California Enterprise Zone “clean-up” Legislation

Senate Bill 100 and Assembly Bill 106 signed into law on September 26, 2013, (to replace the “California Enterprise Zone” program) made some changes to the expiration of the Geographically Targeted Economic Development Areas (G-TEDAs).  This new legislation takes effect on 1/1/2014, and is tagged  the “Economic Development Initiative“.  This Enterprise Zone “clean-up” legislation primarily affected two parts of that program.

Hiring Credit Vouchering

This “clean-up” bill affected the timing of receiving vouchers for all G-TEDAs including enterprise zones, manufacturing enhancement areas, targeted tax areas, and local area military base recovery areas. Qualified taxpayers that hire a qualified employee on or before December 31, 2013, may file applications for vouchers during 2014 with their local agents, but all vouchers must be issued on or before December 31, 2014.

Sales or Use Tax Credit

The clean-up bill extended the time allowed to place an asset in service for enterprise zones. For enterprise zones, qualified assets purchased on or before December 31, 2013, may be placed in service on or before December 31, 2014, and still qualify for the credit.

FAQs regarding the expiration of the areas and details regarding new incentives available in 2014 are now on the California State Franchise Tax Board’s website.

If you have any questions about either the Enterprise Zone or the new Economic Development Initiative, give us a call at 559.924.1225.

This article was taken from the State of California Franchise Tax Board’s FTB Tax News for November 2013.