Mission Foods is taking advantage of the new Valley EZ by opening up a $50 million facility that will produce 400 new jobs.  Read the San Fernando Valley Business Journal article.

Enjoy.

October Tax News

T3 picks the Modesto EZ for its new facility, creating more jobs.

Partnering with the Stanislaus Alliance Worknet and the California Enterprise Zone Administrator have provided major tax incentives for California job creation. Grand opening and ribbon cutting on October 8th at 1:00 pm.

Due to a 37% growth over the last 3 quarters, T3-Direct Marketing, a full service marketing agency, has opened a new contact center, complete with 96 agent workstations, executive offices, customer service and quality control depts.

T3 is now poised to be a major player in the inbound telemarketing space and expects to create over 60 new jobs in the next three quarters that include quality assurance, customer service, order fulfillment and inside sales.The T3 Direct Marketing Call Center is also located in a California Enterprise Zone, which offers substantial tax benefits to companies who create jobs and purchase new equipment. Please see CAEZ.org for more info on major tax advantages. 

Read the full article.

Mayor Villaraigosa stressed the need for LA to become more business friendly.  Specifically, he said he wants more expansions of LA’s Enterprise Zones.

Los Angeles Mayor Antonio Villaraigosa told members of the business community at the United Chambers of Commerce of the San Fernando Valley and Region’s honorary luncheon that he will continue pushing business-related reforms for the remainder of his term.

At the Mayor’s luncheon Sept. 22, Villaraigosa spoke of the recent steps he and his business team has taken to boost the city’s economic climate.

Those included pushing for the expansion of the city’s California Enterprise Zone in and around the San Fernando Valley, passing an ordinance that cuts taxes for local Internet businesses, passing a business tax holiday, and proposing a local preference ordinance, which would give local businesses more leverage in bids for government contracts.

The full San Fernando Valley Business Journal article can be read here.

Pharmaceutical giant Bayer cut 39 jobs, but is not at risk of leaving the Oakland Enterprise Zone reports the Bay Citizen.  Read the article here.

Here is the September edition of the FTB’s Tax News.

A strong editorial urging approval of the West Valley enterprise zone appears in today’s Desert Sun.  Read it here.

The Sacramento Business Journal ran the following Op-ed piece last Friday.  The writer is Enita Elphick, business owner of Unity Forest Products.  Again, the business world is speaking out in favor of the EZ programs against the backdrop of dueling statistics about the program’s effectiveness.

This is no time to be ending the state’s enterprise zone program

California’s enterprise zone program is one of the state’s most important economic development tools.  The program was created in 1984 in order to stimulate business and create jobs in depressed areas with low incomes and high unemployment. The goal is to entice businesses to set up shop, hire locally and hire people with barriers to employment — and revive the local economy by providing companies with tax incentives and other benefits.

Surprisingly, there are some legislators in Sacramento looking to end the enterprise zone program, threatening to stop what little job creation is taking place. This makes no sense. Over the past 25 years, enterprise zones have proven to be beneficial to California’s economy and employment rate.

The program is beneficial to California as a whole. The California Association of Enterprise Zones website reports that “zones account for nearly 30,000 jobs generated over a 10-year period, and that growth brought funds to the state through income tax, sales tax and corporate tax.”

Similarly, as individuals are hired, their dependence on social services decreases.

As owner of Unity Forest Products, an organization that has planted its roots within one of California’s 42 enterprise zones, I can say that our organization would not be here today if it weren’t for the program. The current economic hardships so many of us are facing make it extremely difficult to do business, especially in California. If the program did not extend benefits to our company, we would not have been able to continuously expand while increasing our work force and remain viable during these tough economic times.

Unity Forest Products was a startup in 1988, and without the hiring tax credits and other incentives the enterprise zone offers, I would not have been able to obtain the loans necessary to start the business. Additionally, we began with four employees, but because of what the enterprise zone allowed us to accomplish, by 2008 we had over 120 employees.

From a job creation point of view, comparing all of the job programs at the federal or state level, the enterprise zone program is by far the most productive. In addition, it paves the way for business growth in disadvantaged communities.

The enterprise zone program is one of the few remaining programs that make sense. If the legislature comes back from summer recess and votes to end the enterprise zone program, it would be devastating for our business, the employees who rely on us for their livelihood and the economic forecast for the state.

John Shaffery Chairman, SCV Chamber of Commerce wrote this spirited op-ed piece in today’s Santa Clarita Vally Signal:

Your article about enterprise zones (“In the zone: A local look at the effectiveness of enterprise zones,” August 8, 2010) made a number of good points, but I think it is important to understand more about the importance of this economic tool for businesses – especially those in the Santa Clarita Valley.

To try and assess if enterprise zones are good or bad is the same as saying we’re not sure if a patient will react to an antidote – if you don’t give them the antidote then you can be assured of one thing: the patient will get sick and die.  California businesses have been sick and on life support for a number of years now. Businesses that want to be in California are trying to find every reason to stay here, and the enterprise zone tax credit program is a tool they can use to make their businesses more economically viable.

Let’s look for a moment at the California Legislative Analyst’s office estimate that enterprise zones cost the state $400 million. The CLA does not discuss the other side of this economic equation to determine the number of potential lost jobs if some companies didn’t have this tax credit available.

What if 50 California companies moved to another state that offered similar or more aggressive tax incentives? If each of those companies employed 10 people, that would mean 500 jobs lost in this state. Over a one-year period that may not seem like a lot. However, if you multiply that number by 10 years, you end up with 5,000 jobs going elsewhere.

The point to remember is that these types of tax incentives not only increase hiring, but they also are an incentive to keep companies from leaving. California has one of the most highly taxed, legislated and regulated business climates in the nation, and we can’t continue to think companies will just stay here because of our good weather and nice beaches.

Enterprise-zone tax credits are a vital part of the SCV’s economic engine as well as in 41 other areas across California. Every business owner and taxpayer should demand Sacramento leave the enterprise-zone tax credits alone.

Harbor Gateway is seeking EZ status to attract business and help create jobs for the unemployed.  “It would be a significant benefit to businesses,” said Bill Johnson, manager of the Los Angeles County Economic Redevelopment Division.

Given the current EZ debates, it is critical to highlight the requirements to become an EZ.  As the article states, “To qualify, the area must have a high unemployment rate and a high volume of low-income residents.”  Enterprise Zones are built around areas of high unemployment and low income residents.  Only those areas can even apply for one of the limited number of EZs.  The subsequent business build up directly benefits the less fortunate.   Union leaders now characterize the EZ program as a tax loophole, even though the EZ program directly benefits the workers the unions claim to defend.

The full article can be read here.