Consider your options: navigate incentives as your business grows in Colorado
Business Incentives in Colorado can be tricky to navigate, but well worth the investment for any company considering the state for it’s growth. Colorado has an unmatched landscape when it comes to access to a highly qualified workforce, exceptional natural resources, and climate stability, as well as reliable utility infrastructure and a strong base of industry, particularly when it comes to aerospace and defense, professional and technical services, and advanced manufacturing.
In the vibrant economic landscape of Colorado, various targeted incentives are designed to stimulate growth and innovation across key industries. At Living City Ventures, we specialize in navigating these opportunities, helping businesses leverage programs that not only boost growth but also contribute positively to the community and the state’s economy. Here’s an insightful look at some of the most compelling incentives in Colorado, depending on location, asset type, and business type, and how we can help you access them.
The following provides a high level summary for some of the programs avaialble to Colorado employers. We always recomend working with Colorado Office of Economic Development and International Trade (OEDIT) and local Economic Development Corporations in an effort to find the right mix of programs for your business, and can help you get connected.
Tax Increment Financing through URAs and DDAs
Urban Renewal Authorities (URAs) and Downtown Development Authorities (DDAs) play pivotal roles in revitalizing and sustaining economic development in urban areas through Tax Increment Financing (TIF). TIF is a financial tool that fosters public and private investment in redevelopment projects by reallocating funds from property taxes to encourage development in targeted districts. These projects are concentrated in urban and infill areas where blighted conditions drive the need for reinvestment. Living City Ventures can assist in identifying eligible locations for TIF and these programs into your capital stack.
Opportunity Zones
Opportunity Zones offer tax incentives for investments in qualified census tracts, aiming to spur economic development. Investors can benefit from capital gains tax reductions, which can significantly impact long-term investments. Living City Ventures can assist in identifying eligible zones and structuring investments to maximize returns.
Enterprise Zone Incentives
Designed to promote business growth in specific areas of the state, the Enterprise Zone program provides tax credits for job creation, investment in business property, and other economic contributions. We help clients understand how to qualify for these benefits and ensure compliance with the program’s requirements.
State Historic Tax Credits
Colorado’s State Historic Tax Credits are designed to encourage the preservation and reuse of historic buildings, contributing to the cultural heritage and economic development of the state. These tax credits provide a financial incentive for property owners to rehabilitate historic buildings while maintaining their character.
Eligible projects can receive a percentage of the qualified rehabilitation expenses as a tax credit, which can then be applied against state income taxes or taken to the tax credit market. This program not only supports the preservation of Colorado’s history but also promotes the revitalization of older neighborhoods and stimulates local economies through construction jobs and increased property values. Living City Ventures can help clients identify eligibility and use of these credits.
New Market Tax Credits (NMTC)
The New Market Tax Credits (NMTC) program is a federal initiative designed to stimulate investment and economic growth in low-income urban and rural communities. This program provides tax incentives to investors who fund projects in qualifying areas, effectively reducing the cost of capital for businesses, and facilitating the development of community-enhancing projects.
Through the NMTC program, investors receive a tax credit totaling 39% of their investment, distributed over a period of seven years. This substantial incentive encourages the funding of a wide range of developments, including commercial real estate projects, manufacturing, healthcare facilities, and educational institutions, all aimed at driving economic revitalization. Our team at Living City Ventures provides expert guidance on eligibility and can connect you to a NMTC advisor to help navigate the complex regulations associated with these zones.
Low Income Housing Tax Credits (LIHTC)
The Low-Income Housing Tax Credit (LIHTC) program is the most utilized funding source for the delivery of affordable housing throughout the United States, and in Colorado. This program offers tax incentives to developers to encourage the construction or rehabilitation of rental housing for low- to moderate-income tenants. Affordable Housing developers utilize 4% non-competitive and 9% competitive programs used to subsidize project eligible costs.
Living City Ventures is not an affordable housing developer, but we can help connect you with an advisor to evaluate integrating LIHTC programs into your capital stack and support in the application process, if a project is deemed a good fit for the program.
Foreign Trade Zones
By operating within a Foreign Trade Zone, businesses can reduce operational costs linked to customs duties and taxes. These zones are ideal for companies engaged in international trade. Our team at Living City Ventures can assist you in identifying locations with this benefit and connect you with an advisor for navigation.
Colorado Aviation Development Zones
These zones are tailored to support the aerospace and aviation industries through various tax incentives. Businesses can receive benefits for property investment, job creation, and more. We facilitate access to these incentives, helping aviation-related businesses thrive.
EV Charging Programs
With the rise of electric vehicles and Colorado’s commitment to environmental sustainability, Colorado offers incentives for the development of EV charging infrastructure. These programs are designed to support environmental sustainability efforts and the growing EV market. Our team can help you tap into these funds to either start or expand your EV charging facilities.
State Job Growth Incentive Tax Credit
This tax credit is available for certain primary employers who can demonstrate net job creation. It offers a strategic advantage by reducing tax liabilities proportional to job growth. Accessing these funds requires significant local and state level coordination with economic development agencies. At Living City Ventures, we can guide businesses through this process.
Strategic Fund Job Growth Incentive
Similar to the tax credit, this incentive offers direct funding to businesses that create significant job opportunities in Colorado. We assist clients in presenting a strong case for these funds, emphasizing their potential impact on the local economy.
Skill Advance Colorado Job Training Grant
Investing in workforce development is crucial, and this grant supports businesses willing to enhance their team’s skills. We help clients apply for these grants, ensuring they meet the criteria and maximize the potential benefits for their workforce.
Advanced Industry Tax Credit
Targeted at businesses in sectors like biotechnology, electronics, and more, this tax credit encourages innovation by easing the tax burdens associated with research and development. Our team provides insights into how businesses can qualify and apply for these credits and can connect you with the right advisor to support you in pursuit of these credits.
CHIPS Tax Credit
Focused on the semiconductor industry, this tax credit aims to bolster domestic manufacturing capabilities. Living City Ventures can connect you with an advisor to navigating the prerequisites to benefit from this incentive.
Small Business Innovation Research Grants (SBIR)
These federal grants support small businesses engaged in research and development with potential for commercialization. We will connect your business with an advisor to help you navigate the complex application process, enhancing chances of securing this essential federal funding source.
At Living City Ventures, we are dedicated to helping our clients understand and access these diverse programs, ensuring they can capitalize on the opportunities that Colorado offers. Whether you’re looking to start a new venture or expand an existing one, our team is here to facilitate your journey towards growth and success.
For more information on how we can assist your business, contact us today or sign up for our newsletter.