The geography of Colorado’s enterprise zone tax credits is changing for 2016.

The shifting boundaries mean some businesses will be newly eligible for the tax credits, while other businesses will no longer be able to use them.

For example, Rocky Mountain Chocolate Factory and Ska Brewing Co. will no longer be eligible for the tax credits. In fact, all of Bodo Industrial Park is now ineligible. Same with any business on downtown Main Avenue.

Yet, other businesses are now part of the enterprise zones that were not before. Purgatory Resort, for one, is now part of an enterprise zone. The ski area could receive a 3-percent tax credit on that new Lift 8.

The tax credits are meant to encourage business activity in areas that need it. All of San Juan, Montezuma and Dolores counties are enterprise zones.

In La Plata and Archuleta counties, the picture is more complicated. Those counties did not meet the criteria to be included, so state officials drilled down to the U.S. Census tracts. Some parts of the counties will be within enterprise zones in 2016, but some will not.

Some 200 businesses in Durango will lose eligibility for the tax credits in 2016, said Laura Lewis Marchino, assistant director of the Region 9 Economic Development District of Southwest Colorado.

“A lot of Durango is changing,” she said.

Dave Thibodeau, president of Ska Brewing Co., said the end of the tax credits will impact the local-craft brewery.

“We have used the Enterprise Zone tax credits in the past few years, with our biggest benefit being on the purchase of new equipment,” he said in an email. “However, we can accelerate depreciation on a portion of the cost of new equipment (according to §179 of the Internal Revenue Code), so we do that first and then the Enterprise Zone credit kicks in after. That said, it does still have a substantial impact on our bottom line and would even more so should S-179 not pass next year.

“For a growing business like ours, it’s something we have to budget in and prepare for, and, unfortunately, it really is something we need to add to the list of considerations (i.e., the recent 74 percent water-rate hike) when looking at future growth in Durango. It’ll be tough, but it’s nothing we can’t find a solution to.”

Criteria for an area to be eligible for the tax credits include:

Unemployment greater than 25 percent above the state average.

Per-capita income less than 75 percent of the state average.

Five-year population growth less than 25 percent of the state average.

Population less than 150,000.

The boundary maps had not been adjusted since 1998. Simply put, much of the Durango area has become too prosperous to be eligible for the tax credits.

The most popular tax credit is for investment. Three percent of equipment purchases and 1.5 percent of commercial vehicle purchases can be used as a tax credit. Other credits award $1,100 per new employee or rebate 25 percent of rehabilitation spending for inhabiting an abandoned building.

The former City Market building in downtown Pagosa Springs qualifies for the abandoned building tax credit, Lewis Marchino said.

For more information and maps, visit Region 9 online at www.scan.org/index.php?page=maps.

cslothower@durangoherald.com

On the Net

Enterprise zone maps: www.scan.org/index.php?page=maps