Great news if you have a business operating in the city of Newman, California.  The city has recently been designated at a new California Enterprise Zone by the State.  This is exciting for Newman and also Stanislaus County, which now boasts an EZ for every city within its borders.

This move by the state will assist in bringing new business to the city of Newman along with attracting local companies to continue operations at a more profitable level.

“An enterprise zone is part of the state’s ongoing effort to increase the number of jobs in California,” said Doug Sweetland, director of economic development for the Alliance.

“In this very difficult economy, it is a great time for businesses to take advantage of the benefits.”

Assemblyman V. Manuel Perez, has introduced AB 1159.  This bill extends the Sales or Use tax credit benefit of the Enterprise Zone (and TTA and LAMBRA) program to include a credit for the purchase of equipment related to renewable energy.  The bill would be in effect from 2009-2016.  Below is the relevant text of the bill:

17053.71.

(a) For each taxable year beginning on or after January
1, 2009, and before January 1, 2016, there shall be allowed as a
credit against the “net tax,” as defined by Section 17039, an amount
equal to the sales and use tax paid or incurred during the taxable
year by the taxpayer for the taxpayer’s purchase of qualified
property.

(b) For purposes of this section, “qualified property” means any
property used in an enterprise zone, targeted tax area, or a local
military base realignment area for the production or generation of
renewable energy.

California recently proposed a new tax credit similar to the federal credit called the Work Opportunity Tax Credit (“WOTC”).  The proposed California credit would work together with the Enterprise Zone tax credit (“EZ”) but without the boundary requirement.  The tax would be worth up to $2,400 of wages paid to qualified employees.  Click here to read the full text of the proposed tax credit.

To take advantage of this tax credit, click here for a free consultation with the C & I team.

WOTC is a Federal credit that provides you with a dollar for dollar tax credit of:

• $2,400 for each new adult hire;
• $1,200 for each new summer youth hire,
• $4,800 for each new disabled veteran hire, and
• $9,000 for each new long-term family assistance recipient hired over a two-year period.

Employees can qualify based on any one of nine target groups.  There are strict requirements for submitting paperwork to qualify employees for the credit.

On February 27, 2009, the California Board of Equalization ruled that Enterprise Zone (“EZ”) tax credits can be used to offset Alternative Minimum Tax (“AMT”).   The BOE held that the FTB misinterpreted a 1993 bill intended to allow taxpayers to use the EZ credits below the AMT.  This means that taxpayers eligible for the EZ credits can reduce their tax obligations even further and seek refunds of AMT paid in previous years.  Here is a link to a summary of the BOE Decision.

To take advantage of these tax credits, contact us today for a free consultation.

California legislators have proposed legislation that would allow taxpayers to claim Enterprise Zone tax credits to offset any income, rather than just income derived from the same zone.  We’ll keep our eyes on this.  Here is the text of AB 341:

The Enterprise Zone Act provides for the designation by the Department of Housing and Community Development of enterprise zones, pursuant to which certain entities may receive regulatory, tax, and other incentives for private investment and employment.

The Personal Income Tax Law and the Corporation Tax Law allow a taxpayer to claim certain tax incentives, including credits, for
activities conducted in an enterprise zone.

This bill would state the intent of the Legislature to enact legislation to revise the enterprise zone credit system to allow a taxpayer authorized to claim those credits to apply the aggregate value of all enterprise zone-related income tax credits toward the taxpayer’s tax liability.

Continuing on my post from this past Wednesday, I wanted to spotlight several businesses in California that have successfully taken advantage of the California Enterprise Zone tax credits.  Today I want to showcase Chaparral Motorsports, a company that has over 200 employees and has been in business since 1980.  They have continued to have success utilizing the tax credits afforded them from the San Bernardino Valley Enterprise Zone.

Here is what the owner had to say about the California EZ process, “The first year we filed for employee tax credits and these made a considerable difference in our bottom line. This year, we will also file for tax credits for equipment we’ve purchased. The savings may be double of last year.  Taxes and fees continue to increase year after year in California, making it harder and harder to operate a business in this state. Any amount we can save makes a huge difference.

In an economy like the one we are dealing with now, these incentives are more important than ever to help protect jobs. Certain aspects of the Enterprise Zone program have allowed us to train and employ more workers. Without the San Bernardino Valley Enterprise Zone, there would be fewer people employed.

We are not the only business with this sentiment. California’s Enterprise Zone program is vital to the continued success of hundreds of businesses throughout the state.”

As you have most likely heard by now, California lawmakers have passed a budget that is structured with the goal of cutting the state’s 42 billion dollar deficit.  In order for the bill to pass, concessions were made on both side of the aisle, with republicans and democrats reaching compromises on the key issues of:

• Spending cuts
• Tax increases

I know that seeing the phrase ‘tax increases’ is enough to scare any small business owner, however you will be pleased to know that the California Enterprise Zone program was not affected by the passing of the budget.  This means that companies operating in one of the EZ regions will be able to take full advantage of the tax credit program.

To speak with someone regarding how you can take advantage of the available tax breaks for your company, click here to contact us today!

It seems you cannot open a newspaper or financial magazine without being informed of the ever-increasing unemployment rate in the US, and the State of California unfortunately continues to be a leader in this statistic.  With both the state and Federal Government focusing 100% of their attention on how to curb this negative trend, it seems apparent that now is the time when small to medium sized businesses should be embracing the California Enterprise Zones.

A stimulus package will have only a limited effect on your bottom line, and your company most likely will never have access to a bailout fund, however the California EZ system allows you to take advantage of numerous tax credits that could save thousands or even tens of thousands of dollars per year.  But don’t take my word for it.  Listen to an actual small business owner here in California who has successfully utilized the many benefits of the EZ program with great results.

Daniel Morrow owns a small business in the high-tech sector of the market and had this to say about the importance of the California Enterprise Zones, especially in how they relate to employment.

“I can unequivocally say that certain aspects of the enterprise zone program that we have been able to take advantage of at Opt-Test has allowed us to train and employ more workers.  Let me make this perfectly clear for those academics in the audience – without the Shasta Metro Enterprise Zones there would be more people unemployed or working at much reduced wages here in Shasta County.  We are just one company, but I have spoken with numerous other business owners in the enterprise zone here who share my experience and my sentiment.  The enterprise zone program in California is vital to the continued success of hundreds of businesses throughout the state.”

In an effort to jumpstart the local economy, the Salinas Valley area has been granted a California Enterprise Zone approval status.  This means that businesses operating in the Salinas Valley area will be able to take advantage of numerous tax breaks.

The area includes the cities of Salinas, Gonzales, Soledad, Greenfield and King City as well as Monterey County areas connecting the five cities along Highway 101 and additional Monterey County properties identified in the map boundaries.

If you have a business in the Salinas Valley area, click here to contact us directly.

If you’re a business owner with a company operating in one of the many California Enterprise Zones, why haven’t you taken advantage of these tax credits?  Most business owners I speak with complain constantly about the high tax rates, however for some reason or another choose not to explore the EZ Tax Credit program.  Jim Zauher reported for Redding.com the following story:

I had one owner tell me that he decided not to take advantage of the enterprise zone because he was told “they” would be coming in and looking at his books. When I asked who “they” were, he couldn’t say.  The reality is that once a business and/or its tax preparer determines that it has qualifying equipment (computers and fax machines qualify as well as processing equipment) or employees, the tax credits are taken as part of the normal tax preparation.  There is no oversight of the process. A voucher is required as back-up documentation for the qualified employee credits.

With the current state of the economy, it is vital to take advantage of every tax credit available, and the California EZ system is one of the best methods of accomplishing this feat.  Contact us directly to discover how much money you could be saving thorugh this program.