Investing in community development projects in low income communities can bring taxpayers one step closer to receiving a credit toward their federal income tax. By utilizing the New Markets Tax Credit, low income communities benefit.New Markets Tax Credits (NMTC) promote economic development in rural and urban low-income communities by increasing the amount of investment capital available. The City of Denver, in partnership with the Colorado Housing and Finance Authority and the Colorado Enterprise Fund, offers New Markets Tax Credit financing through the Colorado Growth and Revitalization (CGR) Fund, a community development entity. Since 2005, the CGR Fund has used $75 million NMTCs to help finance projects in underserved communities throughout Colorado.
A tax credit is a reduction of a tax bill. This tax credit is specifically for investing in business personal property, including eligible machinery, equipment, furniture, and other items related to a commercial or industrial operation between years 2012 and 2016. NOTE: Replacement equipment is not eligible.
Businesses that invested in new or expanded operations in 2013 may now apply to participate in the Business Investment Program. Businesses can apply for a credit in the amount of the Denver General Fund portion of their taxes on business personal property for up to four years, starting when the property is placed in service. Investments made in subsequent years require a separate application.
Businesses located within the City and County of Denver, through a business start-up or expansion, that made significant capital investments are eligible to apply. For businesses established prior to 2013, you also meet at least ONE of these growth requirements for 2013.
NOTE: Small business owners with business personal property valued at $7,000 or less might already be exempt from personal property tax, in which case this program is not applicable. To confirm whether your small business is exempt, call the Assessor’s Office at 720.913.4067.
It reduces your tax liability for a four-year period, which saves your business money. For example, a business that invests $1 million in a new piece of equipment for a manufacturing process can receive an estimated $12,000 in tax credits over the four-year agreement period.
But you don’t have to invest in $1 million in capital equipment; as another example, a business investing $34,000 in new furniture and equipment could still save more than $400 in taxes over the four-year period--provided that it meets one of the other growth requirements mentioned above.
There is an application required, but you’re compiling information about your business year already, so applying for this tax credit will not represent an additional paperwork burden. It’s Denver’s way of recognizing that you’re growing your business and Investing in Denver . . . and voters’ way of saying thanks!
The Application Package, including instructions and the Application Form for 2014, will be available in Spring 2015 (downloadable from this page).
Note that submitting your application for this tax credit does not substitute for your annual filing of a Personal Property Declaration Schedule with the Assessor’s Office.
Eligibility for the tax credit will be determined by compliance with Chapter 53, Article XVI, D.R.M.C.
Please direct inquiries you may have on the tax credit to InvestinDenver@denvergov.org. If necessary, program staff may be contacted at 720.913.1721.
Thanks to Denver voters’ approval in November 2012 of ballot Measure 2A, the City and County of Denver is delivering a smart, forward-thinking community that is built on a solid financial foundation with good jobs, healthy children, and safe streets.
Businesses are the lifeblood of our community—and as Denver continues to grow as a world-class city where everyone matters, we’re continuously seeking new and innovative ways to support our business climate, increase economic opportunity and boost Denver’s economic vitality.