(1) New business
income tax credit. (a) (I) If a new business locates in a rural jump-start zone during
the income tax years commencing on or after January 1, 2016, but before January 1,
2031, and the commission has approved the new business for the rural jump-start
zone program benefits as specified in section 39-30.5-104 (7)(a), then except as
provided in subsection (1)(a)(II) of this section, the new business is entitled to
receive an annual income tax credit in an amount equal to one hundred percent of
the income taxes imposed by article 22 of this title 39 on the income derived from
its activities in the rural jump-start zone for four consecutive income tax years
beginning with the first income tax year designated by the commission in the first
credit certificate. The commission shall conduct an annual review to verify that the
new business continues to meet the requirements set forth in this article 30.5 and
shall issue a credit certificate to the new business for every income tax year during
the four-year period only if the commission is satisfied the requirements are being
met.
(II) A new business may seek an extension of the four-year benefits period
specified in subsection (1)(a)(I) of this section by completing a written application to
the commission. The extension may not exceed an additional four years. The
application for extension must include an explanation of the new business' need for
the extension and any other information the commission deems necessary. In
deciding whether to grant the extension, the commission must consider the state of
the economy in the rural jump-start zone, the estimated demand for tax credits
allowed in this section for other new businesses, and the importance of these
credits in incentivizing the new business. The extension application must be
considered at a regularly scheduled meeting of the commission where the public is
allowed to comment.
(b) To claim the income tax credit allowed in this section, the new business
shall attach a copy of the credit certificate to its state income tax return. No tax
credit is allowed under this section unless the new business provides the copy of
the credit certificate with its filed state income tax return.
(c) If a new business has income both from operations within the rural jump-start zone and operations outside of the rural jump-start zone, the new business
shall apportion its income between the operations within and outside the rural
jump-start zone in accordance with rules promulgated by the department in order
to calculate the amount of income tax credit. Such rules shall calculate the value of
the credit, as nearly as practicable, to be equal to the tax due on the income
generated by the new business that relates to its activities in the rural jump-start
zone on the basis of the new business' property and payroll in the rural jump-start
zone relative to its property and payroll everywhere.
(d) The commission shall, in a sufficiently timely manner to allow the
department to process returns claiming the income tax credits allowed by this
section, provide the department with an electronic report of each new business that
the commission approved for the rural jump-start zone program benefits as
specified in section 39-30.5-104 (7)(a) for the preceding calendar year that includes
the following information:
(I) The taxpayer's name; and
(II) The taxpayer's social security number or the taxpayer's Colorado account
number and federal employer identification number.
(e) If a new business receiving an income tax credit allowed in this
subsection (1) is a partnership, limited liability company, S corporation, or similar
pass-through entity, the commission shall issue credit certificates that allocate the
credit among the new business' partners, shareholders, members, or other
constituent entities in accordance with their ownership interests. The new business
shall certify to the commission, and the commission shall provide to the department
no later than the January 15 following each income tax year for which the new
business is claiming a credit, the identity and ownership percentage, including such
identifying information as the department may require, of each partner,
shareholder, member, or other constituent entity of the new business.
(2) New hire income tax credit. (a) (I) Except as provided in section 39-30.5-104 (7)(b)(II) and subsection (2)(a)(II) of this section, if a new hire is employed by a
new business, and the commission has approved the new business for the rural
jump-start zone program benefits as specified in section 39-30.5-104 (7)(a), for
income tax years commencing on or after January 1, 2016, but before January 1,
2031, new hires are entitled to receive an income tax credit in an amount equal to
one hundred percent of the income taxes imposed by article 22 of this title 39 on
the new hire's wages paid by the new business for work performed in the rural
jump-start zone for four consecutive income tax years beginning with the first
income tax year in which the new hire is employed by the new business. The
commission shall conduct an annual review to verify that the new hire and the new
business continue to meet the requirements set forth in this article 30.5 and shall
issue a credit certificate to the new business for each new hire for every income tax
year during the four-year period only if the commission is satisfied the
requirements are being met.
(II) A new business may seek an extension of the four-year benefits period
specified in subsection (2)(a)(I) of this section by completing a written application to
the commission. The extension may not exceed an additional four years. The
application for extension must include an explanation of the new business' need for
the extension and any other information the commission deems necessary. In
deciding whether to grant the extension, the commission must consider the state of
the economy in the rural jump-start zone, the estimated demand for tax credits
allowed in this section for other new businesses, and the importance of these
credits in incentivizing the new business. The extension application must be
considered at a regularly scheduled meeting of the commission where the public is
allowed to comment.
(b) To claim the income tax credit allowed in this section, the new hire shall
attach a copy of the credit certificate to the new hire's state income tax return. No
tax credit is allowed under this section unless the new hire provides the copy of the
credit certificate with his or her filed state income tax return.
(c) The commission shall, in a sufficiently timely manner to allow the
department to process returns claiming the credit allowed by this section, provide
the department with an electronic report of each new hire receiving a credit
certificate as allowed in this section for the preceding calendar year that includes
the following information:
(I) The new hire's name; and
(II) The new hire's social security number.
(3) New business sales and use tax refund. (a) Each new business is eligible
for a refund for all sales and use taxes imposed under parts 1 and 2 of article 26 of
this title 39 on the purchase of all tangible personal property acquired by the new
business and used exclusively within the rural jump-start zone. Except as provided
in subsection (3)(b) of this section, the new business is eligible for the refund
allowed in this subsection (3)(a) for four consecutive years beginning with the date
the commission approved the new business for the rural jump-start zone program
benefits as specified in section 39-30.5-104 (7)(a).
(b) A new business may seek an extension of the four-year period specified
in subsection (3)(a) of this section by completing a written application to the
commission. The extension may not exceed an additional four years. The application
for extension must include an explanation of the new business' need for the
extension and any other information the commission deems necessary. In deciding
whether to grant the extension, the commission must consider the state of the
economy in the rural jump-start zone, the estimated demand for sales and use tax
refunds allowed in this section for other new businesses, and the importance of the
refund in incentivizing the new business. The extension application must be
considered at a regularly scheduled meeting of the commission where the public is
allowed to comment.
(c) The commission shall provide the department with a list of every new
business eligible for the sales and use tax refund allowed in this subsection (3).
(4) Restrictions on other credits. Notwithstanding any law to the contrary, if
a new business claims the rural jump-start zone program benefits allowed in this
section, the new business may not claim any other tax incentive that the new
business is eligible for in this title as a result of establishing the new business in the
state, including tax incentives for the new hires hired by the new business.
(5) Grant program. (a) There is hereby created in the office the rural jump-start zone grant program, referred to in this subsection (5) as the grant program,
to provide grants for new businesses in addition to the tax benefits set forth in this
article 30.5, and to provide grants to state institutions of higher education or to
economic development organizations.
(b) The office shall administer the grant program and the commission shall
award grants, in accordance with this subsection (5) and section 39-30.5-104 (7)(c)
and (7)(d). Subject to available appropriations, grants shall be paid out of the rural
jump-start zone grant fund account in the Colorado economic development fund
created in section 24-46-105 (7).
(c) The office shall issue guidelines to implement the grant program as
specified in section 39-30.5-104 (1)(a).