Denver’s Tax Credit & Workforce Services

1. Denver’s Tax Credit & Workforce Services Denver Economic Development & Opportunity Joanne Greek/ Rachel Lyons/ Sarah Murphy

2. Introductions • If time permits, please share your name and a brief overview of your business. • Have you pre-certified or certified as a qualified business in Denver’s Enterprise Zone? (DEZ) • Have you participated in Denver’s Business Investment Program? (BIP)

3. DEZ Video • https://www.youtube.com/watch?v=SkE9UBMvQEY&feature=youtu.be OED EZ video https://youtu.be/SkE9UBMvQEY

4. Denver’s Enterprise Zone For a geographic location to have Enterprise Zone status, it must meet at least 1 of 3 economic distress criteria: • Per capita income <75% of state average • Unemployment rate 25% > state average • Population growth rate <25% of state average

5. Denver’s Enterprise Zone 18 Enterprise Zones throughout Colorado • Encourage businesses to locate and expand in economically distressed areas. • State of Colorado tax credit program that allows businesses located within a specific geographic area to receive tax credits against their state tax liability. • The City and County of Denver is a Home Rule Jurisdiction and administers its own sales and use taxes. • Companies that certify for Enterprise Zone credits are still responsible for all City taxes.

6. Colorado’s Enterprise Zones

7. Denver’s Enterprise Zone

8. Incentives for entrepreneurs & businesses of all sizes

9. Examples Rehabilitation of Vacant Building Credit

10. Examples Carry Forward

11. Impact of the Denver EZ Benefits of the EZ program to Denver in 2017: • $6,850,000 in EZ credits certified • Over 260 businesses completed certification • 65 manufacturers (25%) / NAICS Sector Code 20-39 • Over $195 million invested in Section 38 Property (FFE and inventory) • Businesses trained nearly 6,670 employees with $25 million spent on training • 454 new jobs created • $12 million increased investment in R&D • $6.74 million invested to revitalize vacant buildings for commercial use

12. Interactive MapEnterprise Zone • https://choosecolorado.com/doing-business/incentives-financing/ez/ • Enter the address of your business. The map will be shaded red if it is located within the Denver Enterprise Zone.

13. Pre-Certify IMPORTANT! • Pre-certify annually • Pre-certification can be completed up to 3 months in advance of the business' tax year start date • No cost or obligation to pre-certify https://choosecolorado.com/doing-business/incentives-financing/ez/

14. The Fine Print • The Department of Revenue provides FYI publications with further guidance on EZ credits. Please share with your tax advisor.

15. Enterprise Zone Contribution Projects • An additional way to earn EZ tax credits while giving back to the community • EZ – Contribution Projects: encourage community participation and public-private partnerships to revitalize EZs. EZ Administrators work with their communities to bring forward proposals that support local economic improvements, result in job creation/retention and business expansion, and have the support of the community. • Colorado taxpayers, including business entities, may earn a 25% state income tax credit for cash contributions to targeted efforts and 12.5% for in-kind contributions of goods or services. Example: Construction Co ABC donates $1,000 in materials to an organization building affordable housing units. Contact us for a list of EZCP partners in Denver

16. Manufacturing Equipment States Sales Tax Exemption • Purchases of machinery or machine tools and parts thereof are exempt from state sales and use tax when the machinery will be used in manufacturing. • The manufacturing exemption is expanded to exempt additional purchases from sales and use tax when machinery is used solely and exclusively in an enterprise zone. (example: materials for construction or repair of machinery is now eligible, mining operations, etc) • To qualify the machinery must be: Used in Colorado, used directly to manufacture tangible personal property, meets federal definition of Section 38 property, is purchased at $500 or more • This exemption is for the State of Colorado taxes ONLY. The business still has tax liability with the City of Denver. • “The City and County of Denver is a Home Rule Jurisdiction and administers its own sales and use taxes. Manufacturing equipment located within the City and County of Denver is not exempt from municipal sales/use taxes.”

17. Manufacturing Equipment States Sales Tax Exemption Process to claim state sales tax exemption • Complete Enterprise Zone pre-certification • Complete form 1191. The seller must complete a section of this form. The seller keeps a copy. The other copy must be submitted to Dept of Revenue when you file your return. Retain a copy for your records 3) Dept of Revenue FYI Sales 10 publication/ provides additional guidance on eligibility 4) FYI Sales 90/ Sales & Use Tax Refund Request “If tax was paid on a purchase that qualifies for exemption, the purchaser may request a refund for the tax paid. See FYI Sales 90 for information regarding sales and use tax refund claims.” We have brought a limited number of these forms with us today. If you would like hard copies, please see us after the presentation.

18. Denver Enterprise Zone • Questions/Comments about the DEZ program?

19. Denver’s Business Investment Program • Tax credit on Business Personal Property tax owed to the City • Awarded annually to Denver businesses that are new, new to Denver or expanding in Denver • A business that invests $1 million in BPP can receive an estimated $12,000 in tax credits over a four-year period • A business investing $34,000 in BPP could still save nearly $400 in taxes over the four‐year period

20. Denver’s Business Investment Program Any Denver business that made a significant capital investment through a business start-up or expansion is eligible to apply if anyone of the following criteria are met. • Investment of at least $1 million in business expansion • Increased investment by at least 100% of the prior business capital level • Increase of at least 10 employees over the preceding 12-month average • Increase of at least 10% in employment over the preceding 12-month average

21. 88 Companies of all Sizes Proportionally beneficial to companies of all sizes and types. Smallest: 2 Largest: 1,450 Median: 44

22. Type of Investment Proportionally beneficial to companies of all sizes and types. Smallest investment:$7,500 Largest investment: $60m Median investment: $280k

23. Participation by Industry Type

24. Why a Business Investment Program? • Geographically neutral (i.e., not restricted to Enterprise Zones) • Proportionally beneficial to companies of all sizes

25. Apply • The application window for 2018 is closed. • 2019 applications will be available in early April. • Online application process (separate from the EZ portal). • Will send email reminder to those companies that express interest.

26. Questions? BIP Joanne Greek 720-913-1513 Joanne.greek@denvergov.org InvestinDenver@denvergov.org DEZ Rachel Lyons 720-913-1533 Rachel.lyons@denvergov.org

27. Thanks! • Thank you for attending! • Please share this information with family, friends and colleagues in the Denver business community!