage Capital & Retention Grants – Headquartered in or at least 50 percent of employees based in Colorado – Less than $10 million in annual revenues and less than $20 million raised from investors – Grant size limited to $250,000 • Infrastructure Funding – Grant size limited to $500,000 – Selection preferences will be given to those projects that: • ◦ Accelerate economic growth in more than one advanced industry • ◦ Include more than one research institution or a research institution and advanced industry stakeholder • ◦ Originate from nonprofit research institutions • ◦ Focus on applied research and development, technology acceleration, or production-oriented or • ◦ Focus on workforce development that addresses the advanced industries’ workforce skills that are needed to facilitate commercialization of products or services • AI Export Accelerator Grant – Provides stipends to businesses that are new to exporting or expanding into new export markets – Eligible events/activities include obtaining international certifications, attending international trade shows, designing and producing international market marketing materials, and following export compliance regulations • www.advancecolorado.com/aiprograms
The End http://www.advancecolorado.com/funding- incentives /incentives /financing Simon.Fox@state.co.us 303-892-3766
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