An Enterprise Zone is a defined geographic area in which businesses can claim certain state income tax savings and other advantages. Enterprise Zones were created in California to stimulate business investments in areas that are economically disadvantage and to spur job growth in area of high unemployment.
Businesses that operate in an Enterprise Zone (EZ) can claim tax credits for employee wages and manufacturing equipment purchases. Businesses are also offered job referral services, development permit expediting and assistance, tax savings on loans, reductions on certain development fees, and access to specialized technical and financial assistance programs. San Diego’s Regional Enterprise Zone is located throughout the City of San Diego including communities in the South Bay area near the U.S.-Mexico border and in portions of the cities of National City and Chula Vista . A special enterprise zone is also located at the Naval Training Center Redevelopment Project Area, which includes Liberty Station, near Downtown.
Enterprise Zone Incentives
California Income Tax and Other Benefits:
- Hiring Tax Credits may be claimed on up to half the wages paid to qualified new employees.
- Tax credits may be claimed for sales taxes paid on equipment purchased for manufacturing or production purposes.
- All net operating losses may be carried forward as a deduction in future years.
- Business equipment depreciation can be accelerated, up to a limited amount.
- Low-income employees can claim their own personal income tax credits.
- The state will give priority for Industrial Development Bond applications.
- Lenders (both commercial and private) may deduct net interest income on loans to Enterprise Zone businesses.
More information on California Enterprise Zone benefits is provided by the California Housing and Community Development Department.
City of San Diego Benefits:
- The Enterprise Zone Job Referral Service will assist with recruitment and pre-screening for new employees at no cost and will provide the necessary verification for you to claim tax credits on their wages.
- City staff can expedite permit applications and serve as liaison with other City departments.
- Certain development fees may be reduced or waived.
- New development projects located in the City's Enterprise Zones are eligible for direct assistance by the City. Assistance includes help in determining project application requirements, fast track permit processing, liaison help in the development process.
- The City can provide an exemption from urban impact fees and housing trust fund fees.
Enterprise Zone Locations
- The City of San Diego was originally home to two different Enterprise Zones: the Metropolitan Enterprise Zone and the South Bay Enterprise Zone. In 2006, the two zones were merged and then enlarged to become the San Diego Regional Enterprise Zone. It includes portions of San Diego in the Second, Third, Fourth, Seventh and Eighth Council Districts, as well as parts of the City of Chula Vista and National City. Portions overlap with the City's Foreign-Trade Zone and a Recycling Market Development Zone, which offer other benefits.
- A "special enterprise zone" is located at the Naval Training Center and provides advantages similar to other Enterprise Zones, though specific eligibility criteria and benefits may differ. Businesses of all types that are located within a Local Area Military Base Recovery Area (LAMBRA) are eligible.
For more specific information, please see:
- San Diego Regional Enterprise Zone Fact Sheet (PDF)
- San Diego Regional Enterprise Zone Sites Map (PDF) - NOTE: Please use the Zoom feature of your PDF reader to enlarge/reduce the view of the map.
- Business Development and Incentive Zone Mapping System
- San Diego Regional Enterprise Zone
- Targeted Employment Area Map (TEA) Effective January 1, 2013 (PDF) - NOTE: Please use the Zoom feature of your PDF reader to enlarge/reduce the view of the map.