| FEDERAL
EMPOWERMENT ZONE
The
Federal Empowerment Zone gives residents improved access to goods
and services. This zone offers Federal Tax Credits and local incentives
including: Wage credits, Section
179 deductions, Capital gains, DWP
Subsidies, City business tax waivers, and
the Brownfields tax deduction.
Is
your business is located in the Federal Empowerment Zone? Use
the Housing and Urban Development's Map directory Address
Range Locator.
EMPLOYER
WAGE CREDIT
Federal
tax credits of up to $3,000 can be claimed by an Empowerment Zone
Business on each new and existing employee. The employee must
live and work within the zone boundaries.
Visit:
HUD's
Address Range Locator to verify if your business is in the
zone or call 213-744-7111 for additional information.
Top
SECTION
179 DEDUCTION
In
general, all business taxpayers are allowed to deduct up to 100%
of qualifying tangible property. $100,000 is the maximum amount
that can be deducted through 2007. Empowerment Zone businesses
can increase this deduction an additional $35,000 through December
31, 2009.
For
more information, visit the IRS
website and refer to IRS Tax Form 4562.
Top
PARTIAL
EXCLUSION of CAPITAL GAINS
An
exclusion of 60% of capital gains is available from the sale of
small business stock issued by an Empowerment Zone business that
is a C corporation with gross assets of $50 million or less. Stock
must be acquired after December 31, 2000 and before December 31,
2009 and held for at least five years.
For
information, visit the IRS
website.
Top
DEPARTMENT
of WATER and POWER FIVE-YEAR ELECTRIC RATE SUBSIDY
The
Department of Water and Power offers a five-year electric rate
discount to new businesses moving into the zone. They have 18
months to apply for the discount. Existing zone businesses that
expand and increase their electric usage by at least 35 % in the
six months prior to submitting the application for the discount
also qualify.
For
more information, visit the LADWP
website, or call 213-744-7111.
Top
CITY
BUSINESS TAX WAIVER
The
City offers a tax waiver of the first $500 and freezes the taxes
at their current rate for five years for existing Empowerment
Zone businesses. Start-up businesses or businesses relocating
from out of the City to this zone pay only $25 annually for five
years.
For
information, visit the Office
of Finance website.
Top
BROWNFIELDS
TAX DEDUCTION
Businesses
can elect to deduct qualified clean-up costs of hazardous substances
in certain areas (brownfields) in the tax year the business pays
or incurs the costs. The contaminated property is not required
to be located in any zone.
For
information, visit the Housing
and Urban Development website or the IRS
website.
Top
|
