State of Colorado Incentives

Transcription

1 LONGMONT, COLORADO Incentives & BUSINESS ASSISTANCE Programs State of Colorado Incentives Manufacturing Sales and Use Tax Exemption Colorado encourages manufacturers to locate their manufacturing operations in Colorado recognizing their importance in Colorado's economy. Colorado provides an exemption from state sales and use tax on purchases of manufacturing machinery, machine tools and parts. The machinery must be: Used in Colorado; Used directly and predominantly to manufacture tangible personal property for sale or profit; Included on a purchase order or invoice totaling more than $500; Capitalized; Be of a nature that would have qualified for the federal investment tax credit under the definition of section 38 property found in the Internal Revenue Code of 1954, as amended. This includes tangible personal property with a useful life of one year or more and limits qualifying purchases of used equipment to a maximum of $150,000 annually. Job Growth Incentive Tax Credit The Job Growth Incentive Tax Credit provides a state income tax credit to businesses undertaking job creation projects that would not occur in Colorado without this program. Businesses need to create at least 20 new jobs in Colorado, with an average yearly wage of at least 100% of the county average wage rate based on where the business is located. A business located in an Enhanced Rural Enterprise Zone has to create at least five new jobs in Colorado, with an average yearly wage of at least 100% of the county average wage. All new jobs must be maintained for at least one year after the positions are hired to qualify. Colorado First/Existing Industry Customized Training Program The Colorado FIRST and Existing Industry grants are jointly administered by OEDIT and the Colorado Community College System. Colorado FIRST grants are for companies that are relocating to or expanding in Colorado and provide funds only to net new hires. Existing Industry grants focus on providing assistance to established Colorado companies in order to remain competitive within their industry, adapt to new technology and prevent layoffs. The programs increase transferable job skills that support

2 both the company s economic competitiveness and enhance worker's resumes and longterm employment opportunities. The Colorado FIRST deadline for annual applications is generally the first week in August. The Existing Industry deadline for annual applications is generally the third week in August. If program funds remain available, a second application round may occur. Strategic Fund Incentive The Strategic Fund Incentive program supports and encourages new business development, business expansions and relocations that have generated new jobs throughout the state. In some cases, the Strategic Fund may also be able to provide support for initiatives led by non-profit entities pertaining to key industries or regional development. A business may receive funding if it proposes to create new jobs in Colorado that are maintained for at least one year. A business must also meet the requirements listed as follows: Strong level of local matching commitments ($1:$1 requested); Potential for economic spinoff benefits, such as attracting suppliers, generating tourism/travel activity, high prestige, or a large expansion initiative; Capital investment, relative to the number of jobs; Responds to a special local economic event, such as replacing recent layoffs; Inter state competitive factors; Headquarters in Colorado; Other unique conditions. Colorado Economic Development Commission The Colorado Economic Development Commission (EDC) was created by the legislature to promote economic development in Colorado. It consists of nine members, five of whom are appointed by the Governor, two by the President of the Senate and two by the Speaker of the House. The EDC approves loans and grants from the economic development fund to public and private entities throughout the state to help existing businesses expand and new companies locate to Colorado. It also implements marketing programs to support ongoing business activities. All policy and funding decisions are made by commission members. School-to-Career Investment Credit Colorado taxpayers can claim an income tax credit equal to 10% of their current year investment in a qualified school-to-career program. [ (2), C.R.S.]. Qualified investment means money directly expended for wages, workers compensation insurance, unemployment insurance, and training expenses to employ a student to work or to allow a student to participate in an internship through a qualified school-to-career program.

3 Qualified school-to-career program means a program that integrates school curriculum with job training that encourages placement of students in jobs or internships that will teach them new skills and improve their school performance, and that is approved by: 1) The board of education of the school district in which the program is operating; 2) The State Board for Community Colleges and Occupational Education; 3) The Division of Private Occupational Schools created pursuant to , C.R.S.; or 4) The Colorado Commission on Higher Education. Biotechnology Sales & Use Tax Refund Colorado promotes its biotechnology industries by providing them with a taxpayerfriendly means to recover the sales and use previously-paid tax expenses on equipment and supplies used for research and development. Qualified taxpayers may seek a refund every year for all Colorado sales and use taxes they paid on purchases of tangible personal property used directly in research and development of biotechnology. This includes property such as microscopes, chemical reagents and software. Taxpayers have only a short period to claim the biotechnology refund you must submit a refund claim between January 1st and April 1st within the following calendar year. The refund applies to Colorado s 2.9 percent state sales or use taxes. 1) The tax was paid within the eligible calendar year. The refund for biotechnology is not an exclusion or exemption from sales or use taxes. To take advantage of the refund, the taxpayer first must pay any sales or use taxes owed, and then seek a refund. 2) The tax was paid by a qualified taxpayer. 3) The tax was paid in the calendar year immediately preceding the brief mandated filing period (that is, the period eligible for the refund). 4) The tax was paid for the sale, storage, use, or consumption of (a) tangible personal property (b) for use in Colorado; and 5) The tangible property was directly and predominately used in (a) research and development (as defined in the federal tax code) (b) of biotechnology. Qualified taxpayers must submit a refund application to the Colorado Department of Revenue. Colorado Business Financial Assistance Options We provide several financing tools for businesses throughout Colorado including debt and equity financing, cash incentives, grants, and tax credits to support economic development activities that improve and support employment opportunities. One-Percent Investment Tax Credit - State All companies statewide can take advantage of a 1% investment tax credit available. See FYI Income 11: blobkey=id&blobtable=mungoblobs&blobwhere= &ssbinary=true

4 Colorado Venture Capital Authority The Colorado General Assembly in 2004 passed legislation that established a Colorado Venture Capital Authority (VCA). The VCA was allocated $50 million in premium tax credits, which it subsequently sold to insurance companies. In 2005, the VCA selected a fund manager (High Country Venture, LLC) and established its first fund of approximately $25 million (Colorado Fund I, and in 2010 established a second fund of approximately $25 million (Colorado Fund II) which is also managed by High Country Venture, LLC. These funds make seed- and early-stage capital investment in businesses. High Country Venture is independently operated and generally makes funding decisions. State approval is limited to ensuring that businesses receiving funding meet minimum specified requirements. The minimum and maximum investment size may generally range from $250,000 - $3.375 million. To discuss a venture capital request, please contact High Country Venture ( / info@highcountryventure.com. City of Longmont Incentives Development Fee Rebates This program enables new and expanding primary employers to receive a rebate of permit fees and City sales taxes collected in association with the construction of new space or buildings. Fees eligible for rebate include: building permit/plan check; grading permit; electrical permit; mechanical permit, plumbing permit; water meter installation fee, City sales tax. The fees/taxes are paid at the time a building permit is issued and are rebated to the employer when a certificate of occupancy is issued. The following table provides a general summary of amounts that can be rebated to typical tenant finish and new construction projects. The table is illustrative because there are many factors that determine eligible fees/taxes that are unique to each circumstance. Specific and eligible rebate amounts are determined based on each company s proposed investment. Incentive Eligible Fees/Taxes Tenant Improvement of Existing Building Project Size Investment Value/Budget Eligible Fees/Taxes 3,000 s.f. $150,000 $5,000 10,000 s.f. $500,000 $14,000 25,000 s.f. $1,250,000 $33,000 50,000 s.f. $2,500,000 $62,000 Incentive Eligible Fees/Taxes New Building Construction Project Size Investment Value/Budget Eligible Fees/Taxes 5,000 s.f. $500,000 $15,000 75,000 s.f. $9,800,000 $233, ,000 s.f. $18,300,000 $431,000

5 (Notes: Listed fees are those eligible for rebate--not all City/County fees are eligible. Fees will vary based on lot and/or building characteristics, electrical service requirements, water tap size, etc.) OR Personal Property Tax Rebates This program allows a 50% rebate for each of four years, of the City s portion of personal property taxes for new and expanding primary employers. **Primary employers may choose between the Development Fee Rebate or the Personal Property Tax Rebate programs. Incentives may not be granted from both programs.** Sales & Use Tax Exemption on Manufacturing Equipment The City of Longmont offers an exemption exempting the employer from paying the City 2.0% (non-earmarked) sales and use tax on the purchase and use of machinery and machine tools with a cost in excess of $1,000 to be directly used in Longmont. R&D Sales & Use Tax Exemption New businesses are exempt from paying the City 2.0% (non-earmarked) sales and use tax on the purchase and use of measurement and inspection equipment or research and development equipment for the first two years. Employers can apply for an additional three years of sales and use tax rebates at any time during the life of the employer in Longmont, as long as it meets the FTE job creation and salary requirements of the program. Private Activity Bonds (PAB) Manufacturers can apply for tax-exempt private activity bonds allocated to the County to help finance construction of relocation and/or expansion projects under $10 million. The benefits of using the bonds are: *Low interest rates *Long-term (20+ years) fully amortized structure of the bonds. Bond allocations can be used for the following: building, equipment, land, project soft costs (architects, engineers, attorneys, etc.) landscaping, fixtures and furnishings, and cost to issue bonds. There is an application fee for the program.

6 Sales and Use Tax Exemption for Electric and Gas Electricity and gas used exclusively in the manufacturing process is exempt from taxation in addition to utilities consumed by nonprofit entities. Application for this incentive is through the City of Longmont and three pieces of information are required for review. Contact Kristi Jackson, Longmont Sales Tax Auditor at for more information. Federal Funding & Incentives Work Opportunity Tax Credit (WOTC) - Federal The Work Opportunity Tax Credit (WOTC) is a federal income tax credit that encourages employers to hire twelve targeted groups of job seekers. WOTC can reduce employer federal tax liability by as much as $9,000 per new hire. WOTC is one tool in a diverse toolbox of flexible strategies designed to help job seekers most in need of employment gain on-the-job experience and move towards economic self-sufficiency. This employer tax incentive joins other employment program and targeted tax credit initiatives aimed at helping American workers and increasing American productivity and economic growth. For more information contact: the Colorado Department of Colorado Labor and Employment at or website at: The Rocky Mountain Trade Adjustment Center - Federal The Rocky Mountain Trade Adjustment Center (RMTAAC) is an independent, non-profit organization offering technical and professional assistance to small and medium-sized manufacturers adversely affected by import competition. Sponsored by the U.S. Department of Commerce, this cost sharing federal assistance program pays up to 50% of the total cost of consultants or industry-specific experts for projects that improve a manufacturer s competitiveness. For more information contact Rocky Mountain TAAC. Toll Free: Small Business Innovation Research Program (SBIR) - Federal Since its enactment in 1982, as part of the Small Business Innovation Development Act, SBIR has helped thousands of small businesses to compete for federal research and development awards. SBIR is a highly competitive program that encourages small business to explore their technological potential and provides the incentive to profit from its commercialization. For more information, contact the Colorado Small Business Association

7 Small Business Technology Transfer Program (STTR) - Federal STTR is an important small business program that expands funding opportunities in the federal innovation research and development arena. STTR is a highly competitive program that reserves a specific percentage of federal R&D funding for small business and non-profit research institution partners. STTR combines the strength of both small businesses and non-profit research laboratories by introducing entrepreneurial skills to high-tech research efforts. The technologies and products are transferred from the laboratory to the marketplace. For more information, visit: OTHER BENEFITS OF LOCATING IN LONGMONT Low Business Costs Longmont building lease rates and land costs are generally lower in Boulder County as are wage rates. Property and sales taxes levied by the City of Longmont (3.275%) fall on the low end of those levied by other cities in the region. Finally, the City-owned electric utility delivers electric power at rates 3-5% lower than those charged in Colorado and, in most cases, the nation. Skilled Labor Force Longmont area firms access within a 30-minute commute a population base of 1,000,000 persons. This labor market area produces more than 300,000 workers whose educational attainment level are among the highest in the U.S. Entry level labor for many occupations in Boulder County are drawn from within the County and the Northern Denver region resulting in access to lower labor costs for those positions and a large reserve pool. Diverse Educational and Training Resources Longmont is situated at the center of Colorado's higher education basin. The University of Colorado at Boulder is 20 minutes to the southwest. Colorado State University and the University of Northern Colorado are less than a 60 minute drive to the north, while the University of Colorado at Denver and the Colorado School of Mines are less than 30 minutes to the south. Over 100,000 students reside on these four campuses. Workforce training programs, including subsidized training designed to meet a company's needs are offered by the Boulder County Private Industry Partnership, Front Range Community College, and the St. Vrain Valley Career Development Center.

8 The Longmont area is served by the St. Vrain Valley School District, who graduates students, whose test scores consistently rank above State and national norms. For more information on incentives in the Longmont area, please contact Wendi Nafziger at or