Opportunity Zone, Tax Credits and Exemptions

Tax Credits and Exemptions may be available to many businesses as well as developers for various prioritized activities. Some examples include rehabilitating old buildings, hiring new employees, or developing certain types of  property.

Downtown is also within a federal and local Economic Opportunity Zone, which allows projects and businesses to capitalize on deferred capital gains being invested into the district.

Economic Opportunity Zone

Created as part of the Tax Cuts and Jobs Act of 2017, the Opportunity Zones Program is designed to drive long-term capital to distressed communities by providing tax benefits on investments in Opportunity Funds.  Most of Downtown, south of Boulder Street, falls within a designated Opportunity Zone. In addition to being part of the federal Opportunity Zone Program, Downtown is also one of the local Economic Opportunity Zones, which prioritizes support and technical assistance. seeking more information. If you are considering offering investment opportunities, or forming Qualified Opportunity Funds, let us know so that we can send you more information about how we can support by filling out either our  Investor Interest Form or the Qualified Business and Property Intake Form.

 

Enterprise Zone Tax Credits

Downtown Colorado Springs is located within a Colorado Enterprise Zone, a statewide program administered locally by El Paso County. The Enterprise Zone program provides incentives for new and established businesses to locate or expand in certain areas of the state.  Businesses in the Enterprise Zone may save thousands of dollars on their Colorado income tax bill each year for any or all the following:

  • Making capital investments
  • Hiring new employees
  • Providing training for employees
  • Rehabilitating old buildings
  • Conducting research and development

Contact: DeAnne McCann, Economic Development Manager for El Paso County, 719-520-6481, DeAnneMcCann@elpasoco.com

City Sales and Use Tax Rebates

City sales and use tax rebates may be available for prioritized Downtown development products, such as multifamily residential development and hospitality development. These rebates can be qualified up to the following standards:

  • Sales and use tax rebate on construction materials: 50% of the City’s 2% General Fund portion
  • Sales and use tax rebate on annual purchases of business personal property: 50% of the City’s 2% General Fund portion
  • Alternative rate of tax on machinery and equipment: Sliding scale of sales and use tax on large purchases of manufacturing equipment
    • $0 to $5 million – 2.5% (No reduction)
    • $5 to $7.5 million – 2.0%
    • $7.5 to $10 million – 1.5%
    • $10 to $15 million – 1.0%
    • $15 to $20 million – .5%
    • $20 million and above – 0%
  • Retail sales tax rebate: 50% of the City’s 2% General Fund portion. Criteria:
    • Unique retailer to the Colorado Springs trade area
    • Reduces sales tax leakage
    • Increases sales tax surplus
    • Contributes to the revitalization of strategic geographic areas of the city targeted for redevelopment

Contact: Bob Cope, Economic Development Manager, City of Colorado Springs, 719-385-5561, bcope@springsgov.com

New Market Tax Credits

New Market Tax Credits (NMTC) are available in qualified census tracts throughout the country. Most of Downtown, south of Boulder Street, falls within a qualified census tract. These tax credits are highly competitive, but can be effective in providing equity to a project as the tax credits are sold. NMTCs must be applied for through Community Development Entities (CDEs), and developers should contact these authorities several years prior to breaking ground on a project. Developers can work with the Colorado Housing and Finance Authority (CHFA) and the Colorado Enterprise Fund in the State of Colorado to apply for these credits, and it is recommended that those considering NMTCs work with an experienced consultant. Downtown Partnership staff can provide recommendations for NMTC consultants to interested parties.