CHIPS Refundable Tax Credit Program is sponsored by State of Colorado. This program allows eligible semiconductor and advanced manufacturing companies in Colorado to take a refund on specific types of earned credits.

2. CHIPS Refundable Tax Credit Program Note: The Economic Development Commission provides approval and oversight of this program; program requirements and definitions are subject to change, and the EDC may require additional contingencies for projects upon approval.

The CHIPS Refundable Tax Credits Program was created through House Bill 23-1260(opens in new window) to maximize incentives available to eligible semiconductor and advanced manufacturing industries in Colorado available from fiscal year 2023-24 through fiscal year 2028-29.

Taxpayers engaged in semiconductor or advanced manufacturing industries as defined in statute may apply through the Colorado Office of Economic Development and International Trade to the Economic Development Commission (EDC), who is authorized to grant conditional refundable tax credits subject to the statutory requirements of the program.

The total amount of all refund certificates approved by the EDC cannot exceed $15 million per fiscal year. The total amount of all refund certificates approved by the EDC for all fiscal years from July 1, 2023, through June 30, 2029, cannot exceed $75 million.

The income tax credit types that may be the basis for such a refund are: * Enterprise Zone credits for business personal property investments, commercial vehicles, job training, business facility employees, and expenditures for research and experimental activities; and * The Colorado Job Growth Incentive Tax Credit Applicants that have applied, are applying, or will apply for federal funds under the CHIPS & Science Act must demonstrate that they are engaged or will engage in a project eligible for one of these income tax credits.

The tax credits are performance-based and must be earned within 12 years of EDC approval. A taxpayer that holds a refund certificate may claim a refund of 80 percent of the income tax credit types listed on the refund certificate that are earned by the taxpayer during the twelve years following the EDC’s approval and are not used to offset the taxpayer’s state income taxes due.

If a company does not earn the credit, the company will not receive the total credit certificate amount.

**For**: Semiconductor & Advanced Manufacturers **Amount**: Refundable up to 80% of certain tax credit types specified in statute **Application period**: Rolling **OEDIT division**: Global Business Development Both semiconductor manufacturers and advanced manufacturers are eligible under this program subject to the preferences identified in statute: * For fiscal years 2023-2024 and 2024-2025, the EDC will give the highest priority to taxpayers engaged in semiconductor manufacturing that have received or are expected to receive matching money under ARPA, The CHIPS & Science Act, or other federal legislation that provides incentives for semiconductor manufacturing.

* For fiscal years 2025-2026 through 2028-2029, the EDC shall give highest priority to taxpayers engaged in advanced manufacturing or semiconductor manufacturing that have received or are expected to receive matching money under ARPA, The CHIPS & Science Act, or other federal legislation that provides incentives for semiconductor manufacturing.

All projects approved for a refund certificate under this program must commence within 2 years of EDC approval.

Project Commencement reason means any one of the following: * Company began hiring new jobs * Company began spending capital (explain) * Filing building plans, permits, etc. * Company Purchased Real Estate * Other milestone date indicating project commenced (explain) Applicants must reach out to the Semiconductor Industry Manager to determine eligibility and to obtain an application, which will be accepted on a rolling basis.

A taxpayer must submit an application including all information and documentation required for a pending project prior to obtaining precertification of any income tax credit for the project or on or before the first day of the taxpayer’s credit period.

Applications will request the following information at minimum: * Business/Taxpayer involved in application * Identify Income Tax Credit type(s) * Job Growth Incentive Tax Credit * Business personal property investment tax credit * Commercial vehicle investment tax credit * Job training tax credit * Business facility new employee tax credit * Research and development tax credit * Proposed Project Description * Anticipated total amount of income tax credits generated * Other income tax credits or federal financial assistance applied for After considering the initial prioritization for semiconductor manufacturing and advanced manufacturing (as outlined in the “Eligibility” section above), the EDC shall consider: * Has the applicant applied for federal ARPA funds, CHIPS & Science Act funds, or other federal funds for advanced manufacturing or semiconductor manufacturing?

* Has the taxpayer been previously awarded a refund certificate? * The potential benefits of any federal matching funds received, applied for, or intended to be applied for. * The size of the taxpayer’s current operation in the state relative to the state as a whole and the regions of the state in which the taxpayer is based.

* The strategic economic benefits that the taxpayer provides with existing operations to the state or region in terms of supply chain, benefits to other industries, or other spillover benefits. * Any additional forthcoming economic development benefits that the taxpayer may provide to the state or region based on commitments that the taxpayer has recently made or proposes to make in the near term.

The EDC may approve all, part, or none of the amount of a taxpayer’s application for a refund certificate. The EDC may establish additional contingencies that must be satisfied by the taxpayer before the taxpayer can obtain a refund certificate.

A taxpayer that receives a refund certificate shall notify the EDC immediately if the project included in the certificate is canceled, modified, or otherwise becomes ineligible for the estimated credit, in which case the refund certificate may be canceled or modified.

A refund certificate may be revoked or modified if a taxpayer that receives a refund certificate does not commence the project approved within two years of the EDC’s approval of the refund certificate or otherwise fails to meet the terms of the refund certificate. OEDIT is working to deploy additional resources in support of the semiconductor ecosystem, including assistance programs, directories, and informational materials.

These resources will soon be available.