Tax preference performance statement
- legislative declaration
(1)The general assembly finds and declares that:
(a)Semiconductors, or chips, are tiny electronic devices that are fundamental to modern industrial and national security activities. These devices power tools as simple as a light switch and as complex as a fighter jet or a smartphone. Semiconductors are also essential building blocks in emerging technologies such as artificial intelligence, 5G communications, and quantum computing.
(b)In 2022, the federal government enacted the “Creating Helpful Incentives for Producing Semiconductors and Science Act”, or “CHIPS and Science Act”, providing for over fifty billion dollars to be expended in strengthening and revitalizing the country’s position in semiconductor research, development, and manufacturing;
(c)The “CHIPS and Science Act” is expected to unlock hundreds of billions of dollars of private sector semiconductor investment across the country;
(d)Enactment of a semiconductor manufacturing zone, or CHIPS zone, program of tax incentives will maximize the opportunity for Colorado businesses to draw down federal dollars under the CHIPS Act and capture some of the billions of dollars of private funds expected to be spent in growing the country’s semiconductor manufacturing industry;
(e)The three tax credits available under the program, for qualified investments, business facility employees, and expenditures in research and experimental activities will encourage investment to expand Colorado’s semiconductor manufacturing capacity and make Colorado a new center for innovation and research in this critical industry;
(f)Investing in semiconductor manufacturers in this manner also means investing in Colorado workers, as growth in the semiconductor manufacturing sector will necessarily result in the creation and retention of high-skilled, well-compensated manufacturing jobs in the state;
(g)In accordance with section 39-21-304 (1), which requires any bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly further declares that:
(I)The general legislative purposes of the tax credits allowed by this article 36 are:
(A)To induce certain designated behavior by taxpayers;
(B)To improve industry competitiveness; and
(C)To create or retain jobs.
(II)The specific legislative purposes of the tax credits allowed by this article 36 are:
(A)To improve the competitiveness of Colorado’s semiconductor manufacturing industry;
(B)To induce investment in new and existing semiconductor manufacturing businesses in the state; and
(C)To create well-paying jobs in the private sector as a result of such investment; and
(III)The tax credit certification forms required from taxpayers to be executed by the CHIPS zone administrator pursuant to section 39-36-104 (5), the annual reports that the zone administrator is required to make to the Colorado economic development commission pursuant to section 39-36-104 (3)(b), and the annual reports that the director of the Colorado office of economic development must make to the general assembly and the legislative audit committee under section 39-36-104 (3)(c), will provide objective economic development data points that will allow the general assembly and the state auditor to measure the effectiveness of the CHIPS zone tax credits.
Section 39-36-102 — Tax preference performance statement - legislative declaration,
https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-39.pdf (accessed Oct. 20, 2023).