California Enterprise Zones

Information Courtesy of California Association of Enterprise Zones

California’s Enterprise Zone Program targets economically distressed areas throughout the state. Special state and local incentives encourage business investment and promote the creation of new jobs. The purpose of the Zone program is to provide tax incentives to businesses and allow private sector market forces to revive the local economy.

Enterprise Zone companies are eligible for substantial tax credits and benefits including:

• Hiring Tax Credits - Firms can earn $31,574 or more in State tax credits for each qualified employee hired
• Sales and Use Tax Credit - Zone companies may receive a sales tax and use tax credit for manufacturing or processing machinery, data processing and communications equipment and motion picture manufacturing equipment central to production and post production, to be used in the Zone. Individuals can claim a credit on the first $1,000,000 of qualifying purchases, while corporations can claim credit on the first $20,000,000 per year.
• Business Expense Deduction - Up front expensing of certain depreciable property
• Net Operating Loss Carryover - Up to 100% of the NOL may be carried forward for 15 years
• Net Interest Deduction - Lenders to Zone business may receive a new interest deduction
• Unused tax credits can be applied to future tax years
• Enterprise Zone companies can earn preference points on state contract

For more information about California’s Enterprise Zones, visit:

• California Association of Enterprise Zones at www.caez.org
• State of California, Housing and Community Development Financial Assistance Division at www.hcd.ca.gov/fa/cdbg/ez