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| The Enterprise Zone (EZ) program targets economically distressed areas in California with special state and local incentives which encourage business investment and promote the creation of new jobs. The Enterprise Zone program provides tax incentives to businesses and allows private sector market forces to revive the local economy. There are currently 42 EZs in California.
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Businesses located within a California Enterprise Zone are eligible for substantial State tax credits and benefits including:
- HIRING TAX CREDIT - State tax credit of $36,000 or more over five years for each qualified employee hired.
- SALES OR USE TAX CREDIT - State tax credit for sales and use taxes paid, up to $20 million per year, on qualified machinery and machinery parts purchases.
- INCREASED EXPENSE DEDUCTION - Accelerated expense deductions for certain depreciable property.
- NET OPERATING LOSS CARRYFORWARD - Up to 100 percent net operating loss deduction and a 15-year carryforward.
- NET INTEREST DEDUCTION FOR LENDERS - Net Interest Deductions for lenders on loans made to firms within an Enterprise Zone.
- STATE PREFERENCE POINTS - Enterprise Zone companies can earn preference points on state contracts.
Contact your local Enterprise Zone Manager for more information. Additional local incentives may also be offered. Local incentives offered will vary in each Enterprise Zone, but may include:
- Streamlined development process
- One-stop permitting
- Same-day inspections
- Employee training programs
- Employee recruitment assistance
- Deferred, reduced or waived fees
- Below-market site and/or leases
- Development liaison
- Business consultant services grants
- Micro enterprise programs
- Local financing
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| Commonly Asked Questions about Enterprise Zones | Top of Page |
| Please click here for a Q & A of commonly asked questions regarding Enterprise Zones. The Q & A will clarify how Enterprise Zones and Targeted Employment Areas are designated.
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| This information is intended for general purposes only and does not constitute advice. The intent is to provide content that is accurate and timely, however there is no expressed or implied assurance or guaranty of the accuracy, timeliness or applicability of any of the contents. For more information contact the State of California Franchise Tax Board, the Zone Manager, or your tax professional.
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