Almaden Resident

News

Enterprise designation gives SJ business tax credits, incentives

By Eli Segall

Chunks of San Jose have been designated an "enterprise zone," opening up 5,900 businesses to a slew of state tax credits, rebates and benefits for the next 15 years.

The enterprise zone, designated and determined by the state's department of housing and community development, covers a swath of North San Jose and the downtown core. The zone shoots down S. First Street and ends just north of the Almaden Valley at the Monterey Road-Capitol Expressway interchange. It covers 10 square miles and more than 50,000 employers and employees.

Business leaders expect the whole city to benefit from the designation.

"It could potentially be a huge boost to San Jose," said Rich De La Rosa, president of the Almaden Business Association.

Nancy Klein, manager of corporate outreach for San Jose's office of economic development, said the benefits to businesses of all sizes are huge.

"The enterprise zone is a big deal for companies here," Klein said. "It will help attract and retain companies to the area, and free up money so businesses can buy more equipment, hire more staff, etc."

One benefit is a substantial tax credit for hiring new employees.

The tax credit lasts for five years but cannot exceed $31,544 in any given year. The first is the most beneficial year, when the credit amounts to half the new employee's salary. It decreases by 10 percent each year.

Other benefits include sales tax credits on equipment purchases of $20 million per year, up to 100 percent net operating loss carryovers, upfront expensing of certain depreciable property and preference points on state contracts.

San Jose was first designated an enterprise zone in 1986, and the city was renewed in 2001 for another five years. The current designation lasts until 2021.

To find out if a business is part of the enterprise zone, call 408.535.8191 or visit www.sjeconomy.com/ez.