Enterprise Zone Tax Credit Savings Per Employee
|Year||Allowable Wages||Percentage||Tax Credit|
|Total Tax Savings||$37,440|
Sales and Use Tax Credit: California income or franchise tax may be reduced by the amount of sales or use tax paid on certain manufacturing machinery purchased for exclusive use in an Enterprise Zone.
Hiring Credit: A qualified business may reduce taxes by up to 50% of the amount of wages paid to one or more qualified employees. These state credits are in addition to any related federal tax credits.
Net Operating Loss Carryover: Individuals or corporations in an Enterprise Zone may carry over net operating losses (NOL) to future years to reduce the amount of taxable income for those years.
Business Expense Credit: Part of the cost of certain property purchased for exclusive use in an Enterprise Zone may be credited as a business expense in the first year it is placed in service.
Net Interest Deduction for Lenders: A deduction from income is allowed on the amount of "net interest" earned on loans made to a business located in the Zone.
Personal Incentives: Employees may claim a tax credit to reduce the amount of their income tax on wages earned in the Zone.
Public/Private Financing Partnerships
Revolving Loan Fund: The Merced County Department of Business-Economic Opportunities operates a Revolving Loan Fund (RLF). The RLF is used for gap financing and its goal is job creation. One permanent job must be created or retained per $10,000 RLF dollars loaned. The maximum loan is $375,000.
Commercial Rehabilitation Loan Program: The Merced Redevelopment Agency operates a loan program for the renovation and remodeling of structures within Redevelopment Project Areas. The interest rate is six percent and loan terms range from 10 to 15 years.
Disposition and Development Agreements: The DDA is another flexible tool available to the Merced Redevelopment Agency which can provide substantial help to property owners or developers of projects within the Project Area. DDA’s are set through individual negotiations on specific projects. Assistance can be in the form of low-interest financing, cost-sharing for public improvements, or other assistance. Projects must receive direct approval from the Redevelopment Agency Commission.
Foreign Trade Zone: A US Foreign Trade Zone (FTZ) is a designated area which, for Customs purposes, is considered outside the US. Nearly any imported merchandise can be brought into a Zone for almost any kind of manipulation, duty-free. In December 1997, the City of Merced became part of the Merced County Foreign Trade Zone. This FTZ encompasses seven Central Valley counties including Stanislaus, Merced, Mariposa, Madera, Fresno, Kings, and Tulare. Benefits that may be available to your company include duty deferrals, duty elimination, duty reductions, and custom fees reduction.
Recycling Market Development Zone: The Merced/Atwater Recycling Market Development Zone program offers assistance to businesses who stimulate markets for recycled material. The assistance includes recycling equipment tax credit, technical assistance, and many local business incentives. In addition, the program provides low interest loans for 50% of the project, up to a maximum of $1 million.