The Colorado Economic Development Commission has approved the first two awards under a program created to increase semiconductor and advanced manufacturing capacity in the state. This opens the door for more federal funds to flow into Colorado.
The CHIPS and Science Act, which authorizes $280 billion to boost the country’s competitiveness in semiconductors and other key technologies, provides a 25% federal tax credit for capital investments in chip plant construction or capacity expansion. To qualify for federal tax breaks, companies must show that state and local governments have provided financial support.
The Colorado legislature passed House Bill 23-1260 in May to boost advanced manufacturing in the state. This legislation created the CHIPS Refundable Tax Credit program, allowing companies to convert tax credits from the existing Enterprise Zone and Job Growth Incentive Tax Credits programs into cash via tax refunds.
Project Hydrogen, a Colorado Springs company with 1,000 employees, has received approval for $10 million in refundable tax credits for an $869 million expansion, which is expected to generate 371 jobs. Another company, Project Helium, received a $3.3 million refundable tax credit for a $720 million investment in a new plant and 600 new jobs.
The CHIPS Act and the state’s initiatives are expected to result in substantial federal funding and economic impact. The state may also consider boosting the initial award amounts for the two companies in future years.
Historically, the semiconductor industry has played a key role in the U.S. economy, driving technological advancements and innovation. Given the increasing demand for chips and other advanced manufacturing technologies, the state’s efforts to boost its capacity are crucial for economic growth and competitiveness.
These initiatives are part of ongoing efforts to encourage investment and job creation in key industries, ultimately contributing to the state’s economic development and stability.
