California's enterprise zones are among the most attractive location spots in the nation. The program was first launched in 1984 to stimulate business investment in depressed areas of the state. Now, with a major recession at hand, enterprise zones are emerging as the location of choice for many companies. There are 42 zones throughout the state, each offering local and special incentives to businesses within their boundaries.
"California's credit that technically offsets employee wages over a five-year period is without a doubt the largest in the country," says Gary Smith, vice president of Portfolio Management at Walton Management Services, an Ocean, N.J.-based tax incentive portfolio management firm. "California doesn't limit the credit to companies that are expanding or relocating. If you started hiring employees in a California enterprise zone last year, you retroactively get employees certified and track their wages moving into the future. This gives companies a reason to stay in California."
Specifically, companies can get a $35,000 credit per employee over a five-year period. The allowance is for 50 percent of the employee's wages the first year, 40 percent the second year, and 30, 20 and 10 percent over the remaining three years. As Smith sees it, California's enterprise zones offer the best deal in the country - hands down. "No other state offers job tax credits across the board," he says. "Any industry, whether it's manufacturing, retail, wholesale, distribution, or some other, can get in on these credits."