If you are like most of the readers of this blog, you follow California tax law very closely, and you will be very interested to know thatAB 1452 describes the new tax code changes that appear like they will be taking effect shortly.   If you want to know how this affects you or your clients, you can call us directly at (314) 550-1666 and we can help navigate you through how we can help you take full advantage of your available tax credits.  The official AB 1452 quote is below:

3. Limit business tax credits in 2008-09 and 2009-10: Limits the amounts of business incentive tax credits that can be used to reduce tax liability in 2008-09 and 2009-10. Use of credits will be limited to 50 percent of the taxpayer’s liability, and this increases General Fund revenue by $890 million in 2008-09 and $415 million in 2009-10. Taxpayers with net business income of less than $500,000 will be exempted from this change. Various tax credits are included in these amendments, including the Research and Development credit, the Enterprise Zone credit, and Low-Income Housing credits. Beginning in 2010, these amendments liberalize the use of credits such that businesses could assign credits to any affiliated corporation. This increases the use of tax credits in 2010, and thereafter, resulting in a loss of General Fund revenues.

I was recently quoted in the September issue of the EnVision Newsletter, written by BoNiha Lee, The article made some excellent points and I wanted to share them with you.  Portions of the article and my quotes are below:

“The primary benefit associated with enterprise zones are tax credits for hiring eligible employees, said Steven Dotan, president and CEO of C&I Tax Consultants of Los Angeles. Dotan and his company work as consultants for both businesses and accountants throughout California.

“It’s a dollar-for-dollar tax credit for every qualified employee they hire,” Dotan said. “Not all employees qualify, but enough of them will. You’re talking about a fair enough money for any company.”

The credit is based on a percentage of the employee’s wages over the first five years of their employment. In the first year of employment, 50 percent of an employee’s wages can be claimed. The amount decreases by 10 percent every year after that for five years.

Another great incentive is the sales or use tax that helps businesses get the sales tax back on purchases of machinery. The credit can be used on items such as computers and telephones.

“It’s a good tool, because it can knock off your taxes,” Dotan said. “You’re still gathering credits and offsetting your income and offsetting costs.”

Many businesses do not take advantage of the credits because they either don’t understand how it works, do not have an accountant who knows enough about it to help, or think there is too much work associated with it to see a benefit, according to Dotan and economic development offices.”

I’m excited to launch this blog, which I hope will become your information source for news and opinions focused on the California Enterprise Zones and tax professionals.  And we’ve launched this blog early this morning, the week directly after National Payroll Week.

National Payroll Week celebrates the hard work by America’s 156 million wage earners and the payroll professionals who pay them. Together, through the payroll withholding system, they contribute, collect, report and deposit approximately $1.7 trillion, or 64.2%, of the annual revenue of the U.S. Treasury.

And it is with the accounting industry in mind I would like to discuss the what we do as a company, C & I Tax helps companies and tax professionals in each of the California Enterprise zones take full advantage of all the available credits for businesses operating in these locations.

Are you a tax professional who has clients in one of these enterprise zones?  See below for a full list of the enterprise zones:

Los Angeles Region

• Antelope Valley (Palmdale, Lancaster)
• Compton
• Gardena
• Hollywood
• Huntington Park
• Long Beach
• Los Angeles – Central Downtown*
• Los Angeles – East Side*
• Los Angeles – Harbor Area
• Los Angeles – Mid Alameda Corridor
• Los Angeles – Northeast Valley
• Lynwood
• Pasadena / Altadena
• Santa Clarita
• Southgate
• Wilmington

Central Valley

• Arvin
• Bakersfield/Kern (SE Bakersfield)
• Barstow
• Delano
• Fresno City*
• Fresno County
• Kings County
• Lindsay
• Madera
• Merced / Atwater
• Porterville
• Shafter
• Stanislaus County (Ceres, Modesto, Turlock)
• Watsonville

Orange County Area

• Santa Ana*

San Diego Area

• San Diego (Includes cities of Chula Vista and National City)*

Inland Empire/Imperial Valley

• Calexico
• Coachella & Indio
• Colton
• Imperial Valley (Brawley, Unincorporated Imperial County)
• Riverside
• San Bernardino

Northern California

• Eureka
• Oroville
• Shasta Metro (includes cities of Redding and Anderson)
• Shasta Valley

Sacramento Area

• Sacramento (Includes North Sacramento, Florin / Perkins and Northgate)
• Stockton
• Yuba Sutter

Bay Area

• Oakland*
• Pittsburg
• Richmond
• San Francisco*
• San Jose

* indicates that Federal credits are also available.

Created by lawyers and CPAs, C & I are the Enterprise Zone tax credit experts. We do all the work for you to capture the Enterprise Zone credits. FIND OUT HOW MUCH YOU CAN SAVE!

With the economy in a down cycle, you can’t afford to pay more in taxes than you should. Let us help you reduce your tax burden and increase your cash flow.

Each of the posts from here will discuss tax news as it happens along with featuring each of the California enterprise zones in detail.