Posts Tagged ‘Enterprise Zone Credits’

San Diego Enterprise Zone Expansion

As of September 4, 2012 the San Diego Enterprise Zone has been expanded to cover parts of the following communities: Rancho Bernardo, Mira Mesa, Kearny Mesa, Mission Gorge, Linda Vista, Bay Park, North Bay and Chula Vista.  See our previous post on the details of the credit.

According to the Mayor’s office, approximately 920 local companies have used the program to hire over 31,600 local workers. They also state that four large companies moved to San Diego because of the city’s commitment to seek this expansion of the Enterprise Zone.  ATK, Kyocera, Soitec and Shire indicated the promise of the Enterprise Zone was an important factor in their decision to expand to San Diego creating 866 jobs.

If you think you are in the “zone”, contact your tax preparer to see how you can take advantage of these credits.

Taking advantage of the Enterprise Zone Program

We were introduced to Brendan Foote and his company, Cal Tax Group, Inc., through a client of ours who was able to claim quite a bit in California tax credits related to the Enterprise Zone.  This article gives the quick facts of what you need to know about the Enterprise Zone credits. 

By the way, if you are interested in contributing to our blog, email Mary for more information. mmm@politoeppich.com

Brendan Foote, Partner

Cal Tax Group, Inc.,  San Diego, CA  92101   

619-202-4198; bfoote@caltaxgroup.com

 “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” We are clearly in the midst of difficult economic times that limit our ability to grow a business, but for companies in certain areas of San Diego County, there is one program that may be the perfect catalyst to take steps in the expansion direction. The San Diego Regional Enterprise Zone is a California funded tax incentive program that encourages businesses and business owners in certain parts of the state to create job opportunities and buy equipment. Through lucrative tax incentives, companies creating eligible jobs and purchasing qualified equipment can look forward to tens of thousands of dollars in state income tax credits. 

San Diego’s Enterprise Zone is concentrated south of Interstate 8, stretching from Downtown and east, including the majority of the South Bay and border regions as well. Companies located “in the zone” can obtain state income tax credits for each new employee they hire who meets one of thirteen qualifying criteria. Among these criteria include; former military, those hired off unemployment, residents of the local communities and those laid off from their previous place of employment. For each employee that meets one of these qualifying criteria, companies can receive up to $38,000 in credits over a five year period. 

For qualified equipment purchased, namely manufacturing equipment or computer based equipment; companies can convert California sales tax paid on such expenditures into an income tax credit. 

All California income tax credits obtained can be carried forward indefinitely and used against any tax liabilities resulting from Enterprise Zone income. For pass-through entities such as S-Corporations and LLCs, the income tax credits flow directly to the shareholders of the company and can be applied against personal income taxes resulting from W2, K-1 and rental or other passive income sources generated within the Enterprise Zone. 

One of the best parts about this program is companies who have not yet participated can identify and claim credits retro-actively on amended tax returns for up to four years against taxes they have paid to the State. Refunds will be issued and any remaining credits can be carried forward for future use.

 In short, if you aren’t taking advantage of the Enterprise Zone Program, you are passing up “free” money.

California Enterprise Zone Credits

Are you in the zone?  California offers tax credits for businesses in certain enterprise zones.  These incentives are designed to motivate businesses to operate and hire in struggling areas of the state.  There are some enterprise zones in the cities of San Diego, Chula Vista and National City.  If you hire new employees or purchase assets, you may be eligible.  The city offers a FREE service to help you identify eligible purchases and hires and help you fill out the required forms to apply for these credits. You may even be eligible for other programs.  It’s worth the call if you are, in fact, IN THE ZONE.

The cities have websites you can visit for more information, including contact information, fact sheets and more details about the programs available.  Go to www.sandiego.gov/sdrez/ for more information.

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