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Enterprise zone credits topic of chamber lunch

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Enterprise zone credits topic of chamber lunch

The peach colored areas are part of the enterprise zone in Manteca. The orange areas on the fringes are part of the city Manteca hopes to convince the state to include as well.

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POSTED July 29, 2009 1:09 a.m.


 Future Spreckels Park and Manteca Commerce Park firms could benefit from those portions of Manteca being included in one of 42 state-sanctioned enterprise zones throughout California.


Among the benefits are:


•A hiring tax credit of $37,400 or more per new qualified employee over a five-year period.


•Sales and use tax credit on machinery purchases for manufacturing.


•Business expense deduction up to $20,000 per year on tangible personal property.


•Net operating loss carryover of up to 100 percent for future years.


•Net interest deduction for lenders.


Manteca Chamber of Commerce Chief Executive Officer and Manteca Council Member Debby Moorhead believes not enough businesses know about the advantages of the enterprise zone designation or even what parts of Manteca are included. That is why the chamber is making the enterprise zone the focus of its quarterly luncheon on Wednesday, Aug. 5, at noon at Chez Shari at the Manteca Golf Course. The speaker is enterprise zone specialist Ed Wanket. The cost is $15 with reservations required by 5 p.m. this Friday. You can call the chamber at 823-6121 for reservations.
The biggest advantage – the hiring credit for each qualified employee – has 11 targeted groups of eligibility. The hiring credit allows an enterprise zone business that signs up for participation to reduce state income tax by a percentage of qualified wages paid to a qualified employee. The employees can be full time, part time, white or blue collar, seasonal entry level, or management.


Prior to being hired, the employee must qualify under just one of the following areas:


•economically disadvantaged.


•A qualified veteran who is either form the Vietnam era, separated from service in the last 48 months, or has a service-connected disability.


•Disabled.


•A resident of a targeted employment area.


•An ex-offender.


•A qualified displaced worker.


•Enrolled in CalWorks, Work Opportunity credit, or WIA.


•Receives public assistance such as food stamps or welfare.


•Native American Indian, Hawaiian, Samoan.


In San Joaquin County some 656 square miles are included in the enterprise zone in Stockton, Manteca. Tracy and Lathrop. Those residing in the zone due to the high unemployment are eligible employees for the hiring credit.


The credit is based on the lesser of the actual hourly wage or 150 percent of the minimum hourly wage. That means someone hired at $8 an hour - minimum wage – working 40 hours would generate a $12 an hour tax credit that helps cover payroll taxes as well. How that employee would generate tax credits over the course of five years is as follows: $12,480 the first year, $9,984 the second year, $7,488 the third year, $4,992 the fourth year, and $2,496 the final year.


Unlike a tax deduction, a tax credit is applied 100 percent to reduce the actual tax owed.


If the tax credit is greater than the tax owed the excess can be carried over into future years.


Spreckels Park and the Manteca Commerce Park on Moffat Boulevard are only a small portion of a large swath of Manteca included in the enterprise zone.


To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com


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