Under the G-TEDA programs, businesses and other entities located within targeted areas are eligible for a variety of local- and state-provided incentives. Examples of incentives commonly offered by local governments include subsidizing the cost of development, funding related infrastructure improvements, providing job training and technical assistance to local businesses, and/or establishing more streamlined processes for obtaining permits.
The state also offers a number of incentives, including tax credits, priority notification when selling state surplus lands, access to certain brownfield clean-up programs, and preferential treatment for state contracts.
Below is a chart comparing the state tax incentives offered to businesses located in a G-TEDA.
Comparison of State Tax Benefits by Targeted Area | |||||
Hiring Credit
| Longer NOL Carry- Forward Period | Sales and Use Tax Credit | Accelerated Depreciation | Lender Interest Deduction | |
---|---|---|---|---|---|
EnterpriseZone | X | X | X | X | X |
Manufacturing Enhancement Zone | X | ||||
Targeted Tax Area | X | X | X | X | |
Local Agency Military Base Recovery Area | X | X | X | X | |
Source: Legislative Analyst's Office |
Below is a chart summarizing total G-TEDA credits claimed in the 2004 through 2007 tax years.
Comparison of Total G-TEDA Credits Claimed in the 2004 to 2007 Tax Years | ||||
Total G-TEDA Credits per Tax Year | 2004 | 2005 | 2006 | 2007 |
---|---|---|---|---|
Number of Credits Claimed on Corporate Taxes | 3,256 | 4,325 | 4,851 | 5,631 |
Value of Credits Claimed on Bank and Corporate Taxes (thousands) | $218,726 | $216,416 | $230,751 | $251,591 |
Number of Credits Claimed on Personal Income Taxes | 5,054 | 8,270 | 9,973 | 15,461 |
Value of Credits Claimed on Personal Income (thousands) | $130,401 | $146,204 | $154,926 | $179,343 |
Source:Data Provided by the Franchise Tax Board |
The Franchise Tax Board (FTB) reported that in 2007 – the most current data available – $481 million in G-TEDA credits and deductions were claimed through corporate and personal income tax returns. Additionally, FTB reports hundreds of millions in carryover credits have been earned by businesses located in G-TEDAs, but they have not been claimed. Below is a chart that displays the dollar amount of G-TEDA incentives claimed through each of the tax incentives.
Clained G-TEDA Incentives 2004 to 2007 | ||||
| 2004 | 2005 | 2006 | 2007 |
---|---|---|---|---|
Hiring and Sales Tax Credit | $349,127 | $362,620 | $385,677 | $430,934 |
NOL Deductions | $72,326 | $74,024 | $126,106 | $207,993 |
Tax Impact | $5,171 | $5,966 | $11,351 | $15,807 |
Net Interest Deductions | $432,867 | $490,129 | $517,310 | $520,372 |
Tax Impact | $29,103 | $32,395 | $34,156 | $34,438 |
Business Expense Deductions | $4,387 | $4,770 | $4,463 | $5,136 |
Tax Impact | $222 | $200 | $188 | $197 |
Total Tax Impact | $383,624 | $401,181 | $431,371 | $481,376 |
Data Provided by the Franchise Tax Board 11/9/09 |