San Diego Enterprise Zone Tax Credits

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San Diego Enterprise Zone Tax Credits

The City of San Diego had two different Enterprise Zones: the Metropolitan Enterprise Zone and the South Bay Enterprise Zone. In 2006, the two zones were merged and enlarged to become the San Diego Regional Enterprise Zone. It includes portions of San Diego in the Second, Third, Fourth, Seventh and Eighth Council Districts, as well as parts of the City of Chula Vista and National City. Portions overlap with the City’s Foreign-Trade Zone and a Recycling Market Development Zone, which offer other benefits. A special enterprise zone is located at the Naval Training Center and provides advantages similar to other Enterprise Zones, though specific eligibility criteria and benefits may differ. Businesses of all types that are located within a Local Area Military Base Recovery Area (LAMBRA) are eligible.

Hiring Credits

A Tax credit of up to $37,440 over a 5-year period per each qualified employee can be claimed by an business located in the San Diego Enterprise Zone. An employee can qualify under any one of 13 different categories.
 
 
How do I know if my business qualifies?
» To see if your business qualifies, fill out the Enterprise Zone eligibility form
 
 
San Diego Enterprise Zone Incentives:

  • Hiring Tax Credits may be claimed on up to half the wages paid to qualified new employees.
  • Tax credits may be claimed for sales taxes paid on equipment purchased for manufacturing
    or production purposes.
  • All net operating losses may be carried forward as a deduction in future years.
  • Business equipment depreciation can be accelerated, up to a limited amount.
  • Low-income employees can claim their own personal income tax credits.
  • The state will give priority for Industrial Development Bond applications.
  • Lenders (both commercial and private) may deduct net interest income on loans to
    Enterprise Zone businesses.

 
 

Since most of these incentives are non-refundable credits, a business or its owners must pay tax in order to benefit; however, many of the credits carry forward indefinitely. This means we can secure the credits now for use at a later time. Participating businesses save anywhere from thousands to hundreds of thousands of dollars per year.