The state of Colorado has designated 126 areas as Qualified Opportunity Zones. Enacted in 2017, Opportunity Zones are tracts that have been nominated by the state governor based on their status as an underserved community. Once approved as an opportunity zone, these areas are subject to tax breaks for investors looking to develop that area. The largest opportunity zones in Colorado by area and population are as follows:

To qualify as an opportunity zone, an area must have at least 20 percent of its population living in poverty. Here are some of the following statistics for the opportunity zones in Colorado:

  • El Paso

    Two-thirds of the opportunity zones consists of Front Range counties ranging from El Paso all the way to Larimer

  • Denver

    The highest concentration of opportunity zones is located in the city of Denver

  • Colorado Springs

    Colorado Springs is home to eight opportunity zones

The primary reason Opportunity Zones were created is to encourage private investments in economically disadvantaged areas. Funding will still have to be acquired, although capital gains incentives are intended to help communities where poverty rates are high and low-income is the norm. Qualifying to become an opportunity zone is based mostly on the average income amount in a particular area.

Interested In OZ Funds in Colorado?

Learn More About the Tax Benefits

View Our Project Directory

Colorado Tax Situation

The state sales tax in Colorado is 2.9 percent, although local municipalities vary in their tax rates Combined with the state tax, that could lead to as much as 11.2 percent. However, most are somewhere in the middle which includes Denver (7.65), Pueblo (7.6), Colorado Springs (8.25), and Fort Collins (7.3).

Since marijuana is now legal in the state of Colorado, there is also a marijuana tax. The fees collected through the sale of marijuana exceeded $67 million in 2014 when legalization was first enacted. That amount has risen significantly every year and checked in at $223 million just from January through October in 2018.

Colorado does not fall in the top percentage of states with the highest personal income tax, nor is it in the grouping with the lowest rates. Its 4.63 percent rate places it among the middle of the pack compared to all 50 states.

Colorado also recently returned its Earned Income Tax Credit (EITC), which benefits mostly married couples and those with children. Tax credits are designated by a sliding scale and that also has an income cap to go along with it.

CO Industries with Tax Breaks

Colorado is very good to corporate businesses looking to set up shop within the state. Colorado features one of the lowest corporate income tax rates in the nation. Only North Dakota and North Carolina have lower corporate tax rates. There are also advantages to certain industries that conduct their business in the state of Colorado and they are as follows:

    • Aerospace

      Only one state has a large aerospace industry than Colorado and that is mainly because of the tax relief offered to this industry.

    • Agriculture

      Both farmers and ranchers receive significant tax breaks in Colorado and that impacts corn crops and livestock.

    • Defense

      The corporate tax rates have made Colorado attractive for defense companies, many of which are tied in with the federal government and homeland security.

    • Manufacturing

      There is still a rich amount of manufacturing within the state, although it has tapered off in recent years.

    The tax situation for corporations has Colorado an attractive destination. That has led to an abundance of different companies establishing a presence within the state. The metro Denver area has a high population of residents working in the aerospace industry and that is followed by the aviation industry, which also has a vast presence in the city.

    Colorado State Financial Facts

    Cost of living in Colorado has risen in recent years, especially in major areas. Denver has seen an increase while the state features a cost of living that is 12 percent higher than the national average. However, it is slightly below the national average in the areas of transportation and utilities. Here are more numbers for the state of Colorado:

    • Median household income – $65,685
    • Median annual household savings (two adult households with children)
      • $3,479 (retirement)
    • Total household investments

    62.4 percent of families that own their home

                Median value of Colorado home – $370,600
                The average hourly wage for jobs in Colorado – $18.92

      Current economic condition of Colorado

      The state of Colorado has a bustling economy, one that is considered among the five best in the entire country. The unemployment rate is very low at just 3.1 percent and there was a 2 percent jump in overall pay in industries that were not farm-related. The economic growth is also attributed to a blossoming economy in the metro Denver area.

      The size of Colorado ranks eight among all states while its economy is growing faster than most states. Many new businesses are relocating to Colorado while new construction remains a thriving trend. The Gross Domestic Product is also increasing significantly each year.

      The middle class in Colorado is steadily shrinking as the economy is making it more difficult for families to remain in this bracket. That number recently dropped below 50 percent in 2016. Middle class families in Colorado need to earn more than middle class families in many other states as the cost of living and property values are rising in the state. In Colorado, reports have shown there is more debt per capita than the national average.

      Primary Industries in Colorado

      There have been a high number of businesses relocating to Colorado and that has resulted in a diverse economic landscape. However, there remains a few mainstays of business within the state and they are relegated to the following industries:

      • Aerospace
      • Aviation
      • Defense
      • Manufacturing
      • Marijuana
      • Tourism

      Opportunity Zones in Colorado

      There are a number of tracts that have been nominated for opportunity zones throughout the state of Colorado. Many of these zones have multiple locations in different areas but there are some with one tract. Here is a detailed look at all 126 of those opportunity zones within the state:

      • Adams (9)
      • Alamosa (3)
      • Arapahoe (9)
      • Archuleta
      • Baca
      • Bent
      • Boulder (4)
      • Chaffee (2)
      • Cheyenne
      • Clear Creek
      • Castilla
      • Crawley
      • Delta (3)
      • Denver (10)
      • Delores
      • Eagle
      • El Paso (8)
      • Fremont (3)
      • Garfield (3)
      • Gunnison
      • Huerfano
      • Jefferson (5)
      • Kit Carson
      • Lake
      • La Plata (2)
      • Larimer (4)
      • Los Animas (3)
      • Lincoln
      • Logan (3)
      • Mesa (8)
      • Moffat
      • Montezuma
      • Montrose (3)
      • Morgan (2)
      • Otero (2)
      • Phillips
      • Prowers (3)
      • Pueblo (9)
      • Rio Blanca
      • Rio Grande
      • Saguache
      • San Juan
      • San Miguel
      • Washington
      • Weld (4)
      • Yuma

      Across the country, there are some states that have not experienced economic growth, although Colorado is not part of that contingent. The state does, however, have a poverty rate that is close to 14 percent as concentrated areas have experienced an economic downturn. But those low-income areas do not reflect the overall economic climate of the state. For example, Denver leads the state with 10 opportunity zones, but the city is also a major reason for the economic upswing of the state. In the opportunity zones located in Denver, capital gains investments have been intended to spark low-income areas.