Enterprise zone, what’s in it for you?
SISKIYOU ENTERPRISE ZONE
The Siskiyou Enterprise Zone is one of only 42 in the state of California. California Enterprise Zones were created to assist businesses located in the zones to lower their operating costs by providing them with tax credits and deductions. The incentives are outlined below:
EMPLOYER HIRING CREDITS
Over a 5-year period per each qualified employee can be claimed by an Enterprise Zone business resulting in approximately $35,000 in tax credits. An employee can qualify under any one of 13 different categories including TEA.
For more information visit the Department of Labor website www.dol.gov.
TARGETED EMPLOYMENT AREA
The county boundaries are designated as the boundaries of the TEA. Therefore any employee residing in Siskiyou County can qualify to be vouchered based on their address.
SALES & USE TAX CREDITS
An Enterprise Zone business can receive a tax credit of 100% of the sales/use tax paid for equipment purchases for use in the zone. Machinery, machinery parts, telecommunications equipment and office equipment such as copiers, printers, fax machines and telephone systems also qualify.
For more information visit the Franchise Tax Board website www.ftb.ca.gov and refer to Publication 1047.
BUSINESS EXPENSE DEDUCTION
An accelerated depreciation is available for tangible personal property the first year it is placed in service in an Enterprise Zone. Office supplies and inventory do not qualify. Limits: $20,000.
For more information visit the Franchise Tax Board website www.ftb.ca.gov and refer to Publication 1047.
NET INTEREST DEDUCTION
Lenders can earn tax-free interest on loans made to Enterprise Zone businesses.
For more information visit the Franchise Tax Board website www.ftb.ca.gov and refer to Publication 1047.
NET OPERATING LOSS CARRYOVER
100% of Net Operating Losses may be carried forward for 15 years to reduce the amount of taxable income for those years. For more information visit the Franchise Tax Board website and refer to Publication 1047.
PREFERENCE POINTS ON STATE CONTRACTS
The purpose of preference points on state contracts is to encourage businesses within the zone to participate in state contracts thereby encouraging added economic development and employment opportunities to the zone region.
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 as designated by the State Housing and Community Development Department.
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 on preference points on state contracts visit the Department of General Services website www.dgs.ca.gov.
To learn more about how the SISKIYOU ENTERPRISE ZONE can help your business visit the website at www.siskiyouenterprisezone.org or call 530.842.1638.
