Tax Incentives and Credit

• Businesses earn an average of $35,000 in state tax credits for each qualified employee
• San Francisco Payroll Taxes are refundable for all qualified Enterprise Zone employees
• Sales and use tax credits for manufacturing, technology, and motion picture equipment
• Enterprise Zone companies are eligible for preference points on state contracts
• Lenders to Enterprise Zone businesses can claim deductions on interest revenue
• Net Operating Losses may be carried forward up to 15 years
• Business may expense certain depreciable assets up front
• Unused tax credits can be applied to future tax years

• Firms that engage in research may be eligibile to recover expenses such as wages and supplies
• Credits can be applied towards tax liabilities in other years
• Businesses receive credit at both state and federal levels

• Los Angeles businesses can receive a city business tax waiver of $500 and fixed business tax rates
• Businesses receive tax incentives for employing individuals who live and work in an Empowerment Zone
• Empowerment Zone-qualified employees may also qualify for WOTC/WTW incentives
• Businesses can elect not to recognize certain Capital Gains on the sale of assets
• New Los Angeles Empowerment Zone businesses pay only $25 for city business tax
• Deduction for clean up costs of hazardous material
• Water and power rate subsidies
• Section 179 Deduction ceiling increased by $35,000
• Facade improvement grants

• Employees who qualify for Renewal Community incentives may also qualify for WOTC/WTW incentives
• Businesses may elect accelerated depreciation or rehabilitation deductions for commercial buildings
• Businesses receive tax incentives for employing individuals who live and work in a Renewal Community
• 0% Tax on Capital Gains - certain capital gains are eligible for a 0% tax rate
• Section 179 Deduction ceiling increased by $35,000

• Native American employees may qualify employers for additional tax incentives
• Employers can claim up $4,000 per year for qualified employee

• State tax credit equal to 6% of capitalized manufacturing costs
• This credit sunsets in 2003 but may renew in future years

• Individuals qualified within 28 days of hire are eligible for up to $8,500 in federal tax credits