Today, the FTB released the list of cities and district sales tax rates for numerous cities and counties around the state. The FTB also announced that BOE “Specialists” will be canvassing certain zip codes to enforce the business permits to ensure tax compliance.

• New Local Sales Tax Rates Take Effect July 1
• California State Board of Equalization Specialists Verify Business Permits

As he put in the subject line of his email “Them Changes” are happening at HCD. Frank Luera, head of California’s Economic Development Section in charge of the Enterprise Zone program recently announced that he is retiring from the HCD. Few individuals have been more involved or more instrumental in the Enterprise Zone program. Frank worked tirelessly to advance the Enterprise Zone program. I even recall getting email responses from him late and night and on weekends. How many government officials can you say that about!

Frank did not let on regarding what his future holds, but left his options open. His last day with HCD will this Friday, June 19. At C&I, we want to thank Frank for all of his insight and hard work and wish him well wherever he may end up.

The competition for new Enterprise Zones is heating up this year, and one of the cities still waiting to hear about its approval is Needles, CA.

And the Needles Desert Star is reporting the wait is not over, “The city of Needles will have to wait a little longer to find out if it has been awarded enterprise zone status. The announcement, expected on May 18, has been delayed until some time in June. California Department of Housing and Community Development has informed the city that winners have not yet been selected.”

With only four enterprise zones being designated this year, 14 new city applicants will go without the coveted program benefits.  The city is pushing for the designation in order to augment its current strategy to attract new businesses to the region.

Here is Craig Johnson’s recent retort in support of California’s Enterprise Zones. Enjoy the audio.

Dear CAEZ Members & Friends of CAEZ,

In response to the PPIC report, which was making it’s debut in Sacramento today, I appeared on San Francisco radio station KQED this morning along with one of the co-author’s of the study, Jed Kolko. The audio of the show is linked below.

Click for Audio

We will continue to face the slings and arrows of our foes throughout the remainder of the legislative calendar and I urge each of you to be prepared to share the many successes of our program.

Thank you all for your continued support of the program and CAEZ.

CRAIG JOHNSON
President
California Association of Enterprise Zones

CAEZ president Craig Johnson wrote this letter today to the local Enterprise Zone community:

Dear CAEZ Members and Friends of CAEZ,

Following the legislative hearing for AB 1139 on April 29, CAEZ pledged to work with Assemblyman John Perez and the sponsors of AB 1139. To that end, the attached letter was mailed this morning to Assemblyman Perez and all of the Members of the Assembly Committee on Jobs, Economic Development & the Economy. This letter addresses the numerous inaccuracies cited by the supporters of the bill, corrects the record about the program, it’s structure, mission and accomplishments.

CAEZ continues to monitor legislative activity in Sacramento that may affect our program, especially as the Legislature continues to grapple with record budget deficits. I will keep you apprised of any urgent matters that require a call to action of our Membership. Your response to AB 1139 assures me of your commitment to the defense of our program during perilous times.

Thank you again for your continued support of the Enterprise Zone program.

Sincerely,

CRAIG JOHNSON
President
California Association of Enterprise Zones

As California struggles with its recent budget problems, the FTB is still pushing the Enterprise Zone program to help California businesses.  In the June issue of FTB’s Tax News the FTB had this pitch about the California Enterprise Zone program.

June 2009 – The Enterprise Zone (EZ) tax incentive program was created in 1986 to help local businesses, and encourage outside businesses to locate in economically depressed areas. The federal government does not have a comparable economic development program or business tax incentives.

The EZ program has been around for quite some time, but there have been changes to the program that could affect your clients’ businesses.

Between October 2006 and March 2009, 34 California’s enterprise zones expired. Many of these jurisdictions chose to apply again with the California Department of Housing and Community Development (HCD) for a new designation along with new jurisdictions. Today there are 42 active or conditional designated enterprise zones. For a listing of expired, active, and conditional enterprise zones, go to hcd.ca.gov and search for EDA.

The re-designated zones are treated as two zones, the “Old Zone” that expired and the “New Zone.” In some cases, the jurisdictions added new geographic areas to the “New Zone” and in other cases, the jurisdictions removed areas that were once in the “Old Zone.” The following five business-related tax incentives are potentially available to a taxpayer doing business in an enterprise zone, so you may need to see if your client is doing business within one of these new geographic areas.
·         Hiring credit.
·         Sales or use tax credit.
·         Business expense deduction.
·         Net operating loss deduction.
·         Net interest deduction for lenders.

Enterprise zone tax incentives apply only to business activities and investments that take place after an enterprise zone has received final designation.

For more information on the EZ Credit, please visit ftb.ca.gov.

Yuba City has been working hard on developing the city into an economic haven for businesses throughout the state.  And it looks like the region’s enterprise zone is going to be at the forefront of its efforts.  Darin Gale as the city’s economic development manager had quite a bit to say about the work being done to make the city ever-increasingly more attractive to businesses.

Ashley Gebb, from the AppealDemocrat.com wrote, “Gale has already outlined quarterly goals to work on enterprise zone awareness, filling vacant commercial properties and making the city more attractive to development by cleaning up its corridors through construction and city ordinances.

A more intensified, concentrated approach can only benefit the city, Maan said.”

“We’ve always ranked at the bottom as far as unemployment goes,” he said. “It’s time we start figuring out what we can do to bring decent paying jobs to the area.”

As the State of California’s economy continues through the recession, the California Enterprise Zone program offers local businesses a great opportunity to save money and reap sizable tax benefits.  In another great demonstration of the power of the EZ program, EDC President Greg O’Sullivan thinks Shasta County can grow its economic job base, despite Sacramento.

With the recession forcing many companies to put expansion plans on hold, the EDC is focusing more on business retention, O’Sullivan said, promoting the Shasta Metro Enterprise Zone, which gives hiring credits to businesses.

In the past year, the enterprise zone has grown from about 800 credited employees to 1,300 credited employees, accounting for $13.5 million in hiring credits to companies, O’Sullivan said.

This is another great example of the potential of the EZ program, if you have a business that resides in an Enterprise Zone, contact us directly to see what benefits you are entitled to.

Click here for the Board of Equalizations June 2009 tax bulletin.