2023 Colorado Revised Statutes › Title 39 - TAXATION (§§ 39-1-101 — 39-37-301) › SPECIFIC TAXES (§§ 39-20-101 — 39-37-301) › AVIATION DEVELOPMENT ZONE ACT (§§ 39-35-101 — 39-37-301) › Article 35 - AVIATION DEVELOPMENT ZONE ACT (§§ 39-35-101 — 39-35-106) › Section 39-35-104 - Aircraft manufacturer - credit for new employees

(1)
For any income tax year commencing on or after January 1, 2006, but before January 1, 2023, any aircraft manufacturer that is located in an aviation development zone in the state, that employs at least ten full-time employees within the zone, and that hires one or more new employees during the income tax year shall be allowed a credit against the income tax imposed by article
22
of this title in an amount equal to one thousand two hundred dollars for each new employee who is working within the zone, prorated according to the number of months the new employee was employed by the aircraft manufacturer during the income tax year.
(2)
An aircraft manufacturer that qualifies for the credit allowed pursuant to this section shall be allowed the credit for each subsequent tax year for each additional new employee. Any credit shall be allowed for a maximum of twelve consecutive months for each new employee employed by the aircraft manufacturer.
(3)
(a)
The number of new employees employed during any income tax year shall be determined by dividing by twelve the sum of the number of new employees on the last business day of each month of the income tax year. If the aircraft manufacturer is in operation for less than the entire income tax year, the number of new employees shall be determined by dividing the sum of the number of new employees on the last business day of each full calendar month during the portion of such income tax year during which the aircraft manufacturer was in operation by the number of full calendar months in such income tax year.
(b)
For the purpose of determining the amount of the credit allowed pursuant to this section in the case of an aircraft manufacturer that already operates a facility in an aviation development zone on January 1, 2006, or that opens a facility in an aviation development zone to replace another facility in or outside of an aviation development zone at which the aircraft manufacturer discontinued operations before the close of the first income tax year in which the credit is allowed pursuant to this section, the number of new employees for which the credit is claimed shall not exceed the difference between the average number of employees employed during the income tax year less the average number of employees employed at the existing facility or the replacement facility, as determined pursuant to paragraph (a) of this subsection (3), during the two income tax years preceding the income tax year in which the credit is claimed.
(4)
If the total amount of the credits claimed by an aircraft manufacturer pursuant to the provisions of this section exceeds the amount of income taxes due on the income of the aircraft manufacturer 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 to exceed 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 aircraft manufacturer.
(5)
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, referred to in this section as the "investors", 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.
(6)
For purposes of this section, an aircraft manufacturer may only claim the new employee credit for employees for whom:
(a)
The aircraft manufacturer withholds social security, medicare, and income taxes under the aircraft manufacturer's own federal and state taxpayer identification numbers; or
(b)
The aircraft manufacturer 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 aircraft manufacturer, withholds social security, medicare, and income taxes under the employee leasing company's own federal and state taxpayer identification numbers.
(7)
The executive director of the department of revenue shall promulgate rules necessary for the administration of this section in accordance with article
4
of title
24
, C.R.S.
L. 2005: Entire article added, p. 1491, § 1, effective August 8. L. 2008: (6) amended, p. 17, § 2, effective March 6. L. 2009: (6)(b) amended, (SB 09-292), ch. 369, p. 1981, §118, effective August 5. L. 2013: (1) amended, (HB 13-1080), ch. 211, p. 886, § 3, effective August 7.
For the legislative declaration in the 2013 act amending subsection (1), see section 1 of chapter 211, Session Laws of Colorado 2013.