More local businesses utilize enterprise zone program

By Manny Otiko

Local enterprise zones, which are designated areas that offer tax credits to businesses for hiring disadvantaged workers and making capital investments, are citing increases in the number of tax credits filed for workers this year.

Last week the San Bernardino Valley Enterprise Zone (SBVEZ) announced that businesses utilizing the zone have filed more than 2,000 hiring tax credit vouchers so far this year. Zone administrators suggest the jump in activity is a good indicator that the numbers of vouchers filed in 2011 will double the number filed in 2010.

“Each year we seem to double the number of vouchers filed from the previous year, and having already reached 2,000 vouchers is a good sign we will do it again this year,” said Wendy Clements, SBVEZ zone manager. “The continued growth of the program locally shows that our efforts to educate employers about the zone are paying off.”

Last year, approximately 2,300 vouchers were filed by 182 businesses in the San Bernardino Valley Enterprise Zone, which was established in 2006 and includes the city of Colton, city of San Bernardino and unincorporated areas of the county. This year more than 145 businesses have already taken advantage of the incentive.

According to other news reports, the Hesperia Enterprise Zone, which became active in April 2010, has also indicated a jump in the number of vouchers filed this year compared to last year. To date, approximately 80 vouchers have been filed in 2011. Only 60 were filed last year.

California has 42 enterprise zones, four of which are in the Inland Empire. In addition to the San Bernardino Valley Enterprise Zone and the Hesperia Enterprise Zone, there are zones in Coachella Valley and Barstow. 

The enterprise zones program was created to spur economic activity in disadvantaged areas by incentivizing businesses to make expansion and workforce investment in those communities. The zones are also a useful tool for attracting new businesses and jobs to these areas.

The most commonly-used program incentive is the hiring tax credit, which grants employers a tax deduction for providing a job to a local disadvantaged worker who faces barriers to employment. Common barriers include long-periods of unemployment, receipt of public assistance, lack of skills and education, and having a disability or a criminal history. For each qualified employee they hire and keep employed, a business can reduce its state income tax by $37,000 over the five-year time-frame.

Local businesses can find out if they qualify for these incentives by contacting their local enterprise zone.