What are Enterprise Zones?
In 1984, the California Trade and Commerce Agency established Enterprise Zones (EZ) to foster economic development in depressed areas throughout California. Subsequently, the Merced Regional Enterprise Zone was designated. The Merced Regional Enterprise Zone's purpose is to revitalize depressed areas by offering tax incentives and reduce barriers to employment. Employers operating in the Enterprise Zone Merced Regional can apply for Enterprise Zone credits to receive tax savings.
Most companies are unaware that the Merced Regional Enterprise Zone exists; however, it is KBKG's primary goal to help businesses maximize tax savings for companies located in the Enterprise Zone Merced Regional. Companies who are qualified to utilize the Enterprise Zone tax credit must fall within the designated Enterprise Zone boundaries and have employees. Companies that meet these criteria and pay taxes to the state of California at the corporate or shareholder level are excellent candidates for the Enterprise Zone tax credit. Currently, there are 42 Enterprise Zones within California including Merced Regional.
See if you qualify for the Enterprise Zone Tax Credit
Other benefits of the Merced Regional Enterprise Zone includes:
Hiring Tax Credit: Employers who hire workers in the Enterprise Zone Merced Regional may qualify for a tax benefit. Each eligible employee may be worth up to $37,440 in Enterprise Zone tax credits. This tax credit is intended to encourage businesses to hire employees facing barriers to employment.
Sales and Use Tax Credit: Businesses within the Merced Regional Enterprise Zone can receive a tax credit on qualified equipment. A company that lies within the Enterprise Zone Merced Regional can utilize the sales and use-tax credit. Business purchasing equipment that is technology-based or used for manufacturing can recover the sales paid on that equipment.
Business Expense Deduction: Accelerated depreciation is available for tangible personal property purchased by a business in the Merced Regional Enterprise Zone. Many businesses may reduce their California tax liability by using this deduction.
Net Interest Deduction: Lenders may qualify to earn tax-free interest on loans if lending to the Enterprise Zone Merced Regional. Banks or private lenders will not pay California tax on loans to businesses within the Merced Regional Enterprise Zone. This encourages banks to lend within the Merced Regional Enterprise Zone.
As a result, the Merced Regional Enterprise Zone program has increased employment in Merced Regional and several other Enterprise Zones within California. The Enterprise Zone Merced Regional will continue to reduce unemployment by attracting economic activity to the Merced Regional Enterprise Zone. KBKG has helped taxpayers identify, document and claim tax credits for being located in the Merced Regional Enterprise Zone and reduced their overall California tax liability.