Businesses in the zone – from large manufacturing companies to small neighborhood restaurants – can significantly reduce their state income taxes by taking advantage of special California Enterprise Zone tax benefits.

Located within the Fresno Enterprise Zone borders are affordable manufacturing and commercial sites, as well as unique retail locations.  The zone is within immediate access of two freeways, two state highways, the Fresno Yosemite International Airport and the Downtown Chandler Airport.  It is also in close proximity to a wide range of educational facilities, housing and other amenities.  These assets add up to an increasingly powerful ability to assist current businesses and attract new companies, jobs and investments.

A business located within the Enterprise Zone can receive tax credits each time it hires an eligible employee or purchases qualified new machinery, equipment or pollution control devices.  Incentives are also available to many employees who work in the zone and lenders who make loans to qualified businesses.  Most businesses in the Enterprise Zone are automatically eligible for benefits.  There is no certification process.

If you are in the Fresno Enterprise Zone, or you want to know if you are, contact us directly by clicking here.  C & I Tax Consultants are here to help you receive the full tax credit that you are entitled to.

Industries locating or expanding in Kings County can access numerous pro-business incentives such as:

• Hiring Tax Credits – Firms can earn $31,574 or more in State tax credits for each qualified employee hired.
• Sales and Use Tax Credit – Zone companies may receive a sales tax and use tax credit for manufacturing or processing machinery, data processing and communications equipment and motion picture manufacturing equipment central to production and post production, to be used in the Zone. Individuals can claim a credit on the first $1,000,000 of qualifying purchases, while corporations can claim credit on the first $20,000,000 per year.
• Business Expense Deduction – Up front expensing of certain depreciable property.
• Net Operating Loss Carryover – Up to 100% of the NOL may be carried forward for 15 years.
• Net Interest Deduction – Lenders to Zone business may receive a new interest deduction.
• Unused tax credits – Can be applied to future tax years.
• Preference Points – Enterprise Zone companies can earn preference points on state contracts.

Answer: For businesses within Enterprise Zones, an amended tax return can be filed. Amended returns can be filed within four years from the original due date of the tax return, the date the tax return was filed, or within one year from the date the tax was paid, whichever is later. Essentially, that means you can look at the previous four years and compute the tax credits that your firm may qualify for. For businesses in federal zones (e.g. Empowerment Zones, Renewal Communities and Enterprise Communities), you can go back three years and calculate credits owed to you. Whether you are a business in an Enterprise or Federal zone, credits may be computed for the current year and subsequent years, as well. Once the Enterprise Zone credits are identified, they can be claimed until exhausted. They do not expire. The Federal Credits can be carried back one year and forward twenty until exhausted.

This is part 2 of 10 in a series of frequently asked questions and answers from C & I Tax Consultants. For more information, please contact us today.

Who is in the Barstow Enterprise Zone?
All types of existing businesses:

• Railroads
• Truck Stops
• Dentists and Doctors
• Auto Mechanics
• Car Dealerships
• Beauty Salons
• Coffee Shops
• Accountants
• Printers, Hotels, and More

Any businesses that is located within the boundaries of the Enterprise Zone is eligible for the numerous benefits of the Enterprise Zone location.

How do I get into the Barstow Enterprise Zone?
By relocating  in the Enterprise Zone!  Buy, lease or build within the boundaries of the Enterprise Zone and your business will receive all the benefits of being in the zone.

What are the benefits of being in the Barstow Enterprise Zone?
For starters, how about a Hiring Tax Credit of more than $30,000 per qualified employee during a 5-year period?

Your business may be eligible for:

• Sales and Use Tax Credits
• Business Expense Deduction for Business Property
• Net Operating Loss Carryover
• Net Interest Deduction for Lenders
• Employee Wage Credit

Both existing businesses, as well as new businesses that move into the Enterprise Zone, may receive the above benefits.

Other Barstow Enterprise Zone Incentives

• Favorable loan programs
• Industrial sites as low interest or interest-free financing
• Building ready to occupy
• Pads ready for building
• Fast-track planning and building permits
• 34-acre business park with utilities already in
• Barstow is a pro-business city
• One-Stop career center for workers and employers
• State sales and use tax credits on qualified purchases

This is part 1 of 10 in a series of frequently asked questions and answers from C & I Tax Consultants. For more information, please contact us today.

Jessica Selva, from the SFV Business Journal, had this to say about the news, “The bill, introduced by Senate President Pro Tem Darrell Steinberg on Feb. 8, would narrow the eligibility criteria of hard-to-hire employees, such as ex-offenders, that a business could claim for the hiring tax. It would also eliminate retro-active vouchering for the credit and would remove the credit’s focus on targeted employment areas. The bill is now being considered by the State Assembly’s Committee on Jobs, Economic Development, and the Economy. If passed by the Assembly, the bill would take effect Jan. 1, 2011.”

We are also planning a Redevelopment Plan Amendment that will cover most of our planned growth areas. The expanded Project Area should capture significant new redevelopment property tax increment. Also, we have zoned enough industrial property to allow for at least 6,000 new jobs. For example, we are marketing a 72-acre industrial park and have a 27-acre city-owned industrial park that should receive $3.2 in Grant funding for the public infrastructure improvements. Finally, with the recent Enterprise Zone designation by the State of California, we should be able attract some quality light manufacturing, alternative energy, renewable fuels and other relative high-wage businesses.

Our General Plan Guiding Principles include:

• Conserve agricultural and natural resources
• Create a vibrant, healthy and active downtown
• Incorporate green and sustainable principles through the General Plan
• Encourage growth in existing developed areas with limited new growth in undeveloped areas of the Planning Area
• Promote attractive residential and aesthetically appealing commercial development
• Create a positive business environment for new and existing businesses to locate and expand
• Provide mobility, housing and job options for all residents of Taft

Diversify the local economy while remaining a leader in energy production and maintaining a strong petroleum-based industry

Some equipment within certain warehouse/distribution centers may qualify for the sales tax credit. The specific details of the client’s operation will need to be reviewed with the Franchise Tax Board and they will need to make a determination on eligibility.

Other Benefits
15-year carryover of up to 100 percent of the net operating losses;
Expensing up to $15,000 of certain depreciable property;
Lender interest income deductions for loans made to zone businesses;
Preference points on state contracts.

Enterprise Zone Tax Credits
As a state designated enterprise zone, new and existing businesses may qualify for State tax credits, including:

Sales Tax Credit – California income or franchise tax may be reduced by the amount of sales and use tax paid on certain machinery purchased for use in the enterprise zone. The equipment must be used to manufacture, process combine or fabricate a product. The sales and use tax credit may be carried over to offset tax imposed in subsequent years.

Hiring Credit – A business may reduce taxes paid by up to 50% of the amount of wages paid to one or more qualified employees. These state credits are in addition to any federal tax credits. A qualified employee is a new hire that are participants in a qualified job development or training program. Business may earn credits of up to $24,000 per employee over a five year period.

Business Expense Deduction – Part of the cost of certain property purchased for exclusive use in an enterprise zone may be deducted as a business expense in the first year it is placed into service. The type of property qualifying for the credit is tangible personal property (not real estate) which is used for business purposes and is eligible for depreciation.

Net Operating Loss Carryover – Net operating losses (NOL) of individuals and corporations doing business in the enterprise zone may be carried over to future years to reduce the amount of taxable income generated in the enterprise zone and is determined by computing the business loss which results from business activity in the enterprise zone.

Manufacturers’ Investment Credit – The Manufacturer’s Investment Credit provides manufacturers a State Income Tax Credit of 6% of the purchase price of qualified property. The Credit may be carried over for up to 7 years from the date of purchase.

San Diego’s economy is largely composed of agriculture, biotechnology/biosciences, computer sciences, electronics manufacturing, defense-related manufacturing, financial and business services, ship-repair and construction, software development, telecommunications, and tourism. The presence of the University of California, San Diego (UCSD) with the affiliated UCSD Medical Center promotes research in biotechnology.

If you have a business in the San Diego area, contact us for a free consultation on how you can take advantage of the California State Enterprise Zones.