Taking Advantage of Enterprise Zone Tax Credits in California

A topic on the forefront of many Rancho Cordova business owners’ minds is the newly awarded Enterprise Zone. What are the tax credits? How much can you save? How does this affect your business? With so many complex and confusing facets to consider, business owners may choose to have a firm providing tax incentive services do the research for the most financial tax benefit.

Romo and Associates, Inc. has been successfully providing businesses with state and federal tax incentive services for ten years. Based in El Dorado Hills and with ties to the Rancho Cordova community, Romo and Associates is excited for the businesses in Rancho, as they will soon be able to take advantage of the conditionally designated Enterprise Tax Zone.

A portion of the Enterprise Tax Zone benefit comes from the hiring credit. A full time employee working a typical 40 hour week can yield a tax credit of $37,000 over a five year period. There are twelve different criteria that can be met for employees to qualify for this credit for business owners, and only one needs to be met. Albert Romo, President of Romo and Associates, says that employers are generally surprised with how broad the criteria is. Romo and Associates will come in to your business and perform short, two to five minute screening process of your employees to determine who meets the hiring credit criteria.

Understanding the sales and use tax is also vital to enjoying the full benefits of the Enterprise Tax Zone designation. When a company purchases any piece of equipment that will be used exclusively in the Enterprise Zone, they will receive the full amount of sales tax back as income tax credit. Romo and Associates have found that many businesses can completely eliminate their income tax through the use of these credits.

Unrelated to the Enterprise Zone, but still highly important for local businesses, the Federal Work Opportunity tax credits apply to any business, anywhere. Recently, Congress expanded the demographics to which the tax credits apply. When businesses hire targeted groups of people such as recent veterans or disconnected youth, the employer will receive federal tax credits.

Other tax credits unrelated to the Enterprise Zone are the Research and Development credits. Businesses can receive both state and federal credits for qualified research expenditures. This opportunity is now open to far more industries and many more businesses will find that they can utilize these credits.

The outlook for Rancho Cordova businesses is surprisingly optimistic, thanks to the Enterprise Zone designation. Studies show that Enterprise Zones business growth rate are twice as high as neighboring areas that are not in the Enterprise Zone. Romo reminds Rancho Cordova businesses that the program was designed to save them money so they will be able to reinvest. In a period of what some may see as economic hardship, Romo and Associates know that the Enterprise Zone designation can help enable businesses to stay in the area and that it will benefit the entire community. Michael Snead, Business Development Manager for Romo and Associates, says that he, “personally know[s] companies that only look in Enterprise Zones when they’re expanding”.

Being invested in the Rancho Cordova community, Romo and Associates are optimistic for what the future for business in Rancho Cordova holds. As part of the Rancho Cordova Chamber of Commerce and the staff at University of Phoenix in Sacramento, Romo and Associates are just as successful providing services to small businesses and global companies.

For more information on the conditionally designated Enterprise Zone or Romo and Associates‘ services, please call 941-8383.