Santa Clarita Valley Enterprise Zone Tax Credits
The Santa Clarita Valley Enterprise Zone program was designated in 2007. Qualified businesses in the Santa Clarita Valley Enterprise Zone can take advantage of all available Enterprise Zone credits. Businesses are not limited to just one benefit or credit of the program.
Hiring Tax Credit
Businesses located in the Santa Clarita Valley Enterprise Zone may reduce their State Income Tax by a percentage of the wages paid to one or more qualified employees. A business has the potential of earning $37,440 in tax credits per qualifying employee over a five-year period.
If a business hires a qualified full-time employee, working 2080 hours at $12.00 per hour*, the hiring tax credit would generate a tax savings of up to $37,440 per employee, over a five-year period.
($12.00 is the credit cap value (150% X current minimum wage, $8.00). A business can pay more or less than the cap, but only receive the credit for the actual wages paid to a maximum of $12.00 per hour.)
There are many ways for employees to qualify including: individuals who live in targeted employment areas (TEAs) or individuals who have been recently laid-off or receiving public assistance to name just a few. A complete list of ways individuals may qualify can be found in the SCVEZ Categories of Eligibility Acceptable Documentation list. The tax credit is retroactive to employees hired after the Santa Clarita Valley Enterprise Zone designation date of January 1, 2011, and excess credits can be carried forward to offset future tax obligations.
See if you qualify for the Enterprise Zone Tax Credit
Other Enterprise Zone Benefits
Sales or Use Tax Credit: Receive credit for the full amount of the sales tax you paid on equipment needed for your business. For example, if you paid $1 million dollars for equipment during the current tax year and paid 8% sales tax on that equipment, your tax credit would be equivalent to $80,000 ($1 million x 8%).
Business Expense Deduction: Write off 40% of the cost of qualified equipment in its first year of service. This can be written off as a business expense instead of a capital expense.
Net Operating Loss Carry-Over: 100% of your business’s net operating loss may be carried over 15 years, instead of 50 percent for 5 years as is California law for other businesses.
Net Interest Deduction: This applies to lenders who are providing a loan to you. The lender may write off the net interest on your loan minus their expenses in making you the loan.