Pittsburg – Bay Point Enterprise Zone

Pittsburg - Bay Point Enterprise Zone 2 What is an Enterprise Zone? Areas within California, designated by the Department of Housing and Community Development. Used to encourage growth, development, and investment in these areas. Businesses with locations within these Enterprise Zones may qualify for special tax incentives and credits

Pittsburg - Bay Point Enterprise Zone 3 Available Enterprise Zone Credits Hiring Credit Sales and Use Tax Credit Business Expense Deductions Net Interest Deduction

Pittsburg - Bay Point Enterprise Zone 4 Approved Boundary Map

Pittsburg - Bay Point Enterprise Zone 5 Available Enterprise Zone Credits Credits may be determined from January 1, 2005 to the present, and are applied to state income tax (California statute is open for 4 years). Credits can be applied to future returns, or can be amended onto previous returns. Credits can be carried over if not completely used within a certain tax year.

Pittsburg - Bay Point Enterprise Zone 6 What is the Hiring Credit? Businesses within the Enterprise Zones can claim the hiring credit for an employee who: Was hired after the Enterprise Zone received its designation, Spends at least 90% of work time on activities related to business within the Enterprise Zone, Performs at least 50% of their work within the Enterprise Zone, and Is determined a Qualified Employee.

Pittsburg - Bay Point Enterprise Zone 7 Qualified Employees Qualified employees are those who are: A resident of a targeted employment area within an Enterprise zone Recently discharged (last 4 years) or Vietnam-era veteran Displaced Workers (laid off from previous employer) Economically disadvantaged (minimal or no earnings in the 90 days prior to date of hire) Receiving SSI, AFDC, food stamps or General Assistance Work Opportunity Tax Credit (WOTC) or Welfare to Work (W2W) Eligible for services under the Workforce Investment Act – intensive services (WIA) Participant in Welfare to Work activities under CalWORKS Ex-offenders (no limitation on how far back) Native Americans (enrolled with tribe, has tribal card) Native Samoan, Native Hawaiian A disabled individual eligible (including disabled Veterans and/or enrolled in or completed a state rehabilitation plan

Pittsburg - Bay Point Enterprise Zone 8 Hiring Credit Example Assume company A has 10 employees working within the Enterprise zone, and 5 of these employees qualify. Each employee makes $10/hour and works 2,080 hours per year = $20,800 in wages The following credits would be available (estimated): Year 1$ 52,000 Year 2 20,800 Year 3 15,600 Year 4 10,400 Year 5 5,200 Total Credit$104,000

Pittsburg - Bay Point Enterprise Zone 9 What is the Sales & Use Tax Credit? An enterprise zone business may claim a credit equal to the state sales or use tax paid/incurred for purchase of qualified property. Qualified property includes the purchase of machinery or machinery parts used in the following: Fabricating, processing, assembling, and manufacturing; Data processing and communications equipment

Pittsburg - Bay Point Enterprise Zone 10 Sales & Use Tax Credit Example Corporations can claim credit on the first $20,000,000 of qualifying purchases per year. Suppose Company A purchases $10,000 worth of qualified property. The current tax rate is 9.25%. The Sales & Use Tax credit would be calculated as follows: Amount of qualifying purchases $10,000 State sales tax paid 925 Total Credit$ 925

Pittsburg - Bay Point Enterprise Zone 11 Contact Information Ed Solomon Pittsburg Bay Point Enterprise Zone Administrator Workforce Development Board of Contra Costa County 300 Ellinwood Way, 3rd Floor Pleasant Hill, CA (office) (cell) (fax)