The State of California established Enterprise Zones to provide state tax incentives to businesses located in specifically designated areas to revive the local economy. These tax credits can result in tax refunds based on income tax the business and/or its shareholders have already paid to the Franchise Tax Board.
- Hiring Tax Credit. This tax credit can be maximized at $37,440 for each qualified employee.
- Sales & Use Tax Credit. Based on qualified equipment, including all telecommunication & data processing purchases, and manufacturing, processing & fabricating equipment.
- Net Interest Deduction. Lenders to Zone businesses may receive a net interest deduction on interest payments.
- Business Expense Deduction. Up-front expensing of certain depreciable property.
All businesses located in an Enterprise Zone qualify for tax credit benefits. Franchise Tax Board statutes allow us to review & amend tax returns for the last four years.
For businesses with locations inside & outside an Enterprise Zone, the amount of credit is limited by the amount of tax or income attributable to the Enterprise Zone locations.
Credit Carry Forwards
All unused Enterprise Zone Credits can be carried forward to offset future Enterprise Zone tax liabilities. This carry forward is not limited; it continues until all credits are utilized on future returns.
Please contact Joel Peterson, Sr. Manager at 562.249.6012 or email to Joel.Peterson@dsfgroup.com with any questions.