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Economic Development Areas (EDA)
California currently has four types of Economic Development Areas (EDAs). Each of these areas has related tax incentive benefits. The purpose of these benefits is to stimulate business investment and job creation for qualified disadvantage individuals in state designated economically distressed areas.
These areas are:
- Enterprise Zones (EZs)
- Local Agency Military Base Recovery Areas (LAMBRAs)
- Manufacturing Enhancement Areas (MEAs)
- Targeted Tax Areas (TTAs)
Designated Enterprise Zones provide tax incentives to businesses and allow private-sector market forces to revive the local economy. A Local Agency Military Base Recovery Area or LAMBRA designations are similar to Enterprise Zones but focus on closed military facilities. The agency has also designated a Targeted Tax Area in Tulare County and two Manufacturing Enhancement Areas in Imperial County which are similar to the Enterprise Zone program.
• ENTERPRISE ZONES
What’s New for Enterprise Zone Applicants
9/18/08 |
Update on the 2008/2009 Designation Round — The Department is currently drafting the Application Guidebook for the next designation round. For this round, there will be four slots available. At this time, the Department expects to release the guidebook by September 30 with a due date of late January or early February. If you need more information on a release date, please call Lesley James at (916) 322-1112. |
1/31/08 |
Gov. Schwarzenegger Announces Eight New Enterprise Zones to Boost California's Economy |
What’s New for Current Zone Designees?
A "Voucher Appeals" link has been added to the RESOURCES & LINKS section! |
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8/22/08 |
Memorandum 8-07: LAMBRA Designation Periods (Adobe PDF) |
7/21/08 |
Memorandum 8-03: Monthly Report of All G-TEDAs (Adobe PDF) |
7/21/08 |
G-TEDA Monthly Report (Microsoft Word) |
6/6/08 |
Summary of Voucher Activity for Enterprise Zones (Microsoft Excel) |
5/15/08 |
Memorandum 8-02: Guidance for the Use of Electronic Signatures (Adobe PDF) |
5/12/08 |
Memorandum 8-01: Use of W-4 Form for TEA Eligibility (Adobe PDF) |
12/12/07 |
Memorandum 7-06: Voucher Numbers - Enterprise Zone Allocations (Adobe PDF) |
Program Purpose - Capitalizing on a Community's Resources
The Enterprise Zone Program targets economically distressed areas throughout California. Special state and local incentives encourage business investment and promote the creation of new jobs. The purpose of the program is to stimulate development by providing tax incentives to businesses and allow private sector market forces to revive the local economy.
Tax Benefits
Enterprise Zone companies are eligible for substantial tax credits and benefits including:
- Hiring Credits - Firms can earn $31,544 or more in state tax credits for each qualified employee hired;
- Up to 100% Net Operating Loss (NOL) carry-forward. NOL may be carried forward 15 years (suspended for tax years 2002 and 2003);
- Corporations can earn sales tax credits on purchases of $20 million per year of qualified machinery and machinery parts;
- Up-front expensing of certain depreciable property. Lenders to Zone businesses may receive a net interest deduction;
- Unused tax credits can be applied to future tax years, stretching out the benefit of the initial investment;
- Enterprise Zone companies can earn preference points on state contracts.
Business Eligibility
Businesses located at qualified addresses in an Enterprise Zone are eligible for program benefits. There are 42 Enterprise Zones located throughout California. (locations and contacts below). The State designates Enterprise Zones for a 15-year period.
Hiring Credit Eligibility - Targeted Employment Area Qualifier
The Targeted Employment Area (TEA) is one of several qualifying factors for obtaining state hiring tax credits. The TEA allows residents of certain designated low-income areas to qualify Enterprise Zone employers for substantial hiring credits through a "vouchering" system. The street ranges for TEAs within Enterprise Zones are identified in Maps and Street Ranges.
Maps and Street Ranges
These enterprise zone street ranges are provided as a general guide and do not have the power of law. Final determination of eligibility rests with the Department of Housing and Community Development. Each community's street ranges are updated as needed. Each zone is permitted to expand throughout its life, thereby adding to their street ranges. Occasionally, errors do occur and are corrected when discovered. The maps and street ranges can be accessed under "Maps and Street Ranges."
Contacts
State Enterprise Zone Administration
For technical assistance or questions regarding
Enterprise Zones (applications, boundaries, expansions) or
Hiring Credits (voucher application or regulations)
Please write to etips@hcd.ca.gov for quickest response.
Phone & FAX:
Frank Luera, Chief
State Enterprise and Economic Development Section
Phone (916) 322-1554
FAX (916) 327-6660
Mailing Address:
Department of Housing & Community Development
Division of Financial Assistance
ENTERPRISE ZONE PROGRAMS
P.O. Box 952054, MS 390-1
Sacramento, CA 94252-2054
Street Address:
1800 3rd Street, Suite 390
Sacramento, CA 95811
Tax Return Assistance
Please call the Franchise Tax Board HOTLINE @ (916) 845-3464 for any question regarding tax return preparation or tax calculations
Local Zone Administration
Please contact local zone administrators first about questions regarding business eligibility, hiring credits, vouchering and other local questions.
Resources & Links
Directory of 2008 Zone Contacts (Adobe PDF)
Contacts for Enterprise Zones, Local Military Base Reuse Agencies, Manufacturing Enhancement Areas and Targeted Tax Areas are accessible through this link:
California Association of Enterprise Zones
California State Map of Enterprise Zones and other EDAs (Adobe PDF)
California Code of Regulations (Search: Cal Code Regs > CCR Titles, Title 25, Division 1, Chapter 7, Subchapter 21, Articles 1-14)
Economic Development Areas Manual
Enterprise Zone Act (California Statute, Government Code, Section 7070-7089)
FEMA: California Disaster History
Maps and Street Ranges (Enterprise Zones and TEAs)
State Contracts and Preference Points (for Enterprise Zones and LAMBRAs)
Summary of Voucher Activity for Enterprise Zones (Microsoft Excel)
Tax Publications — Franchise Tax Board