Two New Bills Alter California Enterprise Zone Credit Program

The California Enterprise Zone credit program will see significant changes beginning January 1, 2014 due to two bills signed by Governor Jerry Brown on July 11, 2013: Assembly Bill 93 and Senate Bill 90. A partial sales and use tax exemption of approximately 4.19% is available on up to $200 million of qualified manufacturing and research and development equipment for certain manufacturers as well as Biotechnology, Physical, Engineer and Life Science companies that conduct research and development. The partial exemption applies to purchases made on or after July 1, 2014 and will expire on July 1, 2022.

California businesses that create new jobs statewide may qualify for a new hiring credit over the next seven years for hiring certain employees in specified economic development areas and areas designated with high unemployment and poverty rates. The credit applies to wages between 150-350% of California minimum wage and is equal to 35% of wages paid in the first five years of employment, capped at $56,000. Strict rules apply to receive the credit including the timing of requesting the credit and reporting requirements. The credit may only be taken on an originally filed income tax return.

Click the links to read Assembly Bill 93 or Senate Bill 90.

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