The Enterprise Zone program was initially developed by the California State Legislature to stimulate business and employment growth in specific areas that were under hard economic times. In 1993, the City of Oakland received an initial 15-year Enterprise Zone designation. The Zone was renewed in 2008 and provides many benefits to businesses of all sizes, making it an ideal place for just about any business.
The Oakland Enterprise Zone takes up more than 27 square miles, and encompasses more than 10,000 businesses in the area. The Zone is home to many affordable manufacturing and commercial sites, as well as high quality, Class A office buildings.
But what exactly does the Enterprise Zone do for businesses that makes it such a benefit? And why should you choose to be within its limits? Here are some of the perks the Enterprise Zone offers in Oakland, California:
All Businesses Can Participate
It doesn’t matter what sort of business you are, there are benefits for all kinds of companies within the Enterprise Zone. The benefits are meant to assist businesses, and that goes for all types of businesses, and all sizes.
Hiring Tax Credit
One of the most beneficial aspects of doing business in the Enterprise Zone is a hiring credit worth up to $37,440 per qualified employee. Employees can qualify for this tax credit through 1 of 13 ways, and an added bonus is that employees do not have to live in Oakland or the Oakland Enterprise Zone to qualify. Past employees, and employees who have been terminated may also qualify for the tax credit.
Sales and Use Tax Credit
Another credit companies can take advantage of is the Sales and Use tax credit that applies to equipment, technology, and manufacturing investments. This credit is equal to the amount of sales tax paid on the qualifying company purchases.
California itself also offers businesses many perks, though some of them overlap with perks offered by the Oakland Enterprise Zone. Some of the perks offered by California include:
California Manufacturing Exemption
It allows certain manufacturing and biotech companies to exempt from sales and use tax purchases of manufacturing, research, and development equipment. There are certain criteria that must be met to qualify for this exemption.
California Competes Tax Credit
This is an income tax credit available to businesses that plan to relocate to California or already are in the state planning to expand a California operation. There is an extensive initial application process that look into the number of jobs the business will create and retain in California, the amount of investment in state by the business, the extent of poverty or unemployment in the area where the business is located or expanding into, the economic impact on California by the business, and the incentives available to the business in other states.
California New Employment Credit
This credit is available to qualified taxpayers and is a result of hiring qualified employees by a qualified employer.
Business Criteria Include:
- Location in a designated geographic area.
- A qualified industry, including, but not limited to: Manufacturing, Biomedical, Aerospace, and technology sectors.
- Having a net increase in number of jobs over a base year.
Employee Criteria Include:
- Performs at least 50% of services for the employer within the designated geographic area.
- Receives wages that are at least 150% of the state minimum wage, but less than 350%.
- Is hired on or after January 1, 2014.
- Is a full time worker (at least 35 hours per week).
- The employee must also meet one of the following criteria:
- Unemployed for the six months prior to date of hire.
- Veterans separated from the U.S. Armed Forces within the last 12 months.
- Recipients of the Earned INcome Tax Credit in the previous taxable year.
- Recipients of CALWORKS or other general assistance.
- Ex-offender convicted of a felony.
Overall, while California offers many benefits to businesses as a State, being with the Oakland Enterprise Zone, or one of the other Enterprise Zone’s in California can increase the number of benefits your company receives, along with the ease of qualifying for those benefits. Location is key to your business success, so choose wisely.
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