Are Enterprise Zones

Brent Mccoy
• Sunday, 27 December, 2020
• 7 min read

An enterprise zone is a geographic area that has been granted special tax breaks, regulatory exemptions, or other public assistance in order to encourage private economic development and job creation. Enterprise zones were introduced in the U.S. in the 1970s in an effort to reverse the flight of people and businesses from city centers to the suburbs.

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Enterprise zones are geographic regions that are granted special status by a government in order to encourage development and economic growth. The zones may be granted favorable tax rates, regulatory exemptions, or other incentives to encourage businesses to stay in the area or locate in it.

Enterprise zones are often established in neighborhoods that have experienced a decline in essential businesses or quality housing, or both. The incentives may be customized to entice a particular industry sector or company to the area with the hopes of creating jobs, boosting tax revenues, and increasing economic activity.

The businesses also can get tax savings for hiring new staff and undertaking capital improvement projects. Mainstream economists agree that China's special economic zone (SEZ) helped liberalize business in the communist state.

Opponents of the concept argue that its success stories would have happened anyway without costly government intervention. The original intent of most EZ programs was to encourage businesses to stay, locate, or expand in depressed areas and thereby help to revitalize them.

However, the federal program varies in two important ways: it includes substantial amounts of training funds and other monies for social services to help targeted workers with family needs outside the workplace; and it requires community participation. State law sets out the criteria an area must meet to be designated an enterprise zone.

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In order to qualify as an enterprise zone, an area typically has to meet a state's definition of distress or blight, usually defined as having a relatively high rate of unemployment and/or job loss. Many states require companies to meet performance standards to qualify for zone incentives.

Some states mandate that to collect credits, a certain percentage of the company's new hires must be zone residents and/or be paid above a certain wage. Some encourage companies to hire “disadvantaged” workers and provide tax credits in return.

In some states, local zone administrators are given discretion over the choice of benefits offered, while in others only state-level incentives may be provided. State enterprise zones have been studied extensively by academic researchers, other evaluators, and by government agencies such as the General Accounting Office.

Another criticism of enterprise zone programs is that they are not targeted enough to help distressed areas attract investment. Rather than targeting the neediest neighborhoods and encouraging new investment, the designation of the zone's geography often involves political favoritism and gives subsidy windfalls to companies that were already there.

Most states provide detailed information on enterprise zones on their websites, including criteria for eligibility, benefits offered, and relevant statutes. State enterprise zones generally require a public review process at the time they are created.

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Before a zone may be designated, a local government must submit an application to a state development agency. In some states, there must be a notice and a public hearing, followed by adoption of a local ordinance before the application can be submitted.

The state agency then determines if the area meets the criteria laid out in the enterprise zone law. Facts about some subsidies, including local tax abatement, direct loans, or industrial revenue bonds from a municipal or state entity, are part of the public record.

Records about federal and state tax credits are not usually available to the public unless voluntarily reported by the company. First, cities apply to the federal government for EZ/EC designation by submitting information about their economic condition and how they would use the money.

Information may be obtained by requesting the Memorandum of Agreement between HUD and the designated area, and the Benchmarks and Activities Form, which lays out specific targets for the first two years of the program. Third, companies that are located in or move into EZ/EC areas apply to the relevant local, state or federal agencies for the available subsidies (e.g., property tax abatement, state investment tax credits, federal ROTC, etc.).

Enterprise zones exempt businesses from local property taxes on new investments for a specified amount of time, which varies among different zone programs. Sponsored by city, port, county, or tribal governments, an enterprise zone typically serves as a focal point for local development efforts.

enterprise zones nov
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There are currently 74 enterprise zones creating better opportunities for business investment across Oregon: 57 rural and 17 urban. Local governments are responsible for creating, amending, managing, and renewing most of these zones, until June 30, 2025.

The Florida Enterprise Zone Act is scheduled to sunset (expire) on December 15, 2015. Florida Association of Counties put together this background in order to support the process of renewing EnterpriseZones this legislative session.

Visit the FAC website for PDF downloads of documents related to the reauthorization of EnterpriseZones. The legislation proposes several technical and policy changes to the current Florida Enterprise Zone Act including an extension of the expiration date until 2025.

Corporate income tax credits are available to businesses that construct or expand their facilities in an enterprise zone. Businesses located in a zone, that collect and pay Florida sales and use tax, are allowed a monthly credit against their sales tax due on wages paid to new employees who have been employed for at least three months and are residents of a Florida enterprise zone or a rural county.

Businesses located in a zone that pay Florida Corporate Income Tax are allowed a corporate income tax credit for wages paid to new employees who have been employed for at least three months and are residents of a Florida enterprise zone or a rural county. A refund is available for sales taxes paid on the purchase of building materials used to rehabilitate real property located in a zone.

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Effective July 1, 2010, condominium projects are no longer eligible for a sales tax refund. A 50 percent sales tax exemption is available to qualified businesses located in a zone on the purchase of electrical energy.

An exemption of ad valor em property tax for childcare facilities operating in an enterprise zone. The child care facility must be owned and operated by the property owner as well as meet the requirements of s. 402.302, F.S.

Please consult the Association of Indiana EnterpriseZones webpage for a list of current enterprise zones, and contact the local urban enterprise association where your business is located to verify whether a specific address is located in the enterprise zone. During the 2018 legislative session, the General Assembly passed a bill shifting administrative responsibilities for the program from the Indiana Economic Development Corporation (IEC) to the local enterprise zone associations.

Beginning on January 1, 2019, each zone business must now file an annual registration with its local Urban Enterprise Association (SEA) to claim tax savings and stay in good standing. Please consult the member directory on the Association of Indiana EnterpriseZones webpage to find the contact for each SEA.

COVID-19 has had an obvious impact on all of our lives and business operations, including work at the Department of Commerce and Economic Opportunity as well. Recognizing this impact, DCE will be extending the deadlines for companies required to submit Corporate Accountability reports.

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Exemption on retailers’ occupation tax paid on building materials Expanded state sales tax exemptions on purchases of personal property used or consumed in the manufacturing process or in the operation of a pollution control facility An exemption on the state utility tax for electricity and natural gas An exemption on the Illinois Commerce Commission’s administrative charge and telecommunication excise tax Exemptions are available for companies that make minimum statutory investments that either create or retain a certain number of jobs.

These exemptions require a business to make application to, and be certified by, the Illinois Department of Commerce. Prior to his tenure at Zones, Mali was the founder, president, and CEO of Kits Cameras, Inc., which he built into a chain of 225 stores across the U.S. and Canada.

In this role, Hillock leads the company's Partner and Product Management (PPM), Marketing, Operations, and Supply Chain, along with Logistics, Integration, Technology Solution Centers, and Service Delivery divisions. In this role, he is responsible for driving innovation and collaboration across the company's partner ecosystem, increasing operational and supply chain efficiency, optimizing costs, elevating the Zones brand, and strengthening global service delivery for Zones clients, with an overarching mission of enabling industry-leading customer experiences and client satisfaction.

Hillock leverages broad industry experience gained at USED International, Tech Data, and Computer Systems, where he led a progression of sales management, strategic marketing, and global supply chain organizations. As CIO, Jinan oversees the company's global IT strategy and systems supporting all e-commerce, finance, sales, operations, and cost reduction initiatives through automation.

Ronald McFadden has been part of the Zones senior team since 1998, leading Corporate Finance, Human Resources and Business and Legal affairs. Sean Hob day was named Senior Vice President in January 2012 to lead the company's global expansion efforts in Europe, the Middle East, Africa, Latin America, Asia-Pacific, India and Canada.

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Prior to his time at Zones, Hob day served as managing director of Blue Ice Leisure in Sydney, Australia, an Austral-Asian division of First Team Sports. Vent brings over 30 years of experience in sales, operations, service delivery, business transformation, and program management to Zones.

Prior to joining Zones, Vent served as Corporate Vice President, GM & Industry Group Head, at Hewlett Packard Enterprise (now DEC Technology), where he was responsible for a large portfolio across all services. Previously, he has also held senior executive leadership roles at Cognizant, Capgemini, and Infosys, leading large industry groups and service delivery units/practices.

Vent has proven his ability to manage and drive transformational global service delivery and new business models across multiple vertical industries. As the CDO, he is responsible for developing overall digital strategy and driving enterprise -wide transformation of Zones business model and service offerings.

In these roles, AFUB has proven his expertise in the world of IT, digital strategy, and artificial intelligence, which led to his being named one of the Premier 100 IT Leaders by Computer world Magazine in 2013.

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