The Aviation Development Zone Tax Credit helps create new jobs at businesses that do aircraft manufacturing, maintenance, repair, completion, or modification. Businesses can earn a state income tax credit of $1,200 per net new employee if the business or any part of the business is inside the boundaries of an aviation development zone airport.
If you cannot use all of your credits in a given tax year, you can carry forward the balance up to five years.
Eligible companies are involved in:
- aircraft parts production specifically used in the manufacture of aircraft
- proof of aircraft concept, prototyping, test and evaluation, certification or production
- aircraft maintenance and repair, completion, or modification
- unmanned aerial vehicles
Under current law, this program expires on January 1, 2024.
Approved aviation development zone airports include:
- Colorado Springs
- Fort Collins/Loveland
- Front Range
- Grand Junction
- Nucla Hopkins Field Airport
- Pueblo Memorial
- Rocky Mountain
- Stevens Field
Any airport in Colorado can be an aviation development zone airport if it is a public-use facility designated by the Federal Aviation Administration’s latest National Plan of Integrated Airport Systems.
Only the area in the boundaries of the airport is part of the zone. Eligible airports need to register for aviation development zone recognition.
The business claiming the tax credit needs to:
- employ at least ten employees that work at least 35 hours per week in the zone
- create net new jobs before requesting the tax credit
- be any type of business entity including LLCs, Partnerships, and S Corporations
- be new or existing
For businesses that open in the middle of a tax year, prorate the credit based on the number of full calendar months during the year that the business was in operation in the zone.
The number of employees at a qualifying business is calculated based on the annual change in the average number of employees on the last business day of each month during the tax year.
Airports can apply at any time for aviation development zone registration. Please contact the program manager to start the application process.
To claim this credit, file a signed Form DR 0085: Aircraft Manufacturer New Employees Credit Progress Report (PDF) with both:
- The Colorado Department of Revenue
- OEDIT's program manager (see below) – you can email it to us or mail us a physical copy