Enterprise Zone Credits And Local Businesses

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The state of California has set up its tax code for businesses so that those conducting business in one of forty-two enterprise zones qualify for several enterprise zone credits. Yet many businesses that qualify for these enterprise zone credits fail to take advantage of them, most often because they are unaware of the credits available. If located in an enterprise zone, your California business can benefit in several different ways.

An enterprise zone is a location in the state of California that has been identified as economically challenged. In order to bring businesses to these areas, the state offers a variety of California enterprise zone credits. By encouraging business through the use of enterprise zone tax credit to flourish in these areas, the state hopes to provide jobs for people living in the zones as well as help to stimulate the local economies.

A company with headquarters in one of the enterprise zones may qualify for enterprise zone tax credit in a variety of ways. The employees that are hired by your company may allow your company to earn enterprise zone tax credit. If your employees live within the enterprise zone, have been unemployed or received public assistance, have been in the military and are disabled, qualifying ex-felons, disconnected youth, Native Americans or Pacific Islanders, then they may qualify your business for up to $13,000 each in California enterprise zone tax credit. If you now realize that your company would have been eligible for this enterprise zone tax credit in previous years but you did not claim the credit, this may also be remedied with amended returns for the past three years.

If you add equipment to your business that allows for a reduction in fuel, you may also benefit from enterprise zone credits. Up to $4,000 in California enterprise zone tax credit on a $10,000 purchase of energy saving equipment such as geothermal heat pumps, small wind generators, photovoltaic systems or solar water heating equipment is available.

Your enterprise zone company could reap an enterprise zone tax credit for the purchase of energy efficient vehicles as well. Hybrid vehicles are very popular because they offer great strides in fuel efficiency, and if your company purchases a hybrid or diesel vehicle you will receive a California enterprise zone tax credit for your effort to reduce your fuel consumption. This credit is also available to individuals who purchase these modern vehicles.

The best way to get reliable information about whether your company is located within a California enterprise zone, and the types of enterprise zone credits for which you may be eligible, is via a professional certified public accountant familiar with these useful tax credits for businesses.