HB 17-1090

HB 17-1090, also known as the Advanced Industry Investment Tax Credit Extension, is a Colorado law that allows investors who put money into specific small businesses in advanced industries to receive tax credits. The bill extends this benefit for investments made between January 1, 2018, and January 1, 2023, and increases the annual credit limit from $750,000 to $1.5 million from 2019 through 2022. It also broadens the definition of eligible small businesses to include those with less than $5 million in annual revenue or that have been operating for fewer than five years. The law has been signed and is now active, meaning investors can claim these tax credits based on their qualifying investments made since January 1, 2018.

Official Summary

A qualified investor who, prior to January 1, 2018, makes an equity investment in a qualified small business from an advanced industry is allowed an income tax credit that is equal to a percentage of the investment, up to a maximum credit of $50,000. The Colorado office of economic development (office) determines the eligibility for the tax credits and issues nontransferable tax credit certificates that are used to claim the credit. The maximum amount of tax credits allowed for a calendar year is $750,000. The bill extends the credit by allowing qualified investments made on or after January 1, 2018, but prior to January 1, 2023, to qualify for the tax credit. From 2019 through 2022, the total maximum amount of credits for a calendar year is increased to $1.5 million. Beginning with the 2018 calendar year, if the office authorizes less than this amount in a year, then the remaining, unused credits are added to the next year's total maximum amount. In addition, the definition of 'qualified small business' is expanded to include a company that has annual revenues of less than $5 million or that has been actively operating and generating revenue for less than 5 years. Currently, a business must meet both criteria, in addition to other criteria that will continue to apply. The advanced industry investment tax credit cash fund, which was started with money transferred from another cash fund and has no current revenue source, is repealed. In 2022, the office is required to submit to legislative committees a report that includes information about the tax credits issued after January 1, 2018, and the economic benefits from the related qualified investments. (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

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