Two of Colorado's recent successes in luring new corporate HQ to the Denver region - REpower and Davita have been at least partially ascribed to House Bill 09-1001 which was signed by Governor Ritter back on May 4, 2009. (Photo in this blog entry is of Governor Ritter at signing ceremony on May 4, 2009 from Press Release at State of Colorado Web Site)
The bill created state income tax credits for businesses that locate in Colorado, allowing companies to apply to the nine member Colorado Economic Development Commission (CEDC) for a 3.8% credit based on payroll tax costs incurred from the newly created jobs. To be eligible, businesses must create at least 20 new jobs in urban areas or five new jobs in rural areas, and pay wages or salaries above the average in the county where they reside. The newly created jobs must be in place for at least one year before the credits get paid.
I find this new law intriguing for two reasons. First, because its been involved in the two notable successes listed above. Second, because compared to other states like New York, Colorado has traditionally been extremely parsimonious when it comes to providing tax credits and incentives to lure new businesses. This new law is a modest departure from the state's traditional economic development recipe which relies heavily on its highly educated work force, desirable quality of life, the presence of DIA, and a business friendly regulatory climate.
It will be intriguing to see if the law generates other success stories and if it leads to any retaliatory actions by competing states.
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