Employment Credit Mapping Tool – CA Economic Development Initiative
As part of the outreach for California’s new Economic Development Initiative, the Department of Finance – in conjunction with the Department of Technology – released a new online “Employment Credit Mapping Tool” to identify the Designated Geographic Areas (DGA) for the credit. With this searchable map, employers may search specific addresses to see if a location is in the DGA. The new search tool can be accessed by going to the New Employment Credit DGA Mapping Tool.
On July 11, 2013, Governor Brown signed his “New Economic Development Initiative” (AB93 and SB90) into law in an effort to bolster California’s business climate and put more Californians to work. January 1, 2014, this new law will replace the California Enterprise Zone Program which was established in 1984 to stimulate business investment in depressed areas of the State and create job opportunities for Californians.
As you can see on the map below, I entered Bressler & Company CPA’s street address in Lemoore, CA, and it says that the address is “inside a designated Geographic Area.” In fact, from looking at the map, the majority of the City of Lemoore looks to be in the zone (the green diagonal striped area).
The Economic Development Initiative includes the following three components:
1. Manufacturing Equipment Sales Tax Exemption: A statewide sales tax exemption on all manufacturing equipment and research and development equipment purchases for biotech and manufacturing companies;
2. Hiring Credits: The hiring credit may be claimed within the existing Enterprise Zones as well as in new high poverty areas. The credit includes strong labor standards and accountability measures and is wisely targeted to those who need it most – returning veterans, the long-term unemployed, low-income individuals receiving public assistance, ex-offenders and CalWORKS recipients. The standards include:
Credits may only be claimed for new jobs, not for filling existing jobs.
Credit may only be claimed for full-time jobs that pay at least $12 an hour.
Any employer that relocates within the state must give workers an offer of transfer at the same rate of compensation.
Retention requirement of at least 3 years or the state may clawback the credit.
Creates a public database of companies that claim the credit and number of jobs.
Excludes retail, restaurants, temp agencies and strip clubs from the hiring credit.
3. California Competes Investment Incentives: The opportunity for California businesses to compete for available tax credits based on the number of jobs to be created and retained, wages paid in those jobs and other factors.
The Enterprise Zone Program will end December 31, 2013, but businesses currently taking advantage of the program may still benefit from some unused credits for up to 10 years. The new “Economic Development Initiative” will be funded by redirecting approximately $750 million annually from the state’s Enterprise Zone program and sunsets in 2021 allowing for legislative review and requiring an affirmative vote to extend the sunset date.
If you have any questions about how this will affect your business, or how to take advantage of the last year of Enterprise Zone benefits in 2013, give Bressler & Company a call at 559-924-1225.