If you’re looking to expand your business, moving to a Qualified Enterprise Zone may provide an opportunity to grow in a tax-smart way.
Enterprise zones have been around for decades. And while federal tax breaks for enterprise zones expired, companies that meet certain requirements may gain state and local tax credits in exchange for locating or expanding their businesses in locales that qualify as enterprise zones.
Individual enterprise zone rules vary, but generally a company looking for tax credits will need to actively conduct a significant part of its business and earn a good ratio of its gross income within the zone. A substantial part of a company’s tangible and intangible property and services typically must be located in the zone, and enterprise zone companies typically must hire a healthy percentage of their employees from the distressed areas in which they are located.
In New Jersey, for example, which has one of the country’s longest-running enterprise zone programs, the Department of Community Affairs oversees 32 designated zones. Economic incentives are generous, including up to a $1,500 tax credit per permanent fulltime employee hired. Individual states and locales have different rules, so contact your local agencies to learn more.READ MORE