Today, Governor Polis and the Global Business Development Division of the Colorado Office of Economic Development & International Trade (OEDIT) announced the CHIPS Refundable Tax Credits Program to aid Colorado companies in securing federal funding available through the CHIPS and Science Act. This funding will support the development of the semiconductor and advanced manufacturing industries within Colorado, creating new good-paying jobs and contributing to a strong, diversified economy.
“Colorado's strong economy and top-notch workforce make us the best home for the growing semiconductor and advanced manufacturing industries — we continue to put Colorado in the best position to maximize federal funding. This exciting initiative is the latest step we are taking to make Colorado the best place to live, work, and do business,” said Gov. Jared Polis.
Established by HB23-1260, the CHIPS Refundable Tax Credits Program grew out of recommendations from a CHIPS Task Force established by Gov. Polis. The program modifies existing state economic development tools and adds new ones to support the specific needs of the semiconductor industry and advanced manufacturing. Each year for the next five years, $15 million in refundable tax credits will be available for semiconductor and advanced manufacturing companies, reviewed and approved by the Colorado Economic Development Commission (EDC).
Within Colorado, the semiconductor industry is poised for growth. The Semiconductor Industry Association places Colorado in the top 10 states with the resources and business ecosystem to support a strong semiconductor industry. In addition to major fabrication facilities, Colorado businesses support the entire semiconductor value chain from chip design and materials to fabrication and packaging.
As companies respond to funding opportunities through the CHIPS and Science Act, many stable, technical and good-paying jobs that support families will be created, along with opportunities for employees to develop new skills. Through the CHIPS Refundable Tax Credits Program, the Polis Administration will help companies capture these funds for expansion in Colorado’s semiconductor and advanced manufacturing industries.
“The federal funding available through the CHIPS and Science Act represents a once-in-a-generation opportunity,” said OEDIT Executive Director Eve Lieberman. “As a state, we are deploying new tools to ensure we capture the growth it generates and assist Colorado companies as they unlock this federal funding for expansion or relocation in Colorado and create good-paying jobs for Coloradans.”
The EDC will prioritize the semiconductor industry for the first two fiscal years and then expand to include advanced manufacturing industries. Priority will also be given to companies seeking to leverage funding available through the CHIPS and Science Act, American Rescue Plan Act (ARPA), and other federal programs.
“Colorado’s semiconductor industry is poised for explosive growth, and securing federal awards for the semiconductor industry will augment our existing capabilities and expand our contribution to enhancing national security while supporting a strong economy at home,” said Michelle Hadwiger, Director of OEDIT’s Global Business Development Division.
Through the CHIPS Refundable Tax Credits Program, five Enterprise Zone tax credits and the Job Growth Incentive Tax Credit will be refundable up to 80% of their value. Municipalities, counties or regions of Colorado that are not already located in an Enterprise Zone may also opt to establish a state-designated CHIPS Zone, enabling qualified semiconductor companies to access similar incentives that support increased investment and growth. Like existing incentives, these will be performance based—a hallmark of Colorado incentives that ensure they are earned by participating companies.
“Chips and electronics power nearly every aspect of modern life and are the enabling technology behind many products and services we use every day. The companies we typically identify as ‘semiconductor companies’ are only one part of a diverse ecosystem that brings these products to bear, and the CHIPS Refundable Tax Credits Program supports the unique needs of this industry by adding value to existing incentive programs,” said Semiconductor Industry Manager Dan Salvetti.
Salvetti, who was promoted into the newly-established role of Semiconductor Industry Manger in May 2023, will support the continued growth of Colorado’s semiconductor industry and play a key role in implementing the CHIPS Refundable Tax Credits Program. He will also support collaborative efforts across the state to secure Colorado’s designation as a Tech Hub by the Economic Development Administration (EDA).
Applications for the CHIPS Refundable Tax Credits Program are open and being accepted on a rolling basis. On July 20, 2023, the EDC approved the first application for a state-designated CHIPS Zone in Fort Collins.