The California Enterprise Zone program is set to expire at the end of 2013; however, there were a number of unanswered questions regarding the administration of the program following its repeal. For example, it was unclear if vouchering for the Enterprise Zone Hiring Credit would continue beyond December 31, 2013. Many zones had indicated they would not accept voucher applications beyond that date.
In order to clarify how the program would wind down, AB 106 and SB 100 were drafted. AB 106 permits vouchering until January 1, 2015 and clarifies that all qualified hiring ends on December 31, 2013. AB 106 also stipulates that the ten-year carryover period for Enterprise Zone credits unused by 2013 begins on January 1, 2014. SB 100 provides that equipment eligible for the Enterprise Zone Sales or Use Tax Credit must be purchased by December 31, 2013, but may be placed into service at any point during 2014. Governor Brown signed both AB 106 and SB 100 into law on September 26, 2013.
The takeaway is that taxpayers now have additional time to claim these valuable Enterprise Zone benefits, but clearly the clock is ticking. Keep in mind that every qualified employee may generate more than $37,000 in credits.