(1)

(a)

(I)

(A) For any income tax year commencing on or after January 1, 1993, but prior to January 1, 2014, any taxpayer who establishes a new business facility in an enterprise zone shall be allowed a credit against the income tax imposed by article 22 of this title in an amount equal to five hundred dollars per income tax year for each new business facility employee, pursuant to subsection (6) of this section, who is working within the zone, prorated according to the number of months the employee was employed by the taxpayer during the income tax year. An employee whose primary duties consist of operating a commercial motor vehicle with a commercial driver's license shall be deemed to be working one hundred percent within the zone if the employee spends no more than five percent of his or her total time at any facility of the employer other than the facility within the zone.

(B) Repealed.

(II) (Deleted by amendment, L. 2002, p. 1107, § 5, effective August 7, 2002.)

(III) For any income tax year commencing on or after January 1, 2003, but prior to January 1, 2014, any taxpayer who establishes a new business facility in an enhanced rural enterprise zone shall be allowed an additional credit against the income tax imposed by article 22 of this title in an amount equal to two thousand dollars per income tax year for each new business facility employee who is working within the enhanced rural enterprise zone, prorated according to the number of months such employee was employed by the taxpayer during the income tax year.

(IV) A new business facility qualifying for credit shall be allowed the credit for each subsequent tax year for each additional new business facility employee in excess of the maximum number employed in any prior tax year. Any credit shall be allowed for a maximum of twelve consecutive months for each new business facility employee employed by the taxpayer.

(b)

(I) For any income tax year commencing prior to January 1, 2014, in addition to the credit available under sub-subparagraph (A) of subparagraph (I) of paragraph (a) of this subsection (1) and subparagraph (III) of paragraph (a) of this subsection (1), a taxpayer qualified for such credits shall be allowed for the first two full income tax years while located in an enterprise zone a credit in an amount equal to two hundred dollars for each new business facility employee who is insured under a health insurance plan or program provided through his or her employer. To be eligible for such credit, the employer must contribute fifty percent or more of the total cost of a health insurance plan or program, and such plan or program must be in accordance with the provisions of article 8 of title 10 or part 1, 2, 3, or 4 of article 16 of title 10, C.R.S., or be a self-insurance program and include partial or complete coverage for hospital and physician services.

(II) Repealed.

(2) For new business facilities in enterprise zones or enhanced rural enterprise zones, the number of new business facility employees engaged or maintained in employment at the new business facility for each taxable year for which the credit is claimed must equal or exceed one person.

(3)

(a) For any income tax year commencing prior to January 1, 2014, any taxpayer who operates a business within an enterprise zone that adds value through manufacturing or processing to agricultural commodities shall be allowed in addition to the credit allowed under subsection (1) of this section, while located in the enterprise zone, a credit against the income tax imposed by article 22 of this title in an amount equal to five hundred dollars for each additional new business facility employee in excess of the maximum number employed in any prior tax year.

(b) For any income tax year commencing on or after January 1, 2003, but prior to January 1, 2014, any taxpayer who operates a business within an enhanced rural enterprise zone that adds value through manufacturing or processing to agricultural commodities shall be allowed in addition to the credit allowed under paragraph (a) of this subsection (3) a credit against the income tax imposed by article 22 of this title in an amount equal to five hundred dollars for each additional new business facility employee in excess of the maximum number employed in any prior tax year.

(4) Repealed.

(5)

(a)

(I) For taxable years beginning on or after January 1, 1993, but prior to January 1, 2014, if the total amount of the credits claimed by a taxpayer pursuant to the provisions of subparagraph (I) of paragraph (a) of subsection (1), paragraph (b) of subsection (1), and paragraph (a) of subsection (3) of this section exceeds the amount of income taxes due on the income of the taxpayer in the income tax year for which the credits are being claimed, the amount of the credits not used as an offset against income taxes in said income tax year shall not be allowed as a refund but may be carried forward as a credit against subsequent years' tax liability for a period not exceeding five years and shall be applied first to the earliest income tax years possible. Any amount of the credit that is not used during said period shall not be refundable to the taxpayer.

(II) For taxable years beginning on or after January 1, 2003, but prior to January 1, 2014, if the total amount of credits claimed by a taxpayer pursuant to subparagraph (III) of paragraph (a) of subsection (1) of this section and paragraph (b) of subsection (3) of this section exceeds the amount of income taxes due on the income of the taxpayer in the income tax year for which the credits are being claimed, the amount of credits not used as an offset against income taxes in said income tax year shall not be allowed as a refund but may be carried forward as a credit against subsequent years' tax liability for a period not exceeding seven years and shall be applied first to the earliest income tax years possible. Any amount of the credit which is not used during said period shall not be refundable to the taxpayer.

(b)

(I) Subparagraph (I) of paragraph (a) of this subsection (5) is effective for income tax years commencing on or after January 1, 1993, but prior to January 1, 2014; except that application of subparagraph (I) of paragraph (a) of this subsection (5) to the credit described in paragraph (b) of subsection (1) of this section shall be effective for income tax years commencing on or after January 1, 1996, but prior to January 1, 2014.

(II) Subparagraph (II) of paragraph (a) of this subsection (5) is effective for income tax years commencing on or after January 1, 2003, but prior to January 1, 2014.

(c) For purposes of this section, a partnership, S corporation, limited liability company, or other entity electing not to be taxed as a corporation may pass through the credits earned under this section in any tax year to its participating partners, shareholders, or members, hereinafter referred to as the "investors" of the entity, in any percentage the entity chooses, up to the amount of the credit earned in the tax year. Credits earned but unclaimed in a tax year for which the entity elects to be taxed as a corporation may not be distributed to investors in a later tax year for which the entity elects not to be taxed as a corporation. In any tax year for which the entity elects not to be taxed as a corporation, all credits passed through to investors may be carried forward at the investor level for the carryover periods specified in this section.

(d) For purposes of this section, a taxpayer may only claim the new business facility employee credit for employees for whom:

(I) The taxpayer withholds social security, medicare, and income taxes under the taxpayer's own federal and state taxpayer identification numbers; or

(II) The taxpayer is the work-site employer, as defined in section 8-70-114 (2)(a)(VII), C.R.S., and an employee leasing company, as defined in section 8-70-114 (2)(a)(V), C.R.S., as the employing unit for, or co-employer with, the taxpayer, withholds social security, medicare, and income taxes under the employee leasing company's own federal and state taxpayer identification numbers.

(6)

(a) The number of new business facility employees during any taxable year shall be determined by dividing by twelve the sum of the number of new business facility employees on the last business day of each month of such taxable year. If the new business facility is in operation for less than the entire taxable year, the number of new business facility employees shall be determined by dividing the sum of the number of new business facility employees on the last business day of each full calendar month during the portion of the taxable year during which the new business facility was in operation by the number of full calendar months during the period.

(b) Notwithstanding the provisions of paragraph (a) of this subsection (6), for the purpose of determining the credit allowed by this section in the case of a facility that qualifies as a new business facility but is a replacement business facility, the number of new business facility employees employed in the operation of the facility shall be reduced by the average number, determined pursuant to paragraph (a) of this subsection (6), of individuals employed in the operation of the facility that the new business facility replaces during the three taxable years preceding the taxable year in which commencement of commercial operations occurs at the new business facility.

(7) As used in this section, unless the context otherwise requires:

(a) "Building" means only structures within which individuals are customarily employed or that are customarily used to house machinery, equipment, or other property.

(b) "Commencement of commercial operations" means the first taxable year that the new business facility is first available for use by the taxpayer, or first capable of being used by the taxpayer, in the revenue-producing enterprise in which the taxpayer intends to use the new business facility.

(c)

(I) "Facility" means any factory, mill, plant, refinery, warehouse, feedlot, building, or complex of buildings located within the state, including the land on which the facility is located and all machinery, equipment, and other real and tangible personal property located at or within the facility and used in connection with the operation of the facility.

(II)

(A) If a facility that does not constitute a new business facility is expanded by the taxpayer, the expansion shall be considered a separate facility eligible for the credit allowed by this section if: The taxpayer's investment in the expansion exceeds one million dollars or the investment is less than one million dollars but the investment in the expansion exceeds one hundred percent of the investment in the original facility prior to expansion; and the expansion otherwise constitutes a new business facility.

(B) The taxpayer's investment in the expansion and in the original facility prior to expansion shall be determined in the manner provided in paragraph (g) of this subsection (7).

(III) If a facility that does not constitute a new business facility is expanded by the taxpayer, the expansion shall be considered a separate facility for purposes of the credit allowed by this section if:

(A) The expansion results in the employment of ten or more new business facility employees or, for income tax years commencing on or after January 1, 1996, but prior to January 1, 2014, a ten percent increase in the number of new business facility employees resulting in the employment of at least one full-time new business facility employee, whichever is less, during the taxable year over and above the average number of employees employed in the enterprise zone by the taxpayer during the twelve months immediately prior to the expansion, determined pursuant to subsection (6) of this section; and

(B) The expansion otherwise constitutes a new business facility.

(d) "Net annual rental rate" means the annual rental rate paid by the taxpayer on real and tangible personal property, less any annual rental rate received by the taxpayer from subrentals.

(e) "New business facility" means a facility that satisfies the following requirements:

(I) The facility is operated by the taxpayer in the operation of a revenue-producing enterprise. A facility shall not be considered a new business facility in the hands of the taxpayer if the taxpayer's only activity with respect to the facility is to lease it to another person. If the taxpayer operates only a portion of the facility in the operation of a revenue-producing enterprise and leases another portion of the facility to another person or does not otherwise use the other portions in the operation of a revenue-producing enterprise, the portion operated by the taxpayer in the operation of a revenue-producing enterprise shall be considered a new business facility if the requirements of subparagraphs (II) and (III) of this paragraph (e) are satisfied.

(II) If the facility was acquired by the taxpayer from another person, the facility was not operated immediately prior to the transfer of title to the facility to the taxpayer or immediately prior to the commencement of the term of the lease of the facility to the taxpayer by any other person in the operation of a revenue-producing enterprise, and the taxpayer continues the operation of the same or a substantially identical revenue-producing enterprise at the facility.

(III) The facility is not a replacement business facility.

(f) "New business facility employee" means a person employed by the taxpayer in the operation of a new business facility during the taxable year for which the credit allowed by this section is claimed. A person shall be deemed an employee if the person performs duties in connection with the operation of the new business facility on:

(I) A regular, full-time basis;

(II) A part-time basis if the person is customarily performing his or her duties at least twenty hours per week throughout the taxable year; or

(III) A seasonal basis if the person performs his or her duties for substantially all of the season customary for the position in which the person is employed.

(g) "New business facility investment" means the value of the real and tangible personal property, except inventory or property held for sale to customers in the ordinary course of the taxpayer's business, that constitutes the new business facility or that is used by the taxpayer in the operation of the new business facility during the taxable year for which the credit allowed by this section is claimed. The value of the property during the taxable year shall be:

(I) The original cost of the real and tangible personal property if owned by the taxpayer; or

(II) Eight times the net annual rental rate of the real and tangible personal property if leased by the taxpayer.

(h)

(I) "Related taxpayer" means:

(A) A corporation, partnership, limited liability company, trust, or association controlled by the taxpayer;

(B) An individual, corporation, limited liability company, partnership, trust, or association under the control of the taxpayer; or

(C) A corporation, limited liability company, partnership, trust, or association controlled by an individual, corporation, limited liability company, partnership, trust, or association under the control of the taxpayer.

(II) For the purposes of this paragraph (h), unless the context otherwise requires:

(A) "Control of a corporation" means ownership, directly or indirectly, of stock possessing at least eighty percent of the total combined voting power of all classes of stock entitled to vote and at least eighty percent of all other classes of stock of the corporation.

(B) "Control of a partnership, limited liability company, or association" means ownership of at least eighty percent of the capital or profits interest in the partnership, limited liability company, or association.

(C) "Control of a trust" means ownership, directly or indirectly, of at least eighty percent of the beneficial interest in the principal or income of the trust.

(i)

(I) "Replacement business facility" means a facility, otherwise described in paragraph (e) of this subsection (7) and referred to in this paragraph (i) as a "new facility", which replaces another facility, referred to in this paragraph (i) as an "old facility", located within the state that the taxpayer or a related taxpayer previously operated but discontinued operating on or before the close of the first taxable year in which the credit allowed by this section is claimed. A new facility shall be deemed to replace an old facility if the following conditions are met:

(A) The old facility was operated by the taxpayer or a related taxpayer for more than three full taxable years out of the five taxable years next preceding the taxable year in which commencement of commercial operations occurs at the new facility; and

(B) The old facility was operated by the taxpayer or a related taxpayer in the operation of a revenue-producing enterprise and the taxpayer continues the operation of the same or a substantially identical revenue-producing enterprise at the new facility.

(II) Notwithstanding the provisions of subparagraph (I) of this paragraph (i), a facility shall not be considered a replacement business facility if the taxpayer's investment in the new facility exceeds three million dollars or the investment is less than three million dollars but the investment in the new facility exceeds three hundred percent of the investment in the old facility by the taxpayer or related taxpayer. The investment in the new facility and in the old facility shall be determined in the manner provided in paragraph (g) of this subsection (7).

(j) "Revenue-producing enterprise" means an enterprise that engages in the following:

(I) The production, assembly, fabrication, manufacturing, or processing of any agricultural, mineral, or manufactured product;

(II) The storage, warehousing, distribution, or sale of any products of agriculture, mining, or manufacturing;

(III) The feeding of livestock at a feedlot;

(IV) The operation of laboratories or other facilities for scientific, agricultural, animal husbandry, or industrial research, development, or testing;

(V) The performance of services of any type;

(VI) The administrative management of any of the activities listed in subparagraphs (I) to (V) of this paragraph (j); or

(VII) Any combination of any of the activities referred to in subparagraphs (I) to (VI) of this paragraph (j).

(k) "Same or a substantially identical revenue-producing enterprise" means a revenue-producing enterprise in which the products produced or sold, services performed, or activities conducted are the same in character and use and are produced, sold, performed, or conducted in the same manner and to or for the same types of customers as the products, services, or activities produced, sold, performed, or conducted in another revenue-producing enterprise.

(8) This section is repealed, effective December 31, 2019.