Governor Brown signed both SB 90 and AB 93 on July 11, 2013. This legislation effectively replaces
the existing Enterprise Zone program with three new incentives:
Sales or Use Tax Exemption
Equipment purchased for use in manufacturing or research and development (R&D) will be exempt
from California sales or use tax. The exemption is effective July 1, 2014 through July 1, 2021.
New Hiring Credit
This credit will be available to businesses hiring qualified employees in low-income census tracts
and former Economics Development Areas (including existing Enterprise Zones). Employers must
demonstrate a net increase in employment. It is also effective July 1, 2014 through July 1, 2021.
California Competes Credit
The Governor’s Office of Business and Economic Development (GO-Biz) will negotiate agreements
to provide tax credits for businesses that create jobs and invest in California. The awards will be in
place 2013 through 2024 and will be subject to recapture if the business fails to achieve the objectives
outlined in the agreement. Small businesses will be allocated 25% of the budgeted amount.
Given that the Enterprise Zone program sunsets at the end of 2013, businesses should act quickly to
claim those credits while they are available. Enterprise Zone credits unused at the end of 2013 will carry
forward 10 years. Additional details on the Governor’s plan can be found at http://business.ca.gov/Home.aspx .
FCG is uniquely positioned to help businesses capture existing Enterprise Zone benefits and claim these
new incentives. Call or email us to find out more.