R&D Tax Credits For Colorado Companies

As your Colorado company completes your 2015 books, and finalizes your 2016 budget and goals, it may be fruitful to explore the potential of an R&D Tax Credit.

In Colorado, for example, there is a $750,000 fund offered to investors as a tax credit. It is available on a first come, first served basis so being prompt in applying is paramount.

The purpose of the Colorado Advanced Industry Investment Tax Credit is to help more advanced industry companies receive more capital from Colorado investors. There are seven qualifying industries:

  • Advanced Manufacturing
  • Aerospace
  • Bioscience
  • Electronics
  • Energy/Natural Resources/Cleantech
  • Information Tech
  • Infrastructure Engineering
  • Requirements & Eligibility

Who Qualifies?

In order to qualify for the Advanced Industry Investment Tax Credit, the investor, the investee (the company being invested in) and the investment all must meet certain criteria.

Investor: Must be an individual, S corporation, partnership, LLC or other business entity.
C corporations are not eligible.

Investee: Must be a corporation, partnership, LLC or other business entity.
Be in one of the advanced industries listed above.
Headquarters located in Colorado or at least 50% of its employees in Colorado.
Received less than $10 million from third-party investors since inception.
Annual revenues of less than $5 million.
Actively operating and generating revenue for less than 5 years.

Must be an equity security of at least $10,000.
Investor must hold no more than 30% voting power before the investment.
Investor must hold less than 50% voting power after the investment.

The application is a simple online process that must be submitted by the investor. Other pertinent documents include Term Sheet of the Investment, Proof of Funding, and Capitalization Table.

If your company is already involved in R&D, there is no reason to not do bonus research to see if it qualifies for federal or state tax credits. Why not get your money back?

When you have questions regarding R&D Credits or other Business Financial Needs give Green Tape a call or email Donna@GreenTapellc.com.