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.

This blog is dedicated to discussing the California Enterprise Zone program in detail, so we’re obviously bias on the benefits that these zones gives to businesses.  However this past week a new study by several leading USC professors reveal that the California Enterprise Zones are truly a bright spot for the State and can aid in re-building local economies.  This study took into account decades of economic data in the state and proves the program not only works, but also will continue to help the state and its citizens.

“If you’re going to eradicate a program, you need to evaluate it on the number of outcomes and we found these programs had a positive impact,” said Swenson, a professor at the USC Marshall School of Business and Leventhal research fellow, who is an expert on state taxation. “It’s the only program we have that gives tax breaks and in a time of economic downturn. The last thing you’d want to do is cut a program that increases jobs and decreases poverty.”

They’ve discovered statistical data illustrating that enterprise zone programs aid local economic sectors by creating jobs and increasing incomes, as well as reducing poverty and unemployment rates.

“For California, we found that enterprise zones increased employment by 2.2 percent and increased the fraction of houses with wage and salary income by 2.1 percent,” said Swenson, adding that the programs have had a positive effect for all categories in all states that have them.

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.”

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.”

Atwater is a progressive community when it comes to assisting and cultivating business. The City’s growing residential development is spurring commercial investment, construction, and services. Additionally the City has an established history of food processing, farming, and light manufacturing companies.

The City of Atwater has several programs to assist local businesses in being more prosperous, including:

• State of California Enterprise Zone Designation
• Foreign Trade Zone Designation
• Local Revolving Loan Fund
• Entrepreneur Training Program
• Access to business counseling and customer service training programs
• Recycling Market Development Zone Designation

If you have a business in the city of Atwater, contact us directly for a free Enterprise Zone consultation.

Located in California’s Central Valley, (Madera Population year 2000: 43,207. Estimated population in July 2006: 54,959) offers affordable small-town living on the periphery of a large metropolitan area (Fresno is 18 miles south). It’s a place where families can afford spacious houses and their kids can join 4-H or play sports a few blocks from home.

Madera is the home of Valley Children’s Hospital, one of the largest children’s hospitals in the U.S. Educational needs are served by the Madera Unified School District, featuring 20 schools; among them is a California Distinguished Elementary School. College courses and training are available through State Center Community College and CSU, Fresno.

If you have a business that operates in Madera, click here to contact us for a free consultation.

In June 1995, the community of Lindsay was named the only unanimous choice as an All-America City for 1995. Some 23 citizens of Lindsay went to Cleveland, Ohio to participate in the finals of the 1995 All-America City Awards. This extremely prestigious award is given annually to the ten cities in the United States which have provided outstanding examples of community problem solving. These cities are recognized not so much for their current status but for their innovation and hard work at identifying and addressing community problems.

This program is sponsored by the National Civic League and the Allstate Foundation. It is anticipated that other cities in America can benefit from the trails blazed by the 1995 All-America Cities. This is Lindsay’s story.

Nestled at the base of the Sierra Nevada Mountains in California’s rich San Joaquin Valley, Lindsay historically has depended on seasonal agricultural production and processing, with citrus and olive growing as the local mainstay. As the region grew and developed, however, many downtown businesses moved to area malls, and low-income migrant workers settled in Lindsay, resulting in a major ethnic shift from Anglo to Hispanic. Faced with a decaying downtown, a stagnant tax base, an increasingly needy population, and an agriculture-dependent economy, Lindsay began to fight back in 1986, establishing a downtown redevelopment project and founding Healthy Kids-Healthy Lindsay to spearhead education on cultural diversity and deliver health and social services to needy families.

If you have a business in this city, contact us directly to see how much you can be saving through the enterprise zone tax credits.

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.

With the number of tax incentives and economic stimulus plans being put into place right now, it can quickly and understandably become confusing.  Cutting through the excess language it is important to understand that the $1 trillion in benefits  will be received by two new WOTC target groups:

• Incentives for new jobs
• Incentives to hire unemployed veterans and disconnected youth.

Any unemployed veteran or disconnected youth who begins work for the employer during 2009 or 2010 shall be treated as a member of a targeted group.

Definitions

The term `unemployed veteran’ means any veteran who is certified by the designated local agency as having been discharged or released from active duty in the Armed Forces during 2008, 2009, or 2010, and being in receipt of unemployment compensation under State or Federal law for not less than 4 weeks during the 1-year period ending on the hiring date.

The term `disconnected youth’ means any individual who is certified by the designated local agency as having attained age 16 but not age 25 on the hiring date, as not regularly attending any secondary, technical, or post-secondary school during the 6-month period preceding the hiring date, as not regularly employed during such 6-month period, and as not readily employable by reason of lacking a sufficient number of basic skills.’.

When Does This Start?

The amendments made by this section shall apply to individuals who begin work for the employer after December 31, 2008.

If you want more information, please contact us directly here.