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CO — State Policy Updated January 2026

Colorado

Statewide incentives and constraints, plus current legislative proposals and policy debates.

Job Growth Incentive Tax Credit Enterprise Zone Program Strategic Fund Job Growth Incentive Rural Jump-Start Tax Credit

Overview

Colorado has no enacted data-center-specific tax incentives as of January 2026. Large data centers can access general business incentive programs like the Job Growth Incentive Tax Credit and Enterprise Zone benefits, which reward job creation and capital investment. The state legislature has twice considered major data center incentive bills — one in 2024 and one in 2025 — both of which died without passage but signal where Colorado’s policy priorities lie: grid support, renewable energy sourcing, water stewardship, and workforce commitments as preconditions for multi-year sales tax exemptions.

Incentives

Job Growth Incentive Tax Credit (JGITC)

This state income tax credit is available to any company creating net new jobs in Colorado, including data centers.

  • State income tax credit equal to 50% of FICA paid on net new job growth for each calendar year in the credit period[1]
  • Available to qualifying businesses regardless of industry sector
  • Can be paired with additional rural workforce incentives

Location Neutral Employment Incentive

Companies approved for the Job Growth Incentive can receive additional cash payments for employing remote workers in rural counties.

  • Cash incentive for each remote worker employed in an eligible rural county[1]
  • Stacked on top of the base JGITC program
  • Targets job creation in economically distressed areas

Enterprise Zone Program

Businesses located in designated enterprise zones qualify for state tax credits and exemptions on specific business investments.

  • State income tax credits for qualifying activities within enterprise zones[1]
  • Sales and use tax exemptions on specific business purchases[1]
  • Zone designation determined by economic distress indicators

Strategic Fund Job Growth Incentive

This cash grant program rewards companies that create and maintain new permanent jobs in Colorado.

  • Cash payment to companies creating new permanent jobs maintained for at least one year[1]
  • Negotiated on a case-by-case basis with the Colorado Economic Development Commission
  • Can be combined with other state incentives

Rural Jump-Start Tax Credit

Helps new businesses start or relocate to rural, economically distressed areas of Colorado.

  • Available to new businesses establishing operations in rural, economically distressed areas[1]
  • Tied to new employee hiring requirements
  • Limited to specific qualifying counties and census tracts

What to Watch

  • SB24-085 (2024) proposed a sales and use tax rebate for data centers investing at least $100M, creating 20 new jobs, and adding 3 MW of electric load, with rebates available for fiscal years 2026–2033 and a limit of three certified projects per year. The bill died in committee but established a floor for future proposals.[2][3]

  • SB25-280 (2025) proposed a more ambitious program requiring $250M minimum investment, 25 full-time jobs, and mandatory commitments to grid support capabilities, 50% renewable energy sourcing, water stewardship strategies, and energy storage in exchange for a 100% sales and use tax exemption on equipment for 20 years. An enhanced tier required an additional $10M investment in grid modernization for a 10–15% income tax credit. The bill also mandated pre-application consultation with utilities and PUC review for projects triggering resource acquisition. This bill also failed but signals legislative interest in linking incentives to grid reliability and environmental performance.[4]

  • Future legislative sessions may revive similar proposals. Watch for bills in the Colorado General Assembly that tie data center tax benefits to renewable energy procurement, water conservation, or grid modernization investments.

Sources

[1] Colorado Office of Economic Development and International Trade (OEDIT), “Economic Incentives | Colorado Grants,” n.d., https://choosecolorado.com/incentives/ (accessed January 7, 2026).

[2] Colorado General Assembly, “SB24-085 Sales & Use Tax Rebate for Digital Asset Purchases” (bill summary, status page), 2024, https://leg.colorado.gov/bills/sb24-085 (accessed January 7, 2026).

[3] Colorado General Assembly, “SB24-085” (introduced bill text), 2024, https://leg.colorado.gov/sites/default/files/documents/2024A/bills/2024a_085_01.pdf (accessed January 7, 2026).

[4] Colorado General Assembly, “SB25-280 Data Center Development and Grid Modernization Act” (bill summary, status page), 2025, https://leg.colorado.gov/bills/sb25-280 (accessed January 7, 2026).