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Dear Merced Regional Enterprise Zone business:

Thank you to all of you who contacted your legislators to support the Enterprise Zone Program last week by opposing AB 93.  Unfortunately, the Legislature still decided to vote to pass the Bill and eliminate the Enterprise Zone Program, effective at the end of this year (January 1, 2014). 

Here is what this means for your business with regards to the Hiring Credit:

  • If you have already hired an employee and obtained a voucher certificate, you may continue to accrue tax credits for that employee, even if they continue to work for you after the end of this year.  It appears that the tax credits will continue to carry forward for up to 10 years from the expiration of the Zone.
  • If you have hired an employee and have not yet obtained a voucher certificate, you should do so NOW.  While the Bill is clear that any employees hired prior to the end of the year would qualify, it is not clear whether we will still be able to process the voucher application after the end of this year.  Therefore, you should submit your application before the end of this year to ensure that you are able to obtain your entitled benefits.
  • If you are thinking of hiring new employees in the near future and would like to take advantage of the credit, IT IS NOT TOO LATE!  Any employees hired before the end of the year are still eligible, and you can continue to claim the credit for as long as they remain with you.  Please contact the Enterprise Zone or the OneStop Career Center at 209-724-2001 immediately if you are interested in hiring an employee before the end of the year, so we can help make sure that you complete and the hiring process and the necessary paperwork in time to claim the credit going forward.
  • If you’ve had past, current or future(next 10 years) state income tax liabilities and hadn’t yet taken advantage of the Enterprise Zone credits,  you still can do so, but your window of opportunity is shrinking fast. Please contact me for more information.

I’d like to thank all of you for your participation and support in the Merced Regional Enterprise Zone Program and look forward to making sure that everybody that can take advantage of this program over the next six months is able to do so.  Please don’t hesitate to contact me if you have any questions.

 

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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.

Tax Benefits

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.