In September 2006, the cities of South Gate and Lynwood, applied to the State of California for an Enterprise Zone designation. This is a competitive process and on November 3, 2006, the cities of South Gate and Lynwood were awarded conditional designation. The City of South Gate was also authorized to receive and process applications from eligible businesses located within the Enterprise Zone area.

WHO IS ELIGIBLE?
Any individual or company operating a trade or business within the Enterprise Zone is eligible to participate in the program.

WHAT ARE THE BENEFITS?
The Enterprise Zone program may provide substantial tax savings for your business. There are five incentives available to taxpayers that invest in or operate a trade or business located within the Enterprise Zone. For additional information about each incentive, refer to the State of California Franchise Tax Board Publication: FTB 3805Z Enterprise Zone Business Booklet 2006 or call the Voucher Coordinator in either the City of South Gate or City of Lynwood.

The incentives are:

1) Hiring Tax Credit

2) Sales and Use Tax Credit

3) Business Expense Deduction

4) Net Operating Loss Carryover

5) Net Interest Deduction for Lenders and Bankers

WHAT ARE STATE HIRING CREDITS?

• A business within the Enterprise Zone boundary may reduce its State income tax by a percentage of the amount of wages paid to one or more qualified employee(s).
• A business/firm can claim up to 50% of an employee’s wages in the first year of employment. The credit percentage decreases by 10% annually, phasing out after five years.
• Approximately $31, 570 or more in State tax credits is potentially available per qualifying employee hired over a five-year period.

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This entry was posted on Friday, December 26th, 2008 at 4:09 am and is filed under Enterprise Zones, Featured Zone. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.