The Enterprise Zone New Business Facility Employee Credits are:
- The new business facility employee credit.
- The new business facility agricultural processing employee credit.
- The employer-sponsored health insurance credit.
The New Business Facility Employee Credit
Any taxpayer who establishes a new business facility in an enterprise zone can claim an income tax credit of $500 for each new business facility employee who is working within the zone prorated according to the number of months of employment during the tax year. Forsubsequent 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. [39-30-105 C.R.S.]
For tax years beginning on or after January 1, 1993, the excess credit is not refundable but may be carried forward for a period of up to 5 years.For tax years beginning on or after January 1, 2003, an additional $2,000 credit for each new business facility employee is available to businesses located in an enhanced rural enterprise zone. Theenhanced portion of the new business facility employee credit not used to offset tax can be carried forward for a period of up to 7 years.
The New Business Facility Agricultural Processing Employee Credit
If a new business facility established by a taxpayer in an enterprise zone on or after January 1, 1989 is engaged in a business which adds value through manufacturing or processing to agricultural commodities, an additional credit of $500 per new business facility employee is allowed. The enterprise zone new business facility agricultural processing employee credit is computed the same as is the enterprise The enterprise zone new business facility agricultural processing employee credit is available only to businesses that are directly engaged in manufacturing or processing agricultural commodities into some form other than that which enters normal agricultural commodity marketing channels. Harvesting, cleaning, packaging, storing, transporting, wholesaling, retailing, or otherwise distributing products without changing their form does not qualify. Businesses that package and ship commodities as well as restaurants or food retailers do not qualify for this credit.
The Employer-Sponsered Health Insurance Credit
For the first two full income tax years while located in an enterprise zone, taxpayers are allowed a credit of $200 for each new business facility employee insured under a health insurance plan or program at least 50% of the cost of which is paid by the taxpayer. Such plan or program may be any health insurance, health maintenance organization or prepaid health plan that is approved by the State Insurance Commissioner for sale in Colorado or it may be a self-insurance program. The program must be reduced to writing and it must be legally enforceable against the taxpayer. [39-30-105 (1)(b) C.R.S.]
For tax years beginning on or after January 1, 1996, the excess credit is not refundable but may be carried forward for a period of up to 5 years.