Enterprise Zone

State Incentives

The state offers five tax credit incentives that reduce the cost of hiring new employees and investing in equipment in the Pasadena Enterprise Zone:  

• Hiring Credit Program.  This five year state tax credit, potentially up to $37,000 per qualified employee, for full-time or part-time employees that meet one of the twelve qualifying criteria under the Hiring Credit Program. Potential criteria includes but not limited to: previously laid off due to plant closure or downsizing, military veteran, public assistance recipient, and resident of a targeted employment area. Enterprise Zone business must obtain a Hiring Credit Voucher from the Pasadena Enterprise Zone Office.
• Sales and Use Tax Credit.  Allows Enterprise Zone businesses to claim a state tax credit equal to the sales and use tax paid on the purchase of qualified equipment. Qualified equipment includes assets such as manufacturing, data processing, office, audio/video, and computer equipment.
• Business Expense Deduction.  Enterprise Zone businesses may deduct up to 40% of the cost of qualified property purchased for exclusive use in an Enterprise Zone during the first year it’s placed in service.
• Net Operating Loss.  Enterprise Zone businesses may elect to carry forward 100% of their net operating loss for 15 years.
• Net Interest Deduction for Lenders.  Lenders can earn a deduction from income on the amount of net interest earned on loans made to Enterprise Zone businesses. Businesses looking for an edge in applying for a loan should bring this credit up with your lender. 

For additional information, click on Franchise Tax Board 1158 Publication. 
 

DISCLAIMER:   Facts and circumstances vary from business to business.  Please consult your tax professional about your particular situation.