Manufacturer Advantage - City of Long Beach
Assistance for Manufacturers Using Recycled Resources
 
USING
RECYCLED MATERIALS 		MANUFACTURER ADVANTAGES BUSINESS
IN LONG BEACH		 DO YOU QUALIFY?
Using Recycling Resources



FOR EXAMPLE...
SALES AND USE TAX CREDITS:

If you spend $50,000 to purchase eligible equipment, the Los Angeles County sales tax is 9.25% or $4,625. You may take a credit of $4,625 against your state business income tax on Zone income. If you cannot use the full $4,625 in the year that the purchase was made, you may carry the remainder as a credit against next year’s tax on Zone income.

HIRING CREDIT:

If you hire an employee who is eligible for a job training program, and works 2,080 hours during the year earning a total of $24,960 ($12 per hour), you may take a credit of $12,480 ($24,960 x 50%) against your state business income tax for that year. Full-time, part-time, temporary, or seasonal employees all qualify.

BUSINESS EXPENSE DEDUCTION:

If, in January, you purchase a $10,000 oven, you may elect to treat 40% of the cost of the oven as a business expense, rather than a capital expense.  For the year the property is placed in service, you may deduct the eligible cost in the current year, rather than depreciate it over several years.

NET OPERATING LOSS CARRYOVER:

In your first year of business in the Zone, you show a $5,000 net operating loss resulting exclusively from Zone activity, resulting in minimum business income tax liability that year. The following year, you show an $8,000 profit. You may carry over the $5,000 first year loss to claim against your state business income tax on Zone income.

 

Tax Credits & Deductions

Designated in January 1992, the California Enterprise Zone Program offers state tax credits and other benefits to companies that site offices and factories in designated areas of Long Beach and who employ workers from those areas. These incentives can be particularly attractive to small businesses. The Enterprise Zone offers:

  • Sales and Use Tax Credits
    Zone businesses can receive tax credits every time they hire an eligible new employee or purchase qualified new machinery, machinery parts, or pollution control devices. Tax credits are also available to lenders who make loans to businesses and to employees who work in the Zone. Any business with an address in the Enterprise Zone is automatically eligible for Zone benefits. There is no certification process.
  • Hiring Credits
    Zone businesses may reduce their state income tax by up to half the amount of the wages (up to $12/hour) paid to one or more employees hired after January 7, 2007 who have participated in or are eligible for job training and/or employment assistance programs. Businesses may earn credits of up to $37,400 per employee over a 5-year period.
  • Business Expense Deductions
    Part of the cost of furniture and fixtures purchased for exclusive use in the Zone may be deducted as a business expense in the first year the equipment was placed in service.
  • Net Operating Loss Carryover
    Zone businesses may deduct from their state taxable income 100% of any net operating losses incurred in unprofitable years for the period that the Zone has been in existence.
  • Net Interest Deduction for Lenders
    Lenders may deduct net interest on loans to a business located in the Zone.

For more information regarding the Enterprise Zone, go HERE.

 
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