Summary
Colorado Revised Statute 39-30.5-106 (PDF) gives any county, municipality, or special district the power to exempt from its levy and collection of property tax up to 100 percent for the property tax year commencing on January 1, 2021.
In order to attract new enterprises, any municipality may negotiate an incentive payment or tax credit. However, the amount shall not exceed the amount of taxes levied by the municipality per Colorado Revised Statute 31-15-903 (PDF).
Overview
Type: Tax waiver
For: Business Personal Property Tax
OEDIT division: Business Funding and Incentives
In addition to powers listed in Statute 39-30.5-106 and Statute 31-15-903, under TABOR local taxing entities "may enact cumulative uniform exemptions and credits to reduce or end business personal property taxes" (Article X, Sec. 20 (8)(b)).
Local governments can enact incentive payments or property tax rebates related to economic development. A county, municipality, or special district can enter into negotiations for an incentive payment with owners of new business facilities.
A county, municipality, or special district may also negotiate an incentive payment or credit with owners of existing business facilities, located in their jurisdiction, based on verifiable documentation demonstrating that there is a substantial risk that the owner of the existing business facility will relocate it out of state. The incentives cannot exceed 100 percent of the personal property taxes paid to the county, municipality, or special district.
For agreements made prior to August 6, 2014, the agreement cannot last more than ten years. For agreements made after August 6, 2014, the agreement may not last longer than thirty-five years. For further information on the exemption rules regarding business personal property tax, please refer to Statute 39-3-119.5.
Certain local taxing entities in Colorado already provide business personal property tax incentives, such as El Paso County and the City of Colorado Springs.
In some cases, such as the Rural Jump-Start program, it is required that a local taxing entity waive business personal property tax, with the intent of bolstering economic activity in the region. Please contact the Program Manager for questions regarding a specific program’s requirements.
The information provided below is courtesy of OEDIT. The Colorado Department of Revenue (DOR) is the final determination of decisions. Any discrepancies should be addressed by DOR. Additional information can be found on the Colorado Department of Revenue's (DOR) website.
The following products and services are all exempt from state sales and use tax:
| Name | Description | Link |
|---|---|---|
| Farm Equipment/ Seeds, Plants and Trees, Pesticides | Certain items of tangible personal property used for agricultural purposes | Sales & Use Tax Topics: Agriculture (PDF) |
| Manufacturing | For businesses that manufacture tangible personal property for the purchase of 1) Ingredients and component parts 2) property brought into Colorado temporarily for testing, modification, or inspection 3) Gas, electricity, and other fuels 4) Machinery and Machine tools | Sales & Use Tax Topics: Manufacturing (PDF) |
| Space Flight | Tangible Personal Property to be placed or used aboard a space vehicle, Space vehicles, Fuel of a quality that is used exclusively for space flight | House Bill 14-1178 (PDF) |
| Aircraft and Aircraft Parts | Aircraft used in interstate commerce by a commercial airline and parts permanently affixed to aircraft | Sales Tax Exemption on Aircraft and Aircraft Parts (PDF) |
| Affordable Housing | Housing authorities are eligible for sales/use tax exemption on the purchases and property acquired during the construction process for qualified affordable housing or mixed income housing projects | Sales/Use Tax Exemption for Affordable Housing Projects (PDF) |
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