No new enterprise zone regulations? That is correct.
Actually, this is good news, all things remaining equal. Now that California’s Enterprise Zone program is set to expire, we have been asking ourselves, “What about the new vouchering regulations?” The last time we heard, they were in their final phases of completion by the Department of Housing and Community Development (HCD).
According to Eric Johnson, spokesperson for HCD, the enterprise zone regulations are now being set aside in anticipation of new tax-incentive programs spelled out by Assembly Bill 93 last week. (more…)
It has happened! The enterprise-zone elimination bill has passed the California Assembly and now goes to Governor Jerry Brown, who will most assuredly sign it into law. As I explained in my most recent post, this bill ends the enterprise zone program as of December 31, 2013.
If you are an enterprise zone business owner, however, you need to understand that this legislation allows you to continue generating tax credit on the wages paid to qualifying employees hired before January 1, 2014. These employees may continue to generate tax credit for up to 5 years if they remain employed in the (now former) enterprise zone. Also, you will have up to 10 year to utilize all the credit that already has been (or yet will be) generated under this process.
Now is the time for all enterprise zone businesses to take their last deep breath of enterprise-zone benefits. Maximize your 2013 employee qualifications. Generate as much tax-credit carryover as possible. And prepare to pay much higher taxes when all of your carryover tax credits are finally used up – possibly as long as 5 to 10 years from now.
Sadly, this is now also the time for all the tax credit consultants out there, who have specialized in CA enterprise zone services, to hone their resumes and begin putting their contingency plans into operation.
My clients can be assured that we’re working to maximize their benefits into the foreseeable future. We will be here to support them in the way they have grown accustomed to expect.
Read more in the Merded-Sun Star (more…)
The California Senate voted last night to approve Democrat Governor Jerry Brown’s legislation that will eliminate the state’s 29-year old enterprise zone program. While only 27 votes were required, Assembly Bill 93 passed 30 to 9 in favor, with 3 of 11 Republicans joining with Democrats. (There are 40 seats in the California Senate, one of which is currently vacant.) (more…)
California Governor Jerry Brown’s proposals to eliminate and replace the state’s enterprise zone program did not make it into the budget bill, which is scheduled for a vote on Friday, June 14th. Legislative leaders made it clear earlier this week that they did not have the number of votes required to pass the enterprise zone legislation. (more…)
On May 22, 2013, the California State Assembly’s Budget Subcommittee #4 held a hearing that explored Governor Jerry Brown’s latest economic tax incentive proposals as they relate to the State’s current enterprise zone program. In my previous post on this subject, based solely on the language published in the Governor’s May 2013 budget revision, I concluded that significant “revisions” were the target. The recent hearing makes it abundantly clear, however, that the words “elimination” and “replacement” better describe Governor Brown’s proposal. (more…)
California Governor Jerry Brown released his May budget revise today, revealing additional intentions for the State’s enterprise-zone program.
From page 68:
“The [enterprise zone] hiring credit will be refocused to specific areas with high unemployment and poverty rates. This credit will be available for the hiring of long-term unemployed workers, unemployed veterans, and people receiving public assistance. The Enterprise Zone sales tax program will be expanded to a statewide, upfront sales tax exemption for manufacturing or biotech research and development equipment purchases.”
WHEREAS, any official position of the City of Los Angeles with respect to legislation, rules, regulations, or policies proposed to or pending before a local, state or federal governmental body or agency must have first been adopted in the form of a Resolution by the City Council with the concurrence of the Mayor; and
WHEREAS, since 1984 the California Enterprise Zone program has provided businesses hiring credits, sales/use credits, and other tax incentives to stimulate business growth, attraction, and employment within economically challenged areas of the State; and
WHEREAS, the City of Los Angeles includes two enterprise zones that cover Sylmar, Warner Center, Canoga Park, Chatsworth, Northridge, Van Nuys, LAX, Hollywood, Mid-City, Koreatown, and Downtown; and
WHEREAS, countless numbers of businesses in these parts of Los Angeles have received hiring credits, sales and use tax credits, expense and interest deductions, DWP rate discounts, and other benefits that have resulted in significant business cost relief, promoting job growth and economic improvement in some of the City’s hardest hit neighborhoods; and
WHEREAS, Enterprise Zone hiring credits are designed to encourage employers to hire people who live in disadvantaged areas, are currently on unemployment, receiving government assistance, or are veterans entering the workforce; and
WHEREAS, during his State of the State address, Governor Jerry Brown proposed scaling back the Enterprise Zone Program by limiting the time available to apply for tax credits, remapping the zones, and reducing the amount of tax credits; and
WHEREAS, reducing or eliminating Enterprise Zone benefits will be devastating to thousands of Los Angeles businesses, increasing their cost of doing business, impacting their future growth plans, and potentially resulting injob losses; and
WHEREAS, in these tough economic times, the State should be looking for ways to promote the growth of business rather than saddling businesses with new costs;
NOW, THEREFORE, BE IT RESOLVED, with the concurrence ofthe Mayor, that by the adoption of this Resolution, the City of Los Angeles hereby includes in its 2013-2014 State Legislative Program OPPOSITION to any reductions, changes, or eliminations of the Enterprise Zone program.
PRESENTED BY: Mitchell Englander, Councilmember, Twelfth District
Download PDF. (more…)