Baca County Enterprise Zone Contribution Projects
The State of Colorado Enterprise Zone program allows a 25% tax credit to be given to businesses or individuals who contribute to approved Enterprise Zone projects. This includes but is not limited to these eligible categories of projects:
- Homeless Shelters
- Business Assistance (training, incubators, finance funds, feasibility studies, etc.)
- Job Training projects
- Publicly-owned infrastructure projects
- Marketing for business, economic, business district development
- Rural health care
- Community Development projects
In general, a project must have as one of its main purposes creating or preserving an environment that will help attract, expand, or retain employers in the enterprise zone.
All individuals and businesses located with State of Colorado Income Tax liability may make a contribution to any or all of the approved projects listed below and receive a tax credit. Cash contributions will receive a 25% tax credit, and in-kind contributions will receive 12.5% (of value) tax credit. The maximum credit allowed to any one taxpayer is $100,000 per year (this is the cash equivalent to a cash contribution of $400,000).
Approved 2017 Enterprise Zone Contribution Projects:
- Stonington Community Center
Statutory Purpose and Authority
The purpose of the Enterprise Zone Contribution Tax Credit (authorized by C.R.S. 39-30-103.5) is to encourage taxpayers to assist local enterprise zones, working with governmental and non-profit partners, to undertake activities “implementing the economic development plan for the Enterprise Zone.” “Economic development” is further defined by the statute to mean “directly related to job creation or job preservation”, “to promote nonprofit or government-funded community development projects in enterprise zones”, and to assist homeless shelters which provide employment-related services in the Enterprise Zone. The Colorado Economic Development Commission (EDC) is charged with reviewing and approving proposed projects that it determines are “eligible under the requirements of [the law] or is essential to the mission of the Enterprise Zone.”
Projects (or modifications of existing projects) must be approved by a designated local Enterprise Zone Administrator. If approved, projects shall be submitted by the local Enterprise Zone Administrator to the State for approval from the EDC. Organizations seeking approval for a project, program or organization for the Enterprise Zone Contribution Tax Credit agree to abide by all applicable reporting and procedural requirements of the EDC and Department of Revenue. Eligibility to provide the Enterprise Zone Contribution Tax Credit to donors may be suspended at any time if a project ceases to comply with the requirements of the statute or EDC policies.
The EDC typically reviews new Contribution Project proposals the second Thursday of every other month. Future meetings are tentatively scheduled and subject to change at the discretion of the EDC.
Project proposals should be submitted via email to the local zone administrator using the EZ Contribution Project Proposal Form (below). Forms must be digitally signed by the applicant organization. If approved by the local zone administrator, the project will be submitted by the local zone administrator to the State on behalf of the project.
Eligible Categories of Projects
For guidance on what types of programs or organizations can be proposed as an Enterprise Zone Contribution Project, please download and review the EDC Policy Document. The EDC has determined that projects which fall in the categories listed on this document generally meet the purposes allowed by the law, subject to review of individual project issues.
In general, a project must have as one of its main purposes creating or preserving an environment which will help attract, expand, or retain employers in the enterprise zone. Direct employment of the sponsoring non-profit organization will not be used to qualify a project, nor will project construction employment.
Zone Geography: If a project operates both within and outside of Enterprise Zone boundaries, the sponsoring organization should be able to show that EZ contributions are used to cover those expenditures which it can reasonably allocate to the zone geography, and that other sources of funding are available to cover non-zone related activities. An eligible homeless organization’s housing or employment support services must be located within a zone.
Multiple Purpose Organizations: Organizations that serve multiple purposes in addition to an approved project must maintain a separate accounting system to assure that zone-contribution funds are used only for the approved functions.
No Direct Benefit: The statute provides that no credit is to be “allowed for contributions that directly benefit the contributor.” The EDC will not approve project proposals whose primary purpose is to provide infrastructure for an individual user or developer who is a contributor, or for job-training projects for an individual company who is a contributor. The EDC will consider proposals who have matching contributions from sources that do not receive a direct benefit, on a case-by-case basis.
Reporting Requirements: Contributions certified for EZ contributions must be reported to the local zone administrator promptly, and zone administrators must report all contributions to State EZ staff within 90 days or less. Zone administrators are required to submit to EDC staff by November 1 of each year a list of all projects proposed to be re-certified for contributions in the coming calendar year. Organizations with approved contribution projects must submit an annual recertification application to their local zone administrators, including any other required performance reporting, prior to this deadline.
Cap on Aggregate Tax Credits per Project: Each project must limit the total contributions it certifies for the Enterprise Zone Contribution Tax Credit each year to $750,000 or less in potential tax credits (this is equivalent to $3 million in cash donations or $6 million of in-kind donations).
Local Zone Fees: Local Enterprise Zone Administrators are allowed to charge a fee to organizations to whom they provide administrative services for the administration of the organization’s approved Enterprise Zone Project. State Legislature does not provide funds for this administration. Taxpayers are not charged a fee on their contribution, and shall receive the Contribution Tax Credit on their full donation. Please contact your local Enterprise Zone Administrator for the details and limits of their fee policy.