A New State of Colorado Income Tax Credit...

The Colorado Office of Economic Development and International Trade (OEDIT) announced a new State of Colorado income tax credit that begins on January 1, 2010.

Colorado legislator’s recently passed HB 09-1105 (linked below) creating the Colorado Innovation Investment Tax Credit (CIITC). CIITC provides an income tax credit for investing entities that make investments during calendar year 2010 in small, innovative Colorado companies that are involved in research and development or manufacturing of new technologies, processes, and/or products.

The tax credit is equal to 15% of the investment up to a maximum tax credit of $20,000 per taxpayer id. The maximum tax credit amount for the entire program for the 2010 tax year is $750,000.

OEDIT is responsible for implementing and managing this new program. OEDIT has prepared the Fact Sheet (linked below) containing additional information about the program and guidance regarding the application and review process.

Also linked below is an Application Package for use (1) by the entity making the investment to apply for the tax credit (see Part A of the application), and (2) by the business receiving the investment to apply for certification by OEDIT as a qualified small business (see Part B of the application). Note that a small business may submit Part B to OEDIT prior to, or at the time of, the investment. OEDIT will begin accepting Part A on January 1, 2010. OEDIT will being accepting Part B immediately.

Requests for tax credits will be processed on a first come, first serve basis. As such, it is important to get the word out to potential investors and small businesses about this opportunity, especially since there is an annual limit of $750,000.