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zone&o=10616
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Coachella Valley Enterprise Zone
The Coachella Valley Enterprise Zone Authority (CVEZA) established in 1992 is one of 42 zone authorities competitively designated for 15 years by the State of California pursuant to approval of individual authority's detailed and comprehensively supported application and memoranda submittals. Each enterprise zone publicly promotes, explains, supports, and administers business applications for vouchers issued to its zone establishment(s) that grant certain specific, yet highly liberal, hiring and sales/use tax credits, business deductions and other business empowerment arrangements that mitigate--and often eliminate--the firm's state income tax obligations. Although under the aegis of the State's Department of Housing and Community Development, a zone authority is usually funded through various partnership arrangements among city, county or other local government agencies. The public policy behind designation is to maximize the economic improvement and vitality of both the encompassed and adjacent communities through common and unique local incentives and special assistance to zoned business enterprises.

CVEZA'S Geographical, Historical, Beneficial and Procedural Particulars

In addition to CVEZA's webpage which will be extensively updated by the end of 2008, familiarize yourself with CVEZA's interactive Google Mapto see if your business or prospective relocation is situated to take full advantage of the communities' facilities as well as the Zone's financial incentives and benefits. Set at "satellite" view and comprehensively complete with placemarks, it can easily be changed to "map" view and zoomed in and out very conveniently for a variety of information, business and planning purposes. CVEZA's area generally follows I-10 and Hwy 86S for in the eastern half of Riverside County's Coachella Valley and encompasses major residentially, industrially, and commercially zoned portions of Thousand Palms, Indio, Coachella, Thermal, Mecca and Flowing Wells.

The Zone's original 15-year designation commenced November 11, 1992 and expired the same date in 2006. The State maintained a subsequent, conditional designation until a final redesignation was made April 11, 2008.

CVEZA is located at 53990 Enterprise Way, Ste. 13, Coachella, CA 92236 at the cross street of Avenue 54; phone: 760-391-5176; fax: 760-391-5178.

  • Hal Joseph is the Executive Director and primarily educates, directs and helps with businesses who prospectively desire to establish operations within the Zone.
  • Will Wyche is the Business Client Service Coordinator and primarily educates and helps businesses that are already established within the Zone to apply and voucher.
  • Janie Ureste is the Zone's Administrative Assistant who is the backbone of the organization and determines application compliance and voucher issuance.

Because they are public employees, their services are free of charge!

Major financial incentives

Over the years, a number of misconceptions about employee qualification and employer vouchering eligibility have unfortunately developed within both the business and accounting communities seriously depriving the business community of its many financial benefits. Hopefully the following highlighted insights will aid in assuring both the solo and corporate offices, and, most importantly, all Zone business establishment decisionmakers, accountants, and tax preparers and advisors that doing business within the CVEZ entitles virtually all business enterprises, regardless of size, to the following substantive, yet simple, financial incentives:

1. Employer Hiring Credit: Zone business establishments may reduce or even eliminate their state income tax by taking a tax credit based on a portion of wages (not to exceed 150% of the state minimum wage) paid to each qualified employee up to $37,440 (or more) over the five-year tax period (60-month period) from date of hire. Indeed, the credit regularly exceeds $10,000-$12,000 for each full-time qualified employee the first taxable year from the date of hire.

  • So long as time, payroll and tax records are maintained and kept, employee qualification is not dependent upon either consanguinity (family) or affinity (marriage/in-laws) among employers and employees or corporate officer status except for time spent as corporate functionaries. In other words, corporate officers should, for the most part, qualify as employees of the corporation.

  • Unless an employee spends less than 50% of his annual work time within the Zone, ninety percent (90%) of all business employees regularly qualify in most instances, and, of that, seventy percent (70%) regularly qualify solely because the employee lives within a Targeted Employment Area (TEA) consisting of a number of US census tracts in and around the Zone's commuting area.

  • A simple one page application form must be completed, documented, and submitted for each qualifying employee along with a minimal filing fee of $20 per employee application. Usually almost never is anything signed and there is no further verification required!

2. Sales and Use Tax Credit: Sales and use tax credits paid for new machinery and parts used within the Zone may be applied to credits against state income tax in addition to employee hiring credits. Qualified property includes machinery used to

a. manufacture, process, fabricate, or otherwise assemble a product;

b. produce renewable energy resources;

c. control air or water pollution;

or, is

d. data processing and communications equipment including, but not limited to computers, computer-automated drafting systems, copy machines, telephone systems, and fax machines;

e. motion picture manufacturing equipment central to production and postproduction, including but not limited to, cameras, audio recorders, and digital image and sound processing equipment.

3. Business Expense Deduction: Forty percent (40%) business tax deduction from the purchase price of previously described qualified property equipment used within the Zone in lieu of capital depreciation in the first year of service.

4. Net Operating Loss Carryover: One hundred percent (100%) loss carryover by Zone establishments for 15, instead of the standard 10, taxable income years.

5. Net Interest Deduction for Lenders: Zone business interest payments to lenders on commercial loans is not taxable income, but rather a tax deduction to the lender which gives Zone firms substantially greater bargaining power in obtaining both lower loan interest rates and more beneficial loan financing terms than non-zone businesses.

Other incentives

1. Bidders Preference. Enterprise Zone businesses can receive a Bidders Preference of 5% when bidding on State of California contracts.

2. Child Care and Rideshare Tax Credits. The State of California allows tax credits for employers who participate in child care and rideshare programs.

3. Reduced land costs or fee waivers may be available depending on capital investment and the number of jobs created by a new business within the Zone.

4. Fast Track Permitting. Forty-five (45) day fast track permitting for eligible site plans for industrial projects.

5. Site Selection Assistance. The Enterprise Zone staff will assist prospective new businesses in their search for suitable sites within the Zone

Further benefits

1. All these incentives can be applied for retroactively on previously filed returns with a four-year time limitation so long as the employer has time, payroll, receipt and tax verification records. However, hiring credits cannot be banked beyond past tax years if they could have been used had the employer vouchered.

2. Except for certain Subchapter S cases, all unused credits and deductions are 100% bankable (again, without time limitation) for future application against future state income tax assessments. Sub. S credit carryover banking is limited to 33 1/3%.

3. Employees may qualify for state tax credits on their own personal tax returns by virtue of working within the Zone by filing under FTB Booklet 3805z--but don't let this publication intimidate you.

First qualification requirements and how to avoid credit recapture

1. Employees must work for a Zone employer 90% of their annual work time.

2. Employees must physically work within the Zone 50% of their annual work time for the employer.

3. While FTB can technically recapture credits for an employee who is improperly terminate before the end of two taxable years from the date of hire, the exceptions to this rule effectively make the rule functionally meaningless. (SEE page 5 under §1B Hiring Credit Recapture, please read "Note" in the FTB Booklet 3805z) So employers should never wait to apply for employee vouchers and should do so at the time of hire.

WHAT'S MOST IMPORTANT FOR EMPLOYERS: VOUCHERING MADE SIMPLE--VERY SIMPLE

Rarely is there anything to sign. In order to submit the new application form for the state tax hiring credit voucher, most employers already maintain many of the signed verifying documents (W-4s, I-9s, IDs) that are required through other IRS, INS, or DMV laws. So employers rarely have to involve employee-candidates with specific document requests.

The only real work is to select the correct (and simplest) qualification. As stated above, the most convenient is "No. K", the Targeted Employment Area (TEA). Do not confuse Enterprise Zone (where the employer's establishment must reside) with the TEA (where an employee must reside--if the TEA qualification is selected). They are not the same.

The first way to verify the appropriate TEA census tract for employees hired after November 11, 2006, is to interface " HUD's address entry window." Merely type in the address search to obtain the 2000 census tract number. Compare the number with those listed on CVEZA's 2000 census tract list (which will be provided to you upon request by CVEZA) to verify that the employee lives within the TEA.

However, HUD does not carry census tracts for employees hired before November 11, 2006 (1990 Census Blocks).

So a second and far more convenient way to verify TEA residence for both the 1990 and the 2000 Census Blocks is to first link here to the current 1990 Census Block TEA map and 2000 Census Block TEA map

Here's how it works:

First, if not already done, an employer must establish a Google account and then add these two TEA maps to the "My Maps" part of the employer's account (similarly the employer can save the CVEZA mapand/or the Old CVEZA map (1991-2006) if he so chooses). If this step is not done, any employee-candidate address search will not utilize the TEA maps.

Second, understand which map to use once the employer has added both the 1990 and 2000 Census Block TEAs to its Google account's "My Maps":

  • Employee-candidates hired before November 11, 2006 use 1990 Census Block TEA map only.

  • Employee-candidates hired between the expiration of CVEZA's first designation on November 11, 2006, and its recent designation on April 11, 2008, use either the 1990 or 2000 Census Block TEA maps.

  • Employee-candidates hired after April 11, 2008, use 2000 Census Block TEA map only.

Third, type or paste and then search each employee-candidate's address in the search boxes above the respective maps to visually verify whether the employee lives within the appropriate blue TEA to determine qualification under the respective TEA. If the previous steps have been correctly followed, this should take no time at all. Hundreds of employee-candidate addresses can be processed in an hour.

Fourth, all voucher application submittals tendered to CVEZA must be accompanied by certain verification documents. A succinct list of documents for all 13 possible employee qualifications is provided to anyone upon request by the CVEZA. However, as stated above, in the case of TEA selection, the employer should already have the verification document (I-9 (INS), W-4 (IRS), etc.) by law. Make sure that the employee's address on both the verification document and application match.

Fifth, all applications must be accompanied by a non-refundable application fee check equaling $20.00 for each employee application.

The CVEZA staff is here to help. So, if any of this sounds too time consuming or confusing, the employer can simply call the CVEZA during regular business hours at 760-391-5176 and request TEA verification over the phone for each employee it desires to apply for vouchering.

If an employee-candidate fails to qualify under the TEA, he can qualify by meeting any of the following 18 requirements:

  • California Work Opportunity and Responsibility to Kids (CalWORKS).
  • Workforce Investment Act (WIA) (enrolled/eligible for WIA Intensive Services or Core B)
  • Work Opportunity Tax Credity (WOTC) or successor program.
  • Economically disadvantaged individual 14 years or age or older (must attach an Income Verification Worksheet.).
  • Dislocated worker under one of the following categories:

*Terminated, laid off, received notice of termination or layoff, and eligible for or has exhausted unemployment benefits, and is unlikely to return to his or her previous industry or occupation.

*Plant, facility, or enterprise closure.

*Long-term unemployed and has limited opportunities for employment or reemployment.

*Formerly self-employed but now unemployed due to genereal economic conditions.

*Former Department of Defense civilian employee at a military installation.

*Active member of the armed forces or National Guard as of September 30, 1990.

*Seasonal unemployment.

*Clean Air Act compliance.

  • Disabled individual or service-connected disability veteran.
  • Vietnam Veteran or veteran recently separated.
  • Ex-offender.
  • Recipient of, or eligible for, Public Assistance (AFDC, SSI, FoodStamps)
  • Native American, Native Samoan, Nativer Hawaiian or member of another group of Native American descent.

Authorized vouchers are generally received by the employer four to six weeks after receipt by the CVEZA of the appropriate applications accompanied by the correct filing fees.

Coachella Valley Lifestyle Advantages

The Coachella Valley is one of the fastest growing regions in Southern California and offers an ideal place to work, play and raise families Some areas offer all three government incentives which include a foreign trade zone (NAFTA), the state enterprise zone, and a federal empowerment zone

Businesses that locate establishments within the Zone don't have to face the congestion, environmental restrictions and other problems of metropolitan areas. Business owners are finding that the year-round sunshine and advantages listed below all make for one of the most profitable business environments in the world.

Coachella Valley Resources

CVEZA's City and County Partners

Chambers of Commerce

Job, Career, and Employment Counseling and Consultation

Coachella Valley Collegate Education

Higher Education

Local Services, Utilities

Transportation

Thousand Palms, CA 92276. P: 760-343-3451 (from Desert Hot Springs, 323-4010) or toll free at 1-800-347-8628.

Business Support, Financing and Marketing

Lifestyle

External links

Wikipedia, the free encyclopedia © 2001-2006 Wikipedia contributors (Disclaimer)
This article is licensed under the GNU Free Documentation License.
Last updated on Tuesday September 16, 2008 at 14:42:50 PDT (GMT -0700)
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