Business Qualification Requirements

For a business to be a qualified investee in this tax credit program, it needs to:

• Be a corporation, partnership, LLC, or other business entity (individuals do not qualify).

• Manufacture an advanced technology and influence one or more of Colorado’s advanced industries, which include advanced manufacturing, aerospace, bioscience, electronics, energy and natural resources, infrastructure engineering, and information technology.

• Have headquarters in Colorado or have at least 50% of employees based in Colorado.

• Be registered with the Colorado Secretary of State and in Good Standing.

• Have received less than $10 million from third-party investors since the business was formed.

• Have annual revenues of less than $5 million OR have been actively generating revenue for less than five years.

If your business has less than 50% of its employees in Colorado, you will need to provide documentation to certify your business is eligible based on location.

Such documentation must:

• Be on business letterhead, signed by the CEO or other officer with similar authority.

• Provide the titles and functions of all employees identifying where such positions are employed (Colorado or other state or country).

• Include the statement, “I attest that (Business Name) is headquartered in Colorado, and that (identify individuals) work in Colorado on behalf of the business and are responsible for executive orders and key policy decisions.”

Advanced Industry Determination

When determining if a business is in an advanced industry, OEDIT will look at the following factors:

• Is the company advancing the industry or advancing the state of the art?

• What is the company’s intellectual property strategy?

• Do they hold or are they applying for patents, or do they have trade secrets?

• Does the company perform Research & Development?

• What percent of employees are in STEM-related fields? 

Recertification

AITC program certification is valid for 365 days. Businesses will need to recertify on an annual basis. We encourage certified businesses to submit their recertification application eight months into their certification period to make sure there is no risk of a lapse in their certification. Processing recertification applications can take up to 90 days, and thus we encourage founders to submit their recertification application with plenty of time. 

Recertification applications can be found on the AITC application portal—click on the AITC drop-down tab and click on “Investee Full Certification”, then scroll down and click on recertifying, which will take you to the recertification application.

Ongoing Eligibility

Please note, it is required of AITC-certified businesses to monitor their own eligibility. If/when a business surpasses the eligibility criteria, it will immediately become ineligible for AITC. For example, once a business has raised $10 million from third-party investors, it becomes ineligible. Or, once a business, when reviewing their year-end financials, has surpassed $5 million in revenues and has generated revenues for 5 full years, it becomes ineligible.

Any investments made in a business after the business becomes ineligible will not qualify for a tax credit. Businesses shall notify the office within thirty days from the date that it no longer meets the qualifications, however penalties may apply starting the very day the business is no longer eligible. If the certification is revoked, the office may assess a penalty against the business that is equal to the amount of the tax credits authorized after the date the business no longer meets the qualifications. Therefore, the business must keep the eligibility criteria in mind when conducting business and working with potential investors.

New Reporting Requirements for AITC Certified Businesses

House Bill 25-1157 introduced new ongoing reporting requirements for businesses that receive a qualified investment. 

A qualified small business that receives a qualified investment shall report data relevant to the impact of the tax credit and the development of the qualified small business annually to the Office for a five-year period following an initial qualified investment. Qualified small businesses that have been certified and wish to keep their certification active must also submit an annual impact report. The Office will notify relevant companies about the annual impact report. Companies must submit the requested report within 45 days of the report notification email having been sent.

Important Note on Compliance: If a business's certification is revoked or a business fails to meet its reporting requirements, the Office may assess a penalty against the business equal to the amount of the advanced industry investment tax credits authorized after the date that the business no longer meets the qualifications, or for the years of reporting-non-compliance. If a certification is revoked, subsequent investments in that business do not qualify for a tax credit. However, all tax credits issued before the date of the revocation remain valid, and the Office shall not deny any application for a tax credit if the investment was made before the date of the revocation.