Hiring Tax Credit
View a 2008 Hiring Tax Credit formula example.
Businesses that hire Enterprise Zone-eligible employees could realize a tax savings of over $37,000 per employee over a five-year period. There are many ways for employees to qualify including: individuals who live in targeted employment areas, individuals who have participated in qualified employment and training program participants, individuals who have been recently laid-off workers, to name just a few. The tax credit is retroactive to employees hired after the Santa Clarita Enterprise Zone designation date of July 1, 2007, and excess credits can be carried forward to offset future tax obligations.
Sales and Use Tax Credit
Businesses can receive State tax credits on the amount of sales and use tax paid on qualified manufacturing equipment purchased or leased and used in the Enterprise Zone on or after July 1, 2007. In any year, individuals can claim a credit on the first $1,000,000 of qualifying purchases. Corporations can claim credits on up to $20,000,000 per year.
Business Expense Deduction
Businesses can deduct up to $40,000, depending on the year purchased, of the cost of business equipment, furnishings, and fixtures as well as other depreciable personal property used in the Enterprise Zone as a business expense. The remaining value of the purchased item can be depreciated in following years under generally accepted accounting practices.
Net Operating Loss Carryover
Businesses or individuals in the Enterprise Zone who show a net operating loss may be able to carry that loss forward for up to 15 years to reduce future tax liability. Minimum taxes still apply.
Net Interest Deductions for Lenders
A bank or individual making a loan to a business whose sole activity takes place in the Enterprise Zone may deduct direct expenses incurred in making the loan from the interest income. The lender may also take a deduction equivalent to the net interest produced by the loan. The lender may not have an equity interest in the business.
As a borrower, this could mean more favorable rates or terms on a business loan.
Income Tax Credit for Employees
Qualified employees working in the Enterprise Zone may qualify to claim state tax credits on their personal income tax.
Please refer to the Franchise Tax Board’s Enterprise Zone Guidelines 
(FBT3805Z) or contact your tax advisor for more information.
For more information please contact the Franchise Tax Board/Enterprise Zone Hot Line at 916/845-3464.
The Santa Clarita Enterprise Zone office will be happy to answer any questions that you may have or direct you to the proper office.