According to an article published online today by the Los Angeles Times, an un-named state agency has approved a California Enterprise Zone expansion in the Los Angeles San Fernando Valley area. Of course, the agency must be the California Department of Housing and Community Development (or HCD), which oversees the state’s enterprise zone program. According to reporter Phil Willon at Los Angeles City Hall,
The expansion area includes portions of Chatsworth, Canoga Park, the Van Nuys Airport area, Woodland Hills and the northeast Valley. Some of the major businesses and retail centers that will benefit are Micro Solutions Enterprises in Van Nuys, the Woodland Hills Auto Gallery, 3M and Nestle Foods in Canoga Park, the Northridge Plaza, the Westfield Topanga Plaza in Warner Center and firms around the airport.
California’s Enterprise Zone (EZ) program offers significant tax benefits to businesses located within their boundaries. The EZ Hiring Credit provides an income tax credit based on wages paid to qualifying (and properly certified) employees working within the zone. The amount of tax benefit is nothing to sneeze at. Try this on for size: 50% of wages paid during first year of employment, capped at 150 % of minimum wage. In practice, this translates easily to $12,000 in tax credit flowing from a single qualifying full-time employee.
Another similar benefit is the EZ Sales or Use Tax Credit — actually an income tax credit based on the amount of sales or use tax paid in the purchase of qualifying equipment placed into service within the zone.
Other benefits include the (1) EZ Business Expense Deduction, (2) EZ Net Interest Deduction (for lenders), and (3) EZ Net Operating Loss Carryover provision.