What is an Enterprise Zone?

Enterprise Zone were created in California in the 1980's to stimulate business investment in areas traditionally slow in obtaining its fair share of private investment dollars and to increase jobs opportunities in areas of high unemployment.  The legislative purpose of the Enterprise zone Porgram is to "stimulate business and industrial growth in the depressed areas of the State."  Additinally the program was established to help attract business and industry to the state, to help retain and expand existing state business and industry, and to create increased job opportunites for all Californians. San Diego is home to one of 42 Enterprise Zones statewide.

California Enterprise Zone Benefits

The major benefits of the Enterprise Zone Program are the tax savings on California business income tax.  These include:

Sales or Use Tax Credit

A tax credit against the purchase of new manufacturing, assembly, data processing or communications equipment equivalent to the amount of sales or use tax.

Hiring Credit

A tax credit on the wages to qualified new employees over a fiveyear period (up to 50 percent in the first year, 40 percent in the second year, etc.).  This credit could exceed $34,000 per eligible employee.

 Accelerated Depreciation Deduction

The option to accelerate depreciation on business property. 

 Net Interest Deduction for Lenders

Allows lenders a deduction on the net interest earned from loans made to Enterprise Zone businesses.  Qualified loans include business loans, mortgages and loans from noncommercial sources.

Preference Points

Priority for various state programs, such as state contracts/grants.

Other Benefits:

• The state will give priority for Industrial Development Bond applications.
• Assistance with recruitment and hiring targeted employees recruitment, hiring, and tax credits
• Expedited permit processing for commercial projects
• Access to capital through financial assistance programs
•  Access to specialized technical assistance programs
  

Enterprise Zone Location

The City of San Diego was originally home to two different Enterprise Zones: the Metropolitan Enterprise Zone and the South Bay Enterprise Zone.  In 2006 and 2007, the two zones expired and the Cities of San Diego, Chula Vista, and National applied for and received  a new Enterprise Zone, the San Diego Regional Enterprise Zone.   This new zone includes portions of San Diego in the Third, Fourth, Seventh and Eighth Council Districts, as well as parts of the City of Chula Vista and National City.

Additionally, portions of the SDREZ overlap with the  Foreign Trade Zone , the Recycling Market Development Zone,   the Federal Renewal Communities and the HUB Zone Programs which may offer additional benefits to Enterprise Zone companies.  For more information on other business programs, click on the City partner's links to visit their websites. 

Information about the HUBZones is available on the U.S. SBA Office website at  www.sba.gov.