Equipment Tax Credit Guidelines

The Community Food Access program strives to increase access to and lower prices for healthy food in low income, low access areas of the state by supporting small food retailers and small family farms.

Small Food Retailers and Small Family Farms - your equipment purchases could be eligible for a refundable income tax credit equal to 85% of the amount you spent if they’re connected to increasing access to or lowering prices for healthy food in low income and underserved areas of the state.

CDA will host an information session about this tax credit to support businesses as they apply. To be notified to register for this session, please join our newsletter.

Step 1: Find out if your business is eligible

Small Food Retailers and Small Family Farms are eligible for the CFA Tax Credit.

Small family farms are Colorado-owned and Colorado-operated and have an annual gross revenue below $350,000.

Small food retailers are:

An independent or nonprofit-managed, Colorado-owned, and Colorado-operated small food retail business, defined as a food retailer with less than ten thousand square feet of retail space that carries at least three categories of federally defined staple foods, and be located in or provide food to local, state, or federally defined low-income, low-access neighborhoods; or
A farmer's market or farm-direct operation that is already or demonstrates an intent to become SNAP and WIC -authorized where allowed.

Find out more about eligibility in the Tax Credit Frequently Asked Questions.

Step 2: Find out if your purchase is eligible

Costly equipment purchases that will increase access to or lower prices for healthy foods in low income, low access areas are eligible for the tax credit.

What does "costly equipment" mean?

Many types of equipment are eligible for a tax credit. Applicants will need to demonstrate how the equipment is increasing access to or lowering prices for healthy food in LILA communities. For more information, visit the Frequently Asked Questions page.

If you aren’t sure if equipment you plan to purchase would be eligible for a CFA tax credit, you can submit a letter of eligibility application to CDA before purchasing. The department will process these letters on a first-come, first-serve basis.

Submitting a request for a letter of eligibility is not a requirement to apply for a tax credit and does not guarantee that CDA will issue a tax credit upon application.

What are Low Income, Low Access (LILA) Communities?

Small Food Retailers and Small Family Farms must be located in or serve a Low Income, Low Access (LILA) community in Colorado to be eligible to receive funds. These communities are determined by census information. Please see the Frequently Asked Questions page for more information.

Step 3: Apply for the Tax Credit

Gather your eligibility documentation, your proof of purchase documentation, and a letter of support (only required for small family farm applicants) and fill out the application below. We will request additional documentation if we need it.

In your application answers, you should demonstrate the impact of your equipment by highlighting how you're reaching LILA communities and / or reducing the cost of healthy food.

Read more about this on the Tax Credit FAQ page.

Tax Credit applications will be accepted and processed during three periods in 2024, as funds are available. The first period will close on August 30, 2024 at 3pm MST.

Please note: there may only be two or one application periods in a given year depending on funding availability.

Apply for the Tax Credit

Solicitar el crédito fiscal

Don't forget to submit required documentation on box.com. Combining all the required documentation into a single zip file or packet is strongly encouraged. Documents must be titled with the legal business name of the applicant. Unlabeled documents will not be accepted.

Instructions for submitting your application are provided here in English and Spanish.

Step 4: CDA will process and evaluate your application

During each application review period, applications will be organized according to their priority grouping, and reviewed and awarded in that order. In each group, rural applications will be reviewed and awarded before urban applications, and applications with the highest impact will be reviewed and awarded before lower impact applications.

First priority grouping: Equipment applications from businesses who have not received a CFA tax credit
Second priority grouping: Applications from businesses who have not received a CFA tax credit this calendar year
Third priority grouping: All other applications, in order of smallest dollar request to largest
Lowest priority grouping: Applications from businesses who were found to misuse equipment purchased with a CFA tax credit

Step 5: Receive your certificate

If your business and expenses are eligible, and funds are available, CDA will issue a certificate to your business stating the value of your tax credit. This tax credit will be applied toward the taxes you owe to the state of Colorado.

The tax credit amount will be 85% of the purchase price of your equipment in 2024 and 75% of the price of your equipment in subsequent years.

You will also be asked to sign an attestation stating your understanding of program goals and proper use of the equipment.

Step 6: File your taxes

Include the tax credit certificate when you file your state business taxes (the Colorado Department of Revenue will already have this information on file, from the CDA).

The amount of the credit will be deducted from your taxes owed to the State of Colorado.

If your tax credit amount exceeds what you owe the State of Colorado in taxes that year, the difference will be paid to you by the Department of Revenue. For more information on filing a Colorado income tax return, visit the Department of Revenue's website at Tax.Colorado.gov.

Keep in touch

CDA wants to know how these tax credits are helping to create more opportunities for Coloradans living on a low income to buy healthy groceries.

CDA will send you a short survey six months to one year after your tax credit certificate has been issued, asking how your capacity to sell, distribute, or grow healthy food to low income Coloradans has increased.

You can also sign up for updates about the Tax Credit Program.

Other important information

A maximum of $10 Million in tax credits will be issued each year for this program between 2024 - 2030.

Once $10 Million in tax credits have been issued in a calendar year, no more credits will be issued that year.

To be eligible, equipment must be purchased in the calendar year for which the certificate will be issued.

CDA will display a Tax Credit Tracker on this website so that businesses may understand how much of each year’s fund has been allocated so far. This can help you determine your chances of receiving the tax credit, based on the amount of funds remaining for each year.

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