FINANCIALS & INCENTIVES
Build Your Business in the West End
Due to its rural environment, the State of Colorado offers advantageous funding opportunities and tax incentives for anyone starting or operating a business in the West End in Montrose and San Miguel counties.
The West End of Montrose County is designated as an Enhanced Rural Enterprise Zone, which provides greater financial incentive to businesses to promote and encourage new job creation in designated economically lagging rural Enterprise Zone counties.
Businesses located in an EREZ may qualify for the following state income tax credits. The credits are in addition to those granted to businesses in a standard Enterprise Zone (listed below).
|BUSINESS INCOME TAX CREDITS
EREZ Business Facility Credits
|CREDIT AMOUNT||DOR FYI|
|EREZ – New Employee Credit||$2,000 per new job||Reference FYI Income 10|
|EREZ – Agricultural Processor new Employee Credit||$ 500 per new job||Reference FYI Income 10|
ENTERPRISE ZONE TAX CREDITS
Investment Tax Credit: Businesses investing in Enterprise Zones through business personal property can earn a 3% tax credit. Special rules for renewable energy equipment apply.
Job Training: Companies that implement a qualified job-training program for their enterprise zone employees may earn an income tax credit of 12% of their eligible training costs.
New Employee Credit: Businesses increasing their workforce may earn a state income tax credit of $1,100 per net new employee.
Agricultural Processor: An additional tax credit of $500 per net new employee may be claimed by businesses adding value to agricultural commodities through manufacturing or processing.
Employer Sponsored Health Insurance: Offers businesses $1,000 per net new employee insured under a qualified health plan for which the employer pays at least 50% of the cost. This credit is available for the first two years the business is located in an enterprise zone.
Research and Development Tax Credit: Businesses conducting research and development may earn a 3% tax credit on the increase in such expenditures as compared to that of the prior 2 years.
Vacant Commercial Building Rehabilitation: Encourages the redevelopment of vacant commercial property with a 25% credit for the cost of rehabilitation of a building that is at least 20 years old and has been completely vacant for at least 2 years. The credit is limited to $50,000 per building.
Commercial Vehicle Investment Tax Credit: Investment in commercial trucks, truck tractors, tractors or semitrailers, and associated parts registered in Colorado and based and used in an Enterprise Zone may ear the taxpayer a 1.5% credit.
Contribution Projects: Enterprise Zone (EZ) Contribution Projects encourage community participation and public-private partnerships to revitalize EZs. EZ Administrators may propose projects for EZ Project status to implement the economic development plan of that specific EZ. 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 may earn a 25% state income tax credit by contributing to targeted efforts. West End Economic Development Corporation is a Certified Enterprise Zone Contribution Project.
APPLYING FOR ENTERPRISE ZONE BUSINESS TAX CREDITS
Pre-Certification: Businesses wanting to claim any of the Colorado Enterprise Zone (EZ) income tax credits (excluding the Contribution Project credit for which pre-certification is not required), must ANNUALLY pre-certify with their local EZ Administrator to be eligible to claim EZ tax credits. Pre-certification can be completed up to three months in advance of the business’ tax year start date. Pre-certification is approved by the Local EZ Administrator. Pre-certify each business location as credits are only available for business activity in an Enterprise Zone.
The Enterprise Zone Administrator for the West End is Trish Thibodo, Region 10, firstname.lastname@example.org.
Certification: A business having pre-certified, and then conducted activities that are eligible for EZ credits, must then complete a certification application and received approval from the local EZ Administrator. Certification documents must be submitted with your Colorado income tax filing. The Certification document from the State of Colorado’s application system takes the place of DOR forms DR0074, DR0076 and DR0077. Instructions for Pre-Certifications and Certification of EZ tax credits can be found at HERE.
CONTRIBUTE TO AN ENTERPRISE ZONE ECONOMIC DEVELOPMENT PROJECT
Enterprise Zone Contribution Projects are managed by local Zone Administrators to encourage public private partnerships to improve the economy for the benefit of the broader Enterprise Zone. Contribution Projects aim to focus community engagement on an economic issue or opportunity to elicit a shift and accomplish a targeted economic development goal within a defined time period.
Enterprise Zone Administrators are focused on managing this program with a strong ethic and focus on job creation/retention and business expansion in the Enterprise Zone.
West End Economic Development is a certified Enterprise Zone Contribution Project, with tax credits allocated through December 31, 2022.
Enterprise Zone Contributions follow Federal Charitable Contribution rules (IRS Publication 526). A taxpayer (individual or business) must make a donation to an approved Enterprise Zone Contribution Project. Provide the charitable organization with your Employer Identification Number or the last 4 digits of your Social Security Number. The project will provide the taxpayer with a Certificate documenting their contribution. Contact the Project Organization or the local Zone Administrator with questions.
The taxpayer may claim the tax credit when filing state income taxes for the year in which the donation was made (review Colorado Department of Revenue Form DR1366 for further info).
The West End Enterprise Zone is managed by Region 10, League for Economic Assistance and Planning.
Zone 13: Region 10 Enterprise Zone
Counties include: Delta, Gunnison, Hinsdale, Montrose, Ouray and San Miguel
Trish Thibodo, Enterprise Zone Administrator
Region 10 League for Economic Assistance
145 S Cascade Avenue
Montrose CO 81401
The state income tax in Colorado is assessed at a flat rate of 4.63%, for both corporate and individual tax, which means that everyone in Colorado pays that same rate, regardless of income level.
Colorado’s 2.9% sales or use tax on goods purchased by a business, that are not intended for resale, is the lowest among the 45 states that collect sales tax. Services are not taxed; only sales of non-food items or services specifically taxed by law. However, in the case of a mixed transaction, that involves a bundled sale of both tangible personal property and service (whether such service is specifically taxed), the entire purchase price may be taxable unless certain conditions exist. Use taxes substitute for sales taxes in cases where an item is purchased for consumption in Colorado from a source outside Colorado or in circumstances where a sales tax was not paid. Colorado imposes sales tax on retail sales of tangible personal property.
The Colorado Department of Revenue administers not only state sales tax, but also the sales taxes imposed by a number of cities, counties, and special districts.
However, the Department does not administer and collect sales taxes imposed by certain home-rule cities, which instead administer their own sales taxes. Combined sales tax rates average between 6.5% and 8% statewide (varies by specific location).
|Sales Tax||Use Tax|
|San Miguel County||1.0%||1.0%|
Source: Colorado Department of Revenue, 2021
|Overall Rank||18 (+0)||5.19|
|Corporate Taxes||16 (+0)||5.47|
|Individual Taxes||14 (+0)||5.88|
|Sales Taxes||38 (+0)||4.12|
|Property Taxes||12 (+0)||5.60|
|Unemployment Insurance Taxes||40 (+0)||4.59|
Tax Foundation – Overall Rankings, 2019
The State of Colorado does not impose property taxes on business; local governmental units assess property taxes to primarily fund public school operations and local government services. Commercial and industrial property, and personal property (machinery and equipment) used in commercial and industrial operations is assesed for property tax purposes at 29% of market value. Montrose County-wide average of local mills levies is 54.902 mills.
Residential property is assessed at 7.96% of market value and it fluctuates from year to year due to a statutory formula that specifies shares of revenue from commercial versus residential property.
|MILL LEVY (Collected by County)|
|Montrose County General Fund||20.528||20.528||—||20.528||20.528|
|Montrose County HHS||3.000||3.000||3.000||3.000||3.00|
|Nucla-Naturita Fire District||5.500||5.500||—||—||—|
|Paradox Fire Protection District||—||—||—||7.000||—|
|Norwood Fire Protection District||—||—||10.600||—||10.600|
|Nucla-Naturita Cemetery District||0.638||0.638||—||—||—|
|Southwestern Water District||0.407||0.407||—||—||0.407|
|San Miguel Water District||—||0.112||0.112||—||0.112|
|West End Public Schools – RE2||26.727||26.727||—||26.727||26.727|
|Norwood Schools – R2J General Fund||—||—||15.361||—||15.361|
|Norwood Schools – Bond & Interest||—||—||6.830||—||6.830|
|Montrose County Library District||—||3.850||—||3.850||3.850|
Source: Montrose County Assessor, 2019