Business Incentive Zone
Incentives
Tulare County and its eight cities were awarded California's sole Targeted Tax Area designation on November 1, 1998. This tax incentive program is designed to stimulate business development and employment growth. Qualifying businesses locating, expanding or continuing to do business in the Zone are encouraged to take advantage of these exclusive incentives:
  • 21 Day permit fast-tracking
  • 5 Year, no interest, development fee deferral
  • State tax credits for hiring qualified employees
  • State tax credits for sales or use taxes paid for certain property
  • Fifteen year net operating loss (NOL) carryover
  • Accelerated expense deductions

21 Day Permit Fast-Tracking
One of the major Zone benefits is our streamlined permit processing – no bureaucratic headaches. We pledge projects will be fast tracked and a Zone Coordinator will serve as your local liaison.

Interest Free 5 Year Fee Deferral
The Zone provides an easy deferred payment plan for your development fees and no payment is required until occupancy. Payment may be made in five annual installments – interest free. Your deferred fees may include - permit processing, sewer and water connections, storm drain, traffic impact, etc.

State Hiring Tax Credit
Over $37,000 in State Tax Credits are available over five years for each eligible employee. A qualified employee is anyone who is a displaced worker, eligible for Jobs Training Partnership Act (JTPA), economically disadvantaged, disabled, ex-offender, Native American, eligible for SSI, TANF, CalWORKs, food stamps, general assistance or resident of the Business Incentive Zone.

Hiring Tax Credit Examples

Year % $8/hour $9.50/hour $11/hour*
1 50 $8,320 $9,880 $11,440
2 40 6,656 7,904 9,152
3 30 4,992 5,928 6,864
4 20 3,328 3,952 4,576
5 10 1,664 1,976 2,288
     
TOTALS  $24,960 $29,640 $34,320

*These examples are intended as illustrations only. For official rules, please see State of California Franchise Tax Board Publication 1157, "Guidelines for Targeted Tax Area Tax Incentives."

The maximum hiring credit available is based on an hourly wage of $12.00. If an employee earns more than $12.00 per hour, the employer must compute the credit using $12.00 as the hourly wage.

Full-time, part-time, temporary or seasonal employees all qualify if
they are just one of the following:
  • A resident of the Targeted Tax Area
  • A person eligible for the Jobs Training Partnership Act (JTPA) or the Greater Avenues for Independence Program (GAIN)
  • An economically disadvantaged person 14 years old or older
  • A disabled individual
  • An ex-offender
  • A Native American
  • A displaced worker
  • A Vietnam Veteran
Or an Eligible recipient of:
  • SSI
  • AFDC
  • Food Stamps
  • General Assistance
Calculating Your Hiring Tax Credits
Tax Credit Calculation Example - 25 Employees at $8.00/hour

Year Calculation - 25 employees Annual Incentive
1 $16,640 x 50% x 25 $208,000
2 $16,640 x 40% x 25 $166,400
3 $16,640 x 30% x 25 $124,800
4 $16,640 x 20% x 25 $83,200
5 $16,640 x 10% x 25 $41,600
California Sales or Use Tax Credit
Example of BIZ Tax Incentives

Your business purchases Sales tax Your sales & use tax credits
$ 20,000,000 x 8.25 $ 1,650,000
$ 1,000,000 x 8.25 $ 82,500

 


With this credit, you may be able to reduce your State Income or Corporate Tax Liability. Machinery for manufacturing, processing, communications, data processing, or motion picture production, etc. purchased for business usage inside the Zone normally qualifies. Individuals can claim a credit on the sales or use tax paid on the first $1,000,000 of qualifying purchases and corporations on the first $20,000,000. At 8.25% tax that's a credit of $1,650,000. These credits do not apply to real estate purchases. With some restrictions, tax credits can be carried over.

15 Year Net Operating Loss Carryover
Net operating losses of individuals or corporations doing business in the Targeted Tax Area may be carried over to future years to reduce the amount of taxable zone income for those years. For example, in your first year of business in the Zone, you show a $5,000 net operating loss exclusively from zone activity, resulting in minimum business income tax liability that year. The following year, you post an $8,000 profit. You may carry over the $5,000 first year loss to claim against your state business income tax on zone income.

Accelerated Business Expense Deductions
The cost of qualified property purchased for exclusive use in the Targeted Tax Area may be deducted as a business expense in the first year it is placed in service. The type of property, which qualifies for this special treatment, is tangible personal property (not real estate), which is used for business purposes and is eligible for depreciation or amortization. This includes most equipment and furnishings purchased for exclusive use in the Targeted Tax Area, but not office supplies or other small items, which are normally ineligible for depreciation.

Do I Qualify?
Whether your company is large or small, lucrative Zone advantages are available to new and existing businesses who are located in the Zone in these Standard Industrial Classification Codes (SIC):

Click here for SIC code links (Beginning in 2003, the Employment Development Department will use the North American Industry Classification System code; however the SIC codes will continue to be used to determine Targeted Tax Area eligibility)

Is my business located in the Zone?
Within the Tulare County Business Incentive Zone borders are affordable manufacturing and commercial sites. Situated on Highway 99, Tulare County offers excellent transportation access throughout California and the Western United States.

The Zone includes the Cities of Dinuba, Exeter, Farmersville, Lindsay, Porterville, Tulare, Visalia, Woodlake and the Redevelopment Areas in Earlimart, Pixley, Goshen, Cutler-Orosi, and Traver.

See MapStreet Range

Hiring Assistance
The Workforce Investment Board (WIB) Business Resource Specialists are ready to personally assist you with your business and employment needs. This service gives you valuable pre-screening - guaranteeing that your job candidates meet your specific hiring requirements. Even better - these referrals assure you of meeting state job tax credit requirements. Other training incentives are available including - Occupational Skills Training and partial reimbursement for On-The-Job Training.

Download Forms

The Targeted Tax Area (TTA) provides a high level of vouchering assistance through the Employment Connection Business Resource Specialists.

A Specialist assigned to your area is available to handle detailed questions and assist with the paper work processing, making it easy for your business to take advantage of the Hiring Tax Credit.

Get AcrobatNOTE: The above links are PDF files. You will need Acrobat Reader to view them.If you do not have Acrobat Reader, click here to download - it's free!

 

Targeted Tax Area (TTA) Tax Forms