On May 15, 2014, Governor Hickenlooper signed Senate Bill 14-073, reinstating the Colorado Brownfields Tax Credit, for properties which qualify under the Voluntary Cleanup Program. On June 7, 2022 Governor Polis signed Senate Bill 22-1392 extending the Colorado Tax Credit for Remediation of Contaminated Land through December 31, 2024, making additional credits available for rural areas of the state and expanding the definition of entities eligible for the credit. This Tax Credit is available for taxpayers and/or qualifying entities who perform environmental remediation associated with a new capital improvement or redevelopment projects.
- In order to qualify for the tax credit, applicants must submit a Voluntary Cleanup Plan to the Colorado Department of Public Health and Environment. Applications submitted to CDPHE after January 01, 2014 may be eligible for the credit.
- Qualifying environmental remediation costs are eligible for a 40% credit on the first $750,000, and 30% on the amount between $750,000 and $1,500,000.
- The maximum credit available is $525,000.
- In rural areas, qualifying environmental remediation costs are eligible for a 50% credit on the first $750,000, and 40% on the amount between $750,000 and $1,500,000.
- The maximum credit available is $675,000.
- A rural area is a municipality or unincorporated area of any county with a population of less than 50,000 that is not located within the Denver metropolitan area.
Applications must take the following steps to be eligible for state Brownfield Tax Credits:
- Applicants must meet in advance of applying for a Voluntary Cleanup Plan with the CDPHE Voluntary Cleanup Program.
- Applicants must identify declare the owner of the property who will be performing the voluntary cleanup and receiving the tax credit.
- Applicants must provide an environmental cost estimate for the project including the following:
- Project design costs for environmental remediation.
- Materials management cost (disposal fees, trucking, moving contaminated soils etc.).
- Vapor Mitigation costs (if applicable).
- Project certification and closure costs (analytical costs for confirmation of groundwater or soils etc.)
- Year project will be completed and applying for tax credit
- Total Project Redevelopment Cost (Environmental and Capital Improvement Costs)
- Estimate of post redevelopment property value.
There is a $3,000,000 fiscal note that limits the total amount of credit available per year for either metropolitan or rural areas, with an additional $2,000,000 of credits reserved for rural areas. Tax credits will be allocated on a first-come, first served basis. Please contact Fonda Apostolopoulos at fonda.apostolopoulos@state.co.us for more information on tax credit and Voluntary Cleanup Program applications
Applicants are required to receive a “No Action Determination” from the Voluntary Cleanup Plan Program in order to receive a tax credit certification from CDPHE. To enable certification of eligible credits, we will require applicants to submit documentation of project environmental remediation costs, including invoices, cancelled checks (front and back), and other appropriate documentation.
Once project costs are verified, we will issue a “No Action Determination” for the project, and a Tax Credit Certification Letter to the applicant and the Colorado Department of Revenue.