Rates for tax credits vary depending on the property’s location. If the business receiving the investment operates in an enterprise zone or rural county, the tax credit to the investor is 35% of the qualified investment, up to the $100,000 maximum allowable tax credit amount.

The business needs to get their Enterprise Zone Pre-Certification number to qualify for enterprise zone status. Businesses can become pre-certified for free by applying through the OEDIT application portal.

The following are considered rural counties for the Advanced Industry Investment Tax Credit program: Alamosa, Archuleta, Baca, Bent, Chaffee, Cheyenne, Clear Creek, Conejos, Costilla, Crowley, Custer, Delta, Dolores, Eagle, Elbert, Fremont, Garfield, Gilpin, Grand, Gunnison, Hinsdale, Huerfano, Jackson, Kiowa, Kit Carson, La Plata, Lake, Las Animas, Lincoln, Logan, Mesa, Mineral, Moffat, Montezuma, Montrose, Morgan, Otero, Ouray, Park, Phillips, Pitkin, Prowers, Pueblo, Rio Blanco, Rio Grande, Routt, Saguache, San Juan, San Miguel, Sedgwick, Summit, Teller, Washington, and Yuma.

Business Qualification Requirements

For a business to be a qualified investee in this tax credit program, it needs to:

• Be a corporation, partnership, LLC, or other business entity (individuals do not qualify).
• Manufacture an advanced technology and influence one or more of Colorado’s advanced industries, which include advanced manufacturing, aerospace, bioscience, electronics, energy and natural resources, infrastructure engineering, and information technology.
• Have headquarters in Colorado or have at least 50% of employees based in Colorado.
• Be registered with the Colorado Secretary of State and in Good Standing.
• Have received less than $10 million from third-party investors since the business was formed.
• Have annual revenues of less than $5 million OR have been actively generating revenue for less than five years.

If your business has less than 50% of its employees in Colorado, you will need to provide documentation to certify your business is eligible based on location.

Such documentation must:

• Be on business letterhead, signed by the CEO or other officer with similar authority.
• Provide the titles and functions of all employees identifying where such positions are employed (Colorado or other state or country).
• Include the statement, “I attest that (Business Name) is headquartered in Colorado, and that (identify individuals) work in Colorado on behalf of the business and are responsible for executive orders and key policy decisions.”

Advanced Industry Determination

When determining if a business is in an advanced industry, OEDIT will look at the following factors:

• Is the company advancing the industry or advancing the state of the art?
• What is the company’s intellectual property strategy?
• Do they hold or are they applying for patents, or do they have trade secrets?
• Does the company perform Research & Development?
• What percent of employees are in STEM-related fields? 

Recertification

AITC program certification is valid for 365 days. Businesses will need to recertify on an annual basis. We encourage certified businesses to submit their recertification application eight months into their certification period to make sure there is no risk of a lapse in their certification. Processing recertification applications can take up to 90 days, and thus we encourage founders to submit their recertification application with plenty of time. 

Recertification applications can be found on the AITC application portal—click on the AITC drop-down tab and click on “Investee Full Certification”, then scroll down and click on recertifying, which will take you to the recertification application.

Ongoing Eligibility

Please note, it is required of AITC-certified businesses to monitor their own eligibility. If/when a business surpasses the eligibility criteria, it will immediately become ineligible for AITC. For example, once a business has raised $10 million from third-party investors, it becomes ineligible. Or, once a business, when reviewing their year-end financials, has surpassed $5 million in revenues and has generated revenues for 5 full years, it becomes ineligible.

Any investments made in a business after the business becomes ineligible will not qualify for a tax credit. Businesses shall notify the office within thirty days from the date that it no longer meets the qualifications, however penalties may apply starting the very day the business is no longer eligible. If the certification is revoked, the office may assess a penalty against the business that is equal to the amount of the tax credits authorized after the date the business no longer meets the qualifications. Therefore, the business must keep the eligibility criteria in mind when conducting business and working with potential investors.

New Reporting Requirements for AITC Certified Businesses

House Bill 25-1157 introduced new ongoing reporting requirements for businesses that receive a qualified investment. 

A qualified small business that receives a qualified investment shall report data relevant to the impact of the tax credit and the development of the qualified small business annually to the Office for a five-year period following an initial qualified investment. Qualified small businesses that have been certified and wish to keep their certification active must also submit an annual impact report. The Office will notify relevant companies about the annual impact report. Companies must submit the requested report within 45 days of the report notification email having been sent.

Important Note on Compliance: If a business's certification is revoked or a business fails to meet its reporting requirements, the Office may assess a penalty against the business equal to the amount of the advanced industry investment tax credits authorized after the date that the business no longer meets the qualifications, or for the years of reporting-non-compliance. If a certification is revoked, subsequent investments in that business do not qualify for a tax credit. However, all tax credits issued before the date of the revocation remain valid, and the Office shall not deny any application for a tax credit if the investment was made before the date of the revocation. 

Further details on the specific data to be reported and the submission process will be communicated by the Office. Businesses are encouraged to maintain thorough records related to the impact of the tax credit and their development.

To be eligible for this tax credit as an investor, you need to:

• The investment must be made in a certified Advanced Industries company. The company must have officially been approved and certified by our company prior to the investment being made.
• Be a third-party or unaffiliated investor.
  • Founders are ineligible; a founder expresses company control. Co-founders are affiliates of each other, and are excluded from receiving a tax credit. 
• Hold less than 30% voting power when combined with affiliates, immediately before investment and less than 50% voting power when combined with affiliates, immediately after investment
  • An affiliate is defined as any person or entity that controls, is controlled by, or is under common control with another person or entity. Affiliates include investment partners, business managers, and family members including spouses, siblings, children, and parents.
• Invest at least $10,000
• Invest in common stock, preferred stock, interest in partnership, interest in LLC, equity security, SAFE, or convertible debt instrument
• Be an eligible entity type including individual, LLC, partnership, S-corp, or Trust. C-corps are not eligible. 
• Have a different federal employer identification number or taxpayer ID from the company accepting your investment
• Couples investing together and filing a joint tax return will be treated as a single taxpayer. Please submit the application using the name and SSN of the individual normally listed as the primary taxpayer.
• State that the tax credit was a significant factor in your decision to make the investment and that without the tax credit, you would not have made the investment or would have made the investment at a substantially lower level
• Not have previously earned a tax credit for an investment in the same qualified small business. However, investors can receive credits for investing in multiple different companies.
  • Clarification on Tax Credit Limit: The total amount of the tax credit for each qualified investment in a qualified small business shall not exceed $100,000. For partnerships or S corporations that make a qualified investment, the aggregate amount of the credit allowed to all partners or shareholders combined must not exceed $100,000. This $100,000 limit applies regardless of whether the qualified investment is made directly by the qualified investor or indirectly through another entity. A qualified investor may still be eligible for a tax credit for qualified investments in different qualified small businesses in the same or a different year.
• An investment made in tranches may count as a single investment if those payments were made within 90 days and within the same calendar year of the first investment date
• Submit a completed application for a tax credit for an investment in a certified advanced industries small business within 90 days of the investment date (the date the business received your investment). Note that a complete application includes the portal activation, pre-application, and complete investor application.

Please note that new investor eligibility requirements will go into effect on January 1, 2025.

Pass-through Allocations

Investors belonging to pass-through entities may allocate their earned tax credit among the entities' partners, shareholders, members, or other constituent qualified investors in any manner agreed to by such qualified investors. OEDIT will issue tax credit certificates to each constituent qualified investor for the appropriate amounts.

Both the business and the investor need to apply separately for this program. Businesses can apply at any time and we encourage businesses to apply as soon as they are considering raising funds.

Follow these steps to apply as an investee for this program.

1. Complete the Investee Pre-certification on the OEDIT application portal.

• Log in to your account or create a new account. To protect your personal information, we manually add new users to the portal, so it may take several days to activate your account.
• Select "Advanced Industries Programs."
• Complete the AI Tax Credit Investee Pre-Certification to prove eligibility.

2. Complete the Investee Certification on the OEDIT application portal.

• If you receive preliminary approval on your pre-certification, you will receive access to complete the AI Tax Credit Investee Certification.
• You will be asked to upload these documents with your application:
  • certificate of Good Standing from the Colorado Secretary of State
  • proof of business organization including articles of incorporation, certificate of partnership
  • most recent year-end balance sheet
  • All year-end income statements or income tax filings from formation
  • Advanced Industry Tax Credit Investee Worksheet, (Google Doc)
  • investment term sheet
• You will receive an email once your certification has been approved.
• Please note that it will likely take a few days to activate your account, and can take up to 90 days to process your certification application. Please plan accordingly with your investors based on this processing timeline. 

Both the business and the investor need to apply separately for this program.

Investors may only apply after the business they'd like to invest in has submitted their AITC application and been certified as an eligible business.

Follow these steps to apply as an investor for this program.

1. Complete the Investor Pre-Qualification on the OEDIT application portal.
   1. Apply within 90 days of a qualified investment.
   2. Log in to your account or create a new account. To protect your personal information, we manually add new users to the portal, so it may take 1-2 days to activate your account.
   3. Select "Advanced Industries Programs."
   4. Complete the AI Tax Credit Investor Pre-Qualification to determine preliminary eligibility.
2. Complete the Investor Application on the OEDIT application portal.
   1. Please be aware that there are three parts to a complete application
      1. The portal activation, which registers you within our system, allowing you to apply (this process can take 1-3 business days to approve)
      2. The pre-application, which only determines preliminary eligibility
      3. The full application, which calls for more detailed information and confirmation of the investment. We will make a determination based on the completion of the full application. 
   2. If you receive preliminary approval on your Pre-Qualification, you will receive access to complete the AI Tax Credit Investor Application.
   3. Investors that are part of pass-through entities will apply differently based on how they choose to allocate their tax credit to awardees:
      1. If a qualified investor is a pass-through entity and will be allocating their earned tax credit pro rata, they may use the AI Tax Credit Investor Application to assign the full tax credit to the pass-through entity.
      2. If a qualified investor is a pass-through entity and will be allocating their earned tax credit non-pro rata, in addition to the AI Tax Credit Investor Application, they must use the AI Tax Credit Pass-Through Application to allocate the tax credit amongst awardees.
      3. If a qualified investor is a pass-through entity, will be allocating their earned tax credit non-pro rata, and has 20 or more tax credit awardees, in addition to the AI Tax Credit Investor Application that assigns the full tax credit to the pass-through entity, they must also complete an Awardee Allocation Spreadsheet to notify the office of how they plan to allocate their earned tax credit to awardees.
   4. You will be asked to upload these documents with your application:
      1. Proof of funding in PDF format, such as a cancelled check, bank statement, and/or a screenshot of bank account activity. 
         1. Each of these documents should show all of the following on the same verification document. If any of the following are missing, your application will be delayed and we will have to wait until another financial verification document with all of these items is sent to our team. The verification document must include:
            1. Investor’s name (name of investing individual or entity).
            2. The name of the business you invested in.
            3. The date of the investment.
            4. The funding amount.
   5. You will receive an email with the determination of your application.
   6. Please note that it will likely take a few days to activate your account, and can take up to 90 days to process your investor application. Please plan accordingly. 
3. File Colorado income taxes and include certification documents.

Company/Investee

• Can I participate in this program if our company is registered in Delaware?
  • Yes, many of the companies that are part of the AITC program are registered in Delaware. However, you must meet the Colorado location requirements listed in the Business Qualification Requirements section.
• How long does processing the application take after I submit? 
  • Please plan for the application process to take 45-90 days. Our team will reach out to you if we have any follow up questions about your application, or if we require additional information.

Investors

• What common issues slow down the application process?
  • The biggest issue for investors is not submitting the right financial verification documentation. The documentation you submit should be documentation that shows that the payment was sent to/received by the AITC Certified Business (examples: check, wire documentation, etc).
  • The validating document must include all of the following on the same document:
    • The date of the transaction.
    • The investor name (as submitted in the investor application).
    • Name of the AITC Certified Business.
    • Amount of payment made.
• How long does processing the application take after I submit? 
  • It often takes 45-90 days for the application to be processed. You will likely not hear from us for many weeks, and we’ll only reach out if anything is missing from your application, or we require any additional clarification.
• How many parts are there to the application?
  • There are three parts to the application:
    • Step 1) Portal Activation: This creates your account in our system.
      • Note: It can take up to 48 business hours to get your account activated, so please do not wait until the last hour of the 90-day investment period to get your application in. We’ve had a number of investors not be qualified because they missed the 90 day window because they waited until the last minute to submit their investor application.
      • Portal Registration Organization Name: We often receive questions about this step of the process. If you are investing as an individual, simply add your full name (even though the field says “organization name”), as this will create your investor account. If you are an organization, or if you are filling the application out on behalf of a client, please add the name of the Investor here (full name of individual or name of the investing entity).
        • Organization name matches:
          • If you are an individual, you will click on “my organization is not shown” and then you will provide additional information to complete your account.
          • If you are an organization and have not invested before, you will likely also click on “my organization is not shown” and then you will provide additional information to complete your account.
      • Typically within 1-3 business days, you will receive an email confirming your OEDIT Portal Account is active. At this point, you will be able to proceed with the application process.
    • Step 2) Pre-Application
      • After your account has been activated via the portal activation, you will work on your pre-application. This should only take a few minutes to complete and the application will provide a determination. If your pre-application is approved, you will be notified and receive a PAR number that you will need to use for your full application.
    • Step 3) Investor Full Application
      • You will want all of your application materials available to submit the full application. Once you submit a completed application, you will receive an email confirming your application was submitted. From that point, it can take 45-90 days for your investor application to be processed, and will likely not hear from the AITC team for some weeks.
• Can I submit an application if I’m an individual/sole proprietor?
  • Absolutely. Many, if not most, of our investors are individuals making early-stage investments in AITC certified companies. Please add your full name in the “organization name” field. We often receive questions about the  “organization name” field in the portal activation section of the application. For individuals/sole proprietors, please add your full name, and then click next. At that point you will click on the option “my organization is not shown” and that will allow you to create a new account based on your full name.
  • If you are filling out the application on behalf of someone else, please add the investor's full name. We will use your email and phone number to reach out to you if there were to be any follow-up questions about the application.

General

• Do you have any resources for us to learn more?
  • Yes, we encourage you to learn about the many OEDIT resources available by watching our Funding Your Early-Stage Colorado Startup Webinar.
• Until what date is the AITC program legislatively authorized?
  • HB 25‑1157 extended the AITC program through Jan 1, 2032, which means investor applications can be received through October 1, 2031.

AITC Reauthorization Bill Changes

• What changes will be implemented starting Aug 7, 2025?
  • Investor side changes
    • Trusts
      • While trusts were considered on a case-by-case basis, going forward trusts will be allowable investment entities.
    • Investment in AITC certified business
      • Going forward, investments will only be qualified if made in a company that has already been certified by the AITC program. Submitting an application for AITC certification does not suffice for certification or recertification.
    • Aggregate tax credit clarification
      • Clarification was added that aggregate tax credit for qualified investors can't exceed $100K; applies regardless of direct or indirect investment.
  • Companies looking to be AITC certified, or already certified
    • New reporting requirements (please visit the “New Reporting Requirements for AITC Certified Businesses” section of this page)
      • A qualified small business that receives a qualified investment shall report data relevant to the impact of the tax credit and the development of the qualified small business annually to the Office for a five-year period following an initial qualified investment. Qualified small businesses that have been certified and wish to keep their certification active must also submit an annual impact report. The Office will notify relevant companies about the annual impact report. Companies must submit the requested report within 45 days of the report notification email having been sent.
  • General
    • Starting in calendar year 2027, the tax credit pool will be $2.5M rather than the current $4M.