The CHIPS Zone Program helps eligible semiconductor companies operating in Colorado Springs access state tax incentives that support job creation, capital investment, and research and development. Companies located within the designated CHIPS Zone may qualify for multiple state income tax credits if they meet program and precertification requirements.
The CHIPS Zone Program is a State of Colorado incentive program, managed by the Global Business Development Division at the Colorado Office of Economic Development & International Trade (OEDIT). The CHIPS Zone Program was created through House Bill 23-1260 to maximize incentives available to eligible semiconductor companies in Colorado. A designated CHIPS Zone in Colorado Springs was approved by the State of Colorado Economic Development Commission (EDC) in December 2025, effective as of January 1, 2026.
Eligible Businesses
Taxpayers in semiconductor manufacturing, which is defined as “the fabrication, assembly, testing, advanced packaging, production, or research and development of semiconductors, materials used to manufacture or enhance semiconductors, or semiconductor manufacturing equipment”, can claim specified state tax credits listed in the following section.
Available Tax Credits for Eligible Businesses
Once approved, taxpayers engaged in semiconductor manufacturing in the CHIPS Zone can access the following state income tax credits from the Enterprise Zone program:
New Employee Tax Credit
$1,100 or more per net new employee
Businesses can earn a state income tax credit of $1,100 per net new employee. Businesses can earn more tax credits if the business is an agricultural processor or is in an enhanced rural enterprise zone. This tax credit encourages businesses to hire and expand employment opportunities, thus reducing unemployment rates. State and local governments benefit from income and sales tax revenue generated from these employees.
Research and Development Tax Credit
3% of an increase in research and development expenses
Businesses can earn a 3% tax credit for an increase in annual research and development expenses compared to what they spent the prior two years. Investment in research and experimentation supports an innovative economy. A research and development focused business that sells products, services, or intellectual property will bring outside dollars to the local economy.
Qualified Investment Tax Credit
3% of Business Personal Property Investment
Businesses can earn a state income tax credit for 3% of an investment in business personal property. New business personal property increases a company’s capacity. The taxes a business pays on these purchases far exceed all tax credits under the Enterprise Zone program.
Job Training Tax Credit
12% tax credit of the total investment made during the taxable year in a qualified job training program.
Commercial Vehicle Investment Tax Credit
Provides a credit of 1.5% on commercial truck, truck tractor, tractor, or semitrailer with a gross vehicle weight rating of fifty-four thousand pounds or greater that is model year 2010 or newer and is designated as Class A personal property.
Process and Requirements
A company must have a precertification that is submitted and approved by the CHIPS Zone administrator before any credits may be earned. All such credits may be used to offset a taxpayer's liability or carried forward for a period not to exceed 12 years.
Enterprise Zone Considerations with CHIPS Zone
If a business is already located in an Enterprise Zone (EZ), they do not need to be incorporated into a CHIPS Zone and should follow the guidelines to receive EZ tax credits. However, businesses must separately and additionally apply for any CHIPS Refundable Tax Credits whether they are located in an Enterprise Zone or a CHIPS Zone. Businesses must obtain EDC approval for any refundable tax credits prior to precertification.
To learn more about the Colorado Enterprise Zone program in the Pikes Peak region, visit the El Paso County website.
CHIPS Zone Expiration
CHIPS zones may be modified or terminated at the discretion of the EDC between income tax years 2023 and 2040; however, all CHIPS zones will terminate as a matter of law on December 31, 2040.
Colorado Springs CHIPS Zone Map
To view the local CHIPS Zone boundaries and to see if your business is located within the CHIPS Zone, use the City of Colorado Springs interactive online map tool, SpringsView.
- Under Layers on the left side of the screen, scroll to the “Economic Development” layer
- Check the box next to the Economic Development layer.
- Use the arrow to expand the Economic Development layer to view economic zones.
- Check the box next to CHIPS Zone.
Contact & Resources
For questions or guidance about CHIPS Zone in Colorado Springs, including how to get started, please contact the City of Colorado Springs Economic Development Department:
Shawna Lippert, Economic Development Manager
shawna.lippert@coloradosprings.gov
719-385-6803