State income tax credits for eligible activity EZ Tax Credits Available
Learn more about the various state income tax credits available to eligible for-profit businesses. Most credits require annual Enterprise Zone pre-certification before beginning the activity that earns the credit.
Pre-Certification Matters
Most credits require annual Enterprise Zone pre-certification before the qualifying activity begins.
Different Carryforward Rules
Carryforward periods vary by credit, so businesses should track each credit type carefully.
Start with Eligibility
Review the available credit types, confirm zone eligibility, and keep required documentation from the outset.
Credits are tied to specific activities.
The Enterprise Zone program does not provide one general-purpose credit. Instead, it offers several distinct state tax credits tied to specific types of investment, hiring, training, insurance coverage, rehabilitation, research, manufacturing, mining, and contribution activity.
A practical guide to available EZ credits
This page is designed to help eligible for-profit businesses understand which Enterprise Zone credits may apply to their activity and what the core rules look like at a high level.
It also helps reinforce a critical program point: most credits require annual pre-certification before the qualifying activity begins, and businesses should work with their tax professional to evaluate documentation and filing requirements.
Enterprise Zone tax credits and exemption
The current page lists these available credits and one sales and use tax exemption category.
Investment Tax Credit
Businesses making investments in qualified business personal property and equipment used exclusively within the Enterprise Zone for at least one year may earn a credit equal to 3% of the qualified investment amount.
Commercial Vehicle Investment Tax Credit
A taxpayer may earn a 1.5% state income tax credit on qualifying commercial trucks, truck tractors, tractors, semi-trailers, and associated parts registered in Colorado and used in an Enterprise Zone.
Job Training Tax Credit
Businesses may earn a state income tax credit for 12% of eligible job training costs for employees working within the Enterprise Zone.
New Employee Tax Credit
Businesses hiring new employees in an Enterprise Zone may earn a state income tax credit of $1,100 for each net new employee hired. Additional tax credits may apply if the business is an agricultural processor.
Employer-Sponsored Health Insurance Tax Credit
For the first two full tax years a business is in an Enterprise Zone, the business may earn $1,000 per employee insured under a qualified health plan where the employer pays at least 50% of the cost.
Research and Development Tax Credit
Businesses may earn a 3% tax credit for an increase in annual research and development expenses compared to what they spent in the prior two years.
Vacant Building Rehabilitation Tax Credit
If a business rehabilitates a commercial building that is at least 20 years old and has been vacant for at least two years, it may earn a state income tax credit for 25% of rehabilitation costs.
Sales and Use Tax Exemption
Purchases of machinery and machine tools, parts, and materials used for manufacturing are exempt from the 2.9% state and applicable county sales and use tax. Within the Enterprise Zone, the exemption expands to certain non-capitalized equipment, parts, and tools used to repair machinery. Machinery and machine tools used directly in mining also qualify.
Contribution Tax Credit
Enterprise Zone Contribution Projects support local economic improvements that help revitalize EZs through job creation, retention, and business expansion. Colorado taxpayers may earn a 25% state income tax credit by contributing to targeted efforts.
Helpful next steps
The current page points users to the South Metro EZ flyer, the state tax credit guide, and the OEDIT application link.
South Metro EZ Flyer
Review the local flyer for a high-level overview of the South Metro Enterprise Zone program.
View Flyer →EZ Tax Credit Guide
Use the Colorado Department of Revenue tax guide for state-level filing and program guidance.
View Tax Guide →Apply Now
Use the state application portal for Enterprise Zone-related filing and application steps where applicable.
Open OEDIT →Questions about eligibility, documentation, or filing?
Naomi Colwell
President & CEO, Aurora Chamber of Commerce
ncolwell@aurorachamber.org
For time-sensitive questions about eligibility, documentation, or filing, please consult your tax professional. This page provides general information and is not tax or legal advice. Program requirements may change. Confirm current requirements with the appropriate State of Colorado agencies and your tax advisor.
Review the credit before you claim it
Start by confirming which Enterprise Zone credit matches your activity, make sure pre-certification requirements are met, and work with your tax advisor to document and file correctly.