Merced Regional Enterprise Zone
The Enterprise Zone Program targets economically distressed areas throughout California. Special state and local incentives encourage business investment and promote the creation of new jobs. The purpose of the program is to stimulate development by providing tax incentives to businesses and allow private sector market forces to revive the local economy.
Enterprise Zone companies are eligible for substantial tax credits and benefits including:
- Hiring Credits - Firms can earn $37,440 or more in state tax credits for each qualified employee hired;
- Up to 100% Net Operating Loss (NOL) carry-forward. NOL may be carried forward 15 years (suspended for tax years 2002 and 2003);
- Corporations can earn sales tax credits on purchases of $20 million per year of qualified machinery and machinery parts;
- Up-front expensing of certain depreciable property. Lenders to Zone businesses may receive a net interest deduction;
- Unused tax credits can be applied to future tax years, stretching out the benefit of the initial investment;
- Enterprise Zone companies can earn preference points on state contracts.
Work Opportunity Tax Credit (WOTC)
The Work Opportunity Tax Credit (WOTC) promotes the hiring of individuals who qualify as members of target groups, by providing a federal tax credit incentive of up to $9,000 for employers who hire them.