Pueblo Incentives

FUNDING

In 1984 the citizens of Pueblo Colorado came together in a show of solidarity and for the first time approved adding a half cent sales tax on themselves to create a pool of funds to be used to bring primary jobs to the city. Every five years since then they have approved extending the half cent sales tax. The citizens realized a significant benefit as many new companies bringing thousands of primary jobs to Pueblo resulted from their continued support of this measure.

Companies whose projects meet certain requirements as provided for in Ordinance No. 6381, as amended, may be eligible for various incentives through the Sales and Use Tax Capital Improvement Projects Fund. The project may not be speculative in nature and the applicant must document to the City Council’s satisfaction the applicants financial ability and experience to complete the project and fulfill the applicant’s representations and commitments made with respect to the project, including, without limitation, the number of new employees who will fill primary jobs, the project value, and the project’s gross salary.

TRAINING

The Pueblo Program includes pre-employment training of primary and/or training of primary job workers upon first being hired. A company must agree to give graduates of the Pueblo Program hiring priority and to pay a minimum wage for each primary job of at least $8.50 per hour or the minimum hourly wage under Colorado First/Existing Industry Customized Training Programs, whichever is greater, plus fringe benefits. The $800 grant per primary job employee will be available if the following conditions are met: (1) Only when a trained or experienced work force is not already available, (2) the company acts as sponsor in the development and implementation of the program, (3) Forty percent of the training cost is financed by the sponsoring company, (4) training programs last no longer than is required to provide workers with the required job skills, and (5) only direct costs of the program are included in the computation of the total cost of the program.

TAX CREDITS

The State of Colorado does not impose personal property taxes or inventory taxes on businesses. There is not a unitary state tax; neither the city of Pueblo nor Pueblo County imposes any local income taxes.

Certain state and federal tax credits serve as an encouragement to business expansion:

The Inventory Tax Credit is a refund against state income taxes which permits 100 percent (100%) credit on local property taxes paid on business inventories.
The “new Colorado investment tax credit” is allowed in an amount equal to 10% of the total qualified investment as determined under section 46© of the internal revenue code in qualified property as defined in section 48 of the internal revenue code as such sections existed prior to the Revenue Reconciliation Act of 1990.
The “new investment tax credit” is basically 10% of what the federal regular percentage ITC would be if it were still in effect.
The “old investment tax credit” is 10% of the current year federal investment credit, which includes the rehabilitation, energy and reforestation investment credits on assets located in Colorado. The credit is limited to the first $5,000 of tax liability plus 25% of the tax in excess of $5,000.
The city and county can negotiate an abatement of their personal property taxes with any company which establishes a new business facility or expands an existing facility. In the past, this has been up to 50% abatement.
Purchases of manufacturing equipment and machine tools and parts thereof are exempt from the two point nine percent (2.9%) state sales and use tax in addition to the one percent (1%) county tax. To qualify the machinery must: (1) be used in Colorado, (2) be used directly and predominantly to manufacture tangible personal property for sale or profit, (3) be of a nature that would have qualified for the federal investment tax credit under the definition of section 38 property. 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, (4) be included on a purchase order or invoice totaling more than $500, and (5) be capitalized.
An income tax credit of $1,200 per employee is available for hiring qualified new aviation zone employees to aircraft manufacturers located in a Colorado aviation development zone. The airport in Pueblo is located in an aviation development zone. A “new aviation zone employee” is an aviation zone employee that is hired by a facility that employs ten or more employees, and such hire increase the overall employment at the facility above previous levels.

The Pueblo Urban Enterprise Zone was established on September 15, 1986. It is part of the State of Colorado’s Enterprise Zone program under the Colorado Urban and Rural Enterprise Zone Act.

The New Business Facility Employee Credit: Any taxpayer who establishes a new business facility located in an enterprise zone can claim an income tax credit of $500 for each new business facility employee who is working within the zone. For subsequent tax years, a credit of $500 shall be allowed for any increase in the average number of new business facility employees working in the zone in excess of the maximum number employed in any prior tax year. A new business facility is a newly acquired, constructed or leased facility used by the taxpayer to operate a revenue-producing enterprise.
The New Business Facility Agricultural Processing Employee Credit: An additional credit of $500 per new business facility employee may be claimed by businesses that add value through manufacturing or processing to agricultural commodities.
The Employer Sponsored Health Insurance Credit: For the first full income two years while located in an enterprise zone, a taxpayer is allowed to take a credit of $200 for each new business facility employee insured under a health insurance plan or program that is approved by the State Insurance Commissioner for sale in Colorado and at least 50% of the cost of which is paid by the taxpayer.
Research and Development Tax Credit: Taxpayers who make expenditures on research and experimental activities in the Enterprise Zone qualifies for a three percent (3%) income tax credit. The tax calculated as three percent (3%) of the amount of increase in the taxpayer’s research & development expenditures within an enterprise zone over the average of such expenditures during the previous two years. The expenditures must meet the research and experimental activities as defined in section 174 of the federal Internal Revenue Code of 1986, as amended.
Twenty Five Percent (25%) Tax Credit to Rehabilitate Vacant Buildings up to $50,000: This tax credit is intended to encourage building owners to undertake rehabilitation projects and bring buildings back into use. A building in an enterprise zone that is at least 20 years old and has been completely vacant for at least 2 years qualify for this tax credit for rehabilitative purposes. A taxpayer must submit DR 0076 from the Enterprise Zone administrator and documentation of the qualified expenditures to claim the credit.
Qualified Job Training Program Investment Credit: For income tax years, beginning on or after January 1, 1997, Colorado taxpayers are allowed to claim a credit of ten percent (10%) of their total current year investment in a qualified job training program. “Qualified job training program” means a structured training or basic education program conducted on-site or off-s9te by the taxpayer or another entity to improve the job skills of employees who are employed by the taxpayer.
Enterprise zone investment tax credit: The enterprise zone investment tax credit is 3% of any qualified investment in section 38 property: (1) acquired and placed in service or constructed during the tax year, and (2) used exclusively (100%) in a Colorado enterprise zone for the first year of its ownership by the taxpayer. The enterprise zone investment tax credit with respect to any qualified investment is in lieu of any “old investment tax credit” otherwise allowed with respect to the same expenditure.