Santa Ana, CA, has a rich commerce heritage. One of Santa Ana’s most notable businesses is the Rickenbacker musical instrument company, whose electric guitars and bass guitars earned fame in the hands of many rock and roll legends. Santa Ana is also the home of the First American Corporation and Ingram Micro, and the original Glenn L. Martin aviation company, which later merged with the Lockheed Corporation to form the largest aircraft and weapons manufacturing corporation on the planet, Lockheed Martin.

If you are joining the ranks of these prestigious companies in Santa Ana and want to see what types of tax benefits you can take advantage of, please contact us for a free consultation.

The Los Angeles Mid-Alameda Corridor Enterprise Zone encompasses the entire City of Huntington Park. On the October 15, 1986 the City of Huntington Park was designated as an Enterprise Zone by the State of California.  Businesses already in the Zone can qualify for benefits, as can new businesses relocating or expanding into the Huntington Park area.

Incentives

Incentives of the Enterprise Zone program include:

• Sales and Use Tax Credit:
  California income or franchise tax may be reduced by the amount of Sales or Use Tax paid on certain machinery purchased (for exclusive use in an Enterprise Zone).
  $1.45 million or more per year in tax credits is available for qualifying machinery.
• Hiring Credit:
  A qualified business may reduce its state income tax by the amount of wages paid to one or more qualified employee(s) over a five-year period. $23,400 or more in tax credits is available per qualified employee. Some of these employees may also qualify an employer for a Federal tax credit, Worker Opportunity Tax Credit (WOTC), of up to $2,100.
• Business Expense Deduction:
  Part of the cost of the certain property purchased for exclusive use in the Enterprise Zone may be deducted as a business expense in the first year it is placed in service. (Amount of deduction changes annually; call for current value).
• Net Operating Loss Carryover:
  Up to 100% Net Operating Loss (NOL) Carryover for individuals or corporations doing business in the Enterprise Zone may be carried over for up to 15 years to reduce the amount of taxable income generated within the Enterprise Zone for those years.
• Net Interest Deduction for Lenders:
  A deduction from income is allowed on the amount of “net interest” earned on loans made to a trade or business located exclusively in the Enterprise Zone.

This is a great city to do business in, and on the October 15, 1986 the City of Huntington Park was designated as an Enterprise Zone by the State of California.  Businesses already in the Zone can qualify for benefits, as can new businesses relocating or expanding into the Huntington Park area.

What specific Incentives for businesses operating in this zone?

Incentives of the Enterprise Zone program include:

• Sales and Use Tax Credit:
  California income or franchise tax may be reduced by the amount of Sales or Use Tax paid on certain machinery purchased (for exclusive use in an Enterprise Zone). $1.45 million or more per year in tax credits is available for qualifying machinery.
• Hiring Credit:
  A qualified business may reduce its state income tax by the amount of wages paid to one or more qualified employee(s) over a five-year period. $23,400 or more in tax credits is available per qualified employee. Some of these employees may also qualify an employer for a Federal tax credit, Worker Opportunity Tax Credit (WOTC), of up to $2,100.
• Business Expense Deduction:
  Part of the cost of the certain property purchased for exclusive use in the Enterprise Zone may be deducted as a business expense in the first year it is placed in service. (Amount of deduction changes annually; call for current value).
• Net Operating Loss Carryover:
  Up to 100% Net Operating Loss (NOL) Carryover for individuals or corporations doing business in the Enterprise Zone may be carried over for up to 15 years to reduce the amount of taxable income generated within the Enterprise Zone for those years.
• Net Interest Deduction for Lenders:
  A deduction from income is allowed on the amount of “net interest” earned on loans made to a trade or business located exclusively in the Enterprise Zone.

The City of Brawley is in the heart of the Imperial County, which is located in the s­outh­eastern part of the State of California. It is situated approximately 210 miles southeast of Los Angeles, 126 miles east of San Diego, and 30 miles north of Mexicali, Mexico. Brawley is a general law city incorporated in 1908 and has a Council Manager form of government. The 20­07 population is estimated to be 25,694 as reported by the State Department of Finance.

The city of Brawley has a wide range of business credits, if you have a company in the city, please contact us to see which credits you qualify for.

San Jose is the 3rd largest city in California, and the 10th largest in the US. It is the county seat of Santa Clara County. San Jose is located in Santa Clara Valley, at the southern end of the Bay Area, a region referred to as Silicon Valley. Once a small farming city, San Jose became a magnet for suburban newcomers in new housing developments between the 1960s and 1990s, and is now the largest city in Northern California. The United States Census Bureau population estimates the city’s population for 2007 as 939,899.

Companies located within the City of San Jose Enterprise Zone may be eligible to receive a tax credit for hiring individuals meeting certain qualifications. If you meet any of the following eligibility criteria you may qualify for the Enterprise Zone hiring credit.

If you want to explore the available tax credits you are entitled to, contact us directly for a free consultation.

The City of Ceres continues to grow at a rapid pace.  Over the past decade Ceres has experienced a nearly 90% increase in sales tax generated. Within the last five years development projects have included:

• WinCo Foods Distribution Center 107 acres/720,000 square feet
• Home Depot 10.67 acres/137,156 square feet
• Central Valley Marketplace 8.06 acres/83,710 square feet
• Food-4-Less
• Banking
• Dining
• Service
• Developing projects include the Ceres Commerce Center, an 8.8-acre, 87,000 square foot business park on Mitchell Road at the northern gateway into town. When complete the center will consist of 24 buildings; current construction includes buildings of 3,000 to 6,000 square feet.

At Ceres southern entrance—Mitchell Road at Highway 99—the 420-acre South Gateway Regional Commercial Center is also being developed. The center’s first large retail anchor will break ground in 2007 and major infrastructure projects, including the Service/Mitchell roads interchange are in process.

The Ceres Enterprise Zone encompasses most of the city’s industrial and commercial areas and includes 6,804 acres. An application is now in process—as part of a countywide effort—to expand the Zone by 132 acres, taking in nearly all commercial land on Mitchell Road. Property owners in Zone can take advantage of tax, financial and development incentives and business assistance.

Redlands has always been a popular place for businesses to re-locate due to its proximity to the large Southern California metro areas while still maintaining a lower price of living compared to nearby cities. However it appears that the city of Redlands may soon be able to attract companies by being added to the state’s Enterprise Zone program.

If approved it means that the city would be able to attract new businesses while being able to retain current companies with attractive tax credits.

Joy Juedes from ‘The Sun’ reports, “Redlands soon may have another carrot to dangle in front of businesses.
The city Redevelopment Agency is looking into making 200 to 300 acres north of the 10 Freeway part of the San Bernardino Valley Enterprise Zone, according to agency director Dan Hobbs. “It makes Redlands a more attractive place to locate,” said Redlands-based economist John Husing. The San Bernardino Valley Enterprise Zone is part of the state Enterprise Zone project, which targets “economically distressed” areas, Hobbs said.

The State of California designated a limited number of Enterprise Zones throughout the state to encourage business expansion. For businesses located within an Enterprise Zone, this translates to California tax savings and incentives that can substantially reduce their operating costs. When those incentives are coupled with the additional local incentives, the opportunities and savings are greatly enhanced.

Located in Central California, the Stockton/San Joaquin Enterprise Zone provides business with easy access to all major markets. Interstate 5, State Highway 99, an airport, a nationwide railway system (Burlington Northern Santa Fe and Union Pacific) and the Port of Stockton (on the Deepwater Channel) provide our Enterprise Zone businesses with direct links to world-wide markets.  In addition to the tax incentives for businesses, the Stockton/San Joaquin Enterprise Zone has readily available and favorably priced properties (improved and unimproved), a semi-skilled and skilled workforce, and a public/private network that is committed to providing companies with a pro-business environment.

The Stockton/San Joaquin Enterprise Zone provides businesses with the following savings:

State Tax Credit Incentives

• Hiring Credit ($31,000+ per new employee over a five-year period)
• Sales & Use Tax Credit (On machinery purchases for manufacturing)
• Business Expense Deduction (Up to $20,000/year on tangible personal property)
• Net Operating Loss Carryover (Up to 100% carryover to future years)
• Net Interest Deduction for Lenders (May result in 3-4% increase on return of investment)

Local Incentives

• Reduced Fees -50% discount on Building Permit, Plan Check, Use Permit and Variance Fees
• Development Coordination
• Early Project Review (ERC) Meetings
• One-Stop Permit Centers
• Fee Deferral Program
• Fee Estimates
• Utility Tax Rebate
• Commercial Property Transfer Tax Rebate Employee

Job Recruitment

• Customized Staff Recruitment services at no charge
• On-the Job Training Programs. Wage reimbursement for hiring & training qualified employees
• Specialized Training Programs tailored to your company’s specific needs

Financing Opportunities

• Small Business Administration (SBA) Financing SBA 504 and 7A – discretionary loan packaging fees are waived or deferred
• San Joaquin County Revolving Loan Fund (RLF) Loan packaging fees waived and discounted interest rate
• Stockton’s Façade Improvement Forgivable Loan Program and Downtown Financial Incentive Program

The Enterprise Zone Program targets economically distressed areas throughout California. Special state incentives encourage business investment and promote the creation of new jobs. The purpose of the program is to provide tax incentives to businesses and allow private sector market forces to revive the local economy. On November 6, 1991 the State designated the Shasta Metro Enterprise Zone, which expired on November 5, 2006. Shasta County applied for a new zone and received final designation effective November 6, 2006 to November 5, 2021. The new zone has some differences in boundaries, but encompasses all of the industrial and most of the commercial zoned areas.

SHASTA METRO ENTERPRISE ZONE BENEFITS

The state offers the following tax credits and benefits that reduce the cost of hiring new employees and investing in equipment in the Shasta Metro Enterprise Zone:

• Hiring Tax Credit
• Sales and Use Tax Credit
• Business Expense Deduction
• Net Operating Loss Carryover
• Deduction for Lenders
• Bid preference on State of California contracts

HIRING TAX CREDIT

If you regularly hire new employees or you are planning an expansion, this tax credit can save you thousands of dollars. By hiring “qualified” employees, you can claim up to 50% of your employee’s wages in the first year of employment. The credit percentage decreases by 10% annually, phasing out after five years.

Hiring Tax Credit Vouchers must be processed through our vouchering agent at the Smart Business Resource Center. Please visit the Smart Business Resource Center for more information

Targeted Employment Areas: Residents of certain designated lower income areas can qualify Enterprise Zone employers for substantial hiring credits. Click here to see if an employee’s address is within the Targeted Employment Area (TEA).

SALES AND USE TAX CREDIT

Individuals, partnerships and limited liability companies may claim a credit equal to the sales or use tax paid or incurred on the first $1 million of qualified machinery purchased. For corporations, the limit goes up to $20 million. Some lease options may qualify as well.

Qualified property is machinery or machinery parts used to:

• Manufacture, process, fabricate, or otherwise assemble a product;
• Produce renewable energy resources; or
• Control air or water pollution.

In addition, qualified property is:

• Data processing and communications equipment including, but not limited to, computers, computer-automated drafting systems, copy machines, telephone systems, and fax machines; and
• Motion picture manufacturing equipment central to production and postproduction, including but not limited to, cameras, audio recorders, and digital image and sound processing equipment.

The business must use the property exclusively within the boundaries of the Enterprise Zone.

BUSINESS EXPENSE DEDUCTION

This provision can make start-up or expansion less expensive by allowing you to expense out the cost of equipment in the first year it is placed in service, rather than depreciating the cost of the property over its useful life. Enterprise Zone businesses may elect to treat 40% of the eligible cost of qualified property as a business expense rather than a capital expense.

Eligible property includes those items that you would expect to depreciate: tangible personal property (excluding buildings) and most equipment and furnishings purchased for exclusive use within the enterprise zone. Office supplies and small nondepreciable items are not included.

Once the property has been put into service within the enterprise zone, you must wait a minimum of two years before selling it or removing it from the zone. You must elect to expense the property during the first year the property was placed in service. If the cost of the item exceeds the maximum expense amount, you may expense up to the cap, and then depreciate the remainder in subsequent years.

NET OPERATING LOSS CARRYOVER

Businesses located in the Enterprise Zone have the option of carrying over 100 percent of the business’s net operating losses over 15 years on their state taxes.

Net operating losses occur when your business deductions exceed your business income, resulting in a net loss for the company. As your business recovers in succeeding years, you can recover the amount of the loss by deducting it from your state taxes. There are just a couple of limitations:

• The NOL can be carried forward but not back; and
• If you elect the enterprise zone NOL deduction, you are prohibited from carrying over any other type of NOL from the same year.

DEDUCTION FOR LENDERS

The net interest deduction for lenders was created to encourage loans in areas that might otherwise be avoided. A deduction from income is allowed on the amount of “net interest” earned on loans made to a business located in the enterprise zone. “Net interest” means the full amount of the interest, less any direct expenses incurred in making the loan.

While the deduction is for the lender, not the business, the business benefits indirectly by receiving a loan that might otherwise have been turned down.

Eligible loans may be used for inventory, buildings, equipment, and working capital. The trade or business receiving the loan must be located solely within the enterprise zone, and the funds must be used exclusively for activities in the zone. The deduction is available to noncommercial lenders as well as commercial, however, the lender may not have equity or other ownership interest in the business.

PREFERENCE POINTS ON STATE CONTRACTS

The Enterprise Zone Act (EZA) provides a 5 percent bid preference on service and commodity contracts valued at more than $100,000 if the business work site is located in an enterprise zone. Bid preferences do not apply to construction or other contracts where the provisions of the State’s contract fix the work site.

The EZA allows state contracting officials to give California based companies the bid preference when 50% of the labor required to perform a commodities contracts or 90% of the labor for services contracts is performed at the approved EZA work site(s). To receive a contract award based on preferences, the company must certify under penalty of perjury that the required contract labor shall be accomplished at the approved work site.

Companies qualifying for the 5 percent work site preference may request an additional 1 to 4 percent workforce preference by certifying to hire a specified percent of their contract workforce labor hours from a targeted employment area, or from enterprise zone eligible employees.

For more information click here.

The Santa Clarita Enterprise Zone covers 97% of all commercial, business, and industrial zoned land within the City of Santa Clarita. July 2008 marked the 1 year anniversary for the Santa Clarita Enterprise Zone which received its official designation from the State of California back on July 1, 2007.

Are You in the Zone?

If your business is located in the City of Santa Clarita or you plan to move your business to Santa Clarita, you should check to see if you are within the Santa Clarita Enterprise Zone boundaries – making your business eligible for significant savings through tax credits and deductions.

Please review the Santa Clarita Enterprise Zone map or list of street ranges to determine if your business is located within the qualified area.

Want to Learn More about the Available Benefits?

The Enterprise Zone program offers special tax incentives to businesses located within the Zone. Click here for information on available benefits including hiring tax credits, sales and use tax credits, business expense deductions, net interest deductions, and net operating loss carryover deductions.

Want to Know if an Employee is Eligible for the Hiring Tax Credit?

Companies located in the Enterprise Zone can receive a tax credit for hiring individuals meeting certain qualifications.

For employee vouchering instructions please click here for the Complete Employer Voucher Application Packet which includes instructions and a sample Hiring Tax Credit Voucher.

Where Are the Santa Clarita Targeted Employment Areas (TEAs)?

To determine if an applicant resides in one of Santa Clarita’s TEAs, please click here