The Renewal Community designation was the latest tool in the City of San Diego's collection of business incentives to promote investment in and revitalization of neighborhoods and commercial areas. A Renewal Community is a geographically defined area in which businesses can claim certain federal income tax savings and other advantages to bolster economic development, stimulate job growth and create affordable housing. The Renewal Community designation became effective on January 1, 2002 and expired on December 31, 2009.
San Diego received one of 40 Renewal Community designations as part of the 2000 Community Renewal Tax Relief Act . Renewal Community neighborhoods include parts of Centre City, East Village, Little Italy, San Diego International Airport, Barrio Logan, Logan Heights, Mount Hope, Mountain View, Lincoln Park, Grant Hill, portions of Golden Hill, Chollas View, Webster and Oak Park.
The Renewal Community offers federal income tax savings to encourage businesses to locate to or expand operations within a Renewal Community and to hire Renewal Community residents. Tax incentives for businesses located within the Renewal Community include:
- Renewal Community Employment Credit (Wage Credit) - A business may claim a tax credit against federal income taxes up to $1,500 per employee during each year for all existing employees and all new employees living in the Renewal Community.
- Increased Section 179 Deduction - A business may claim an increased deduction on certain depreciable property such as equipment and machinery. The basic Section 179 expensing amount is $25,000 and qualified Renewal Community businesses may deduct an additional $35,000 in new investments.
- Commercial Revitalization Deduction - A business may deduct either one-half of the capital investment expenditures in the first year a building is placed in service, or all capital investment expenditures on a prorated basis over 10 years, instead of the usual 39-year depreciation deduction. The maximum amount subject to the accelerated depreciation is $10 million.
- Zero Percent Capital Gains Rate - The holder of a Renewal Community asset acquired between January 1, 2002, and December 31, 2009, and held for a minimum of five years may, after selling the asset, exclude any gain from federal taxation.
- Renewal Community Fact Sheet - The basics of the Renewal Community designation.
- Renewal Community Frequently Asked Questions - An extensive list of frequently asked questions relating to the Renewal Community.
- What is Not a Renewal Community? - Outlines other incentive zones available in the City.
- Renewal Community Matrix - Shows Renewal Community incentives, eligibility requirements and other special limitations.
The Renewal Community program is administered through the City of San Diego's Community and Economic Development Department. The City is dedicated to helping the region and its businesses grow and flourish. In addition to the tax incentives available to businesses within the Renewal Community, the City of San Diego has a variety of programs created to assist the expansion and retention of businesses, economic development and job creation in the City.
- Renewal Community Map - Shows Renewal Community boundaries by census track.
- Business Development and Incentive Zone Mapping System - Search by street address or assessor parcel number to find out what business incentives/zones your business may qualify for.