State program
Colorado Enterprise Zone Research and Development Increase Tax Credit
A geographically targeted credit for companies that increase research spending inside a designated Colorado Enterprise Zone.
Program Overview
Colorado ties its research incentive to its Enterprise Zone program, which directs investment to economically distressed areas. Businesses that increase qualified research expenditures within a zone over the average of the prior two years may claim a credit equal to a percentage of the increase. The credit must be pre-certified with the local Enterprise Zone administrator before the activity begins, and it is claimed over multiple years rather than all at once, so cash-flow planning is part of the analysis.
Eligibility
Businesses conducting qualified research, as defined under IRC Section 41, at a physical location inside a Colorado Enterprise Zone, with annual pre-certification from the zone administrator.
Benefits
Credit against Colorado income tax claimed at 25% of the credit amount per year until fully used.
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