In 2009, the general assembly created a pilot income tax credit for investment in certain qualified businesses, which was called the Colorado innovation investment tax credit (tax credit). The tax credit is administered by the Colorado office of economic development (office), and it applied to qualified investments made in 2010. The creation of the tax credit was contingent on the office transferring sufficient moneys to backfill lost income tax revenue and to pay for the administration of the tax credit.
The bill makes the following changes related to the tax credit:
A limited amount of tax credits are available in 2011;
The amount of tax credits available in 2011 may increase and tax credits may be available in future years if there is additional funding to backfill lost income tax revenue and to pay for the office's administration of the tax credit;
The state treasurer must transfer a portion of the additional funding to the general fund to backfill lost income tax revenue related to the tax credit;
If such additional funding is available, the office must provide notice on its web site of the amount of the additional tax credits that are available;
The requirement that a qualified small business has at least 2 nonadministrative, full-time equivalent employees who are residents of the state is eliminated;
The operation requirement for a qualified small business is modified so that only times of active operation are considered when determining eligibility;
The deadline for submitting an application for a tax credit is extended by 60 days;
The cap on the tax credit is clarified to apply only per investment, as opposed to per taxpayer; and
The deadline for the office to provide the department of revenue an electronic report relating to the tax credit is extended by 3 months.
