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More Merced area businesses to reap benefits of expanded enterprise zone

POSTED September 18, 2010 12:08 a.m.

The job-producing Merced Regional Enterprise Zone grew by 1,877 acres this week, following California State Department of Housing and Community Development approval.

The enterprise zone, now comprised of 44,608 acres spread across Merced County, is intended to benefit businesses within the zone by offering tax benefits.

“I’m pleased to see that more businesses in Merced County will now be eligible to receive state tax benefits,” stated Mark Hendrickson, director of Merced County’s Department of Commerce Aviation and Economic Development. “In challenging times like these, economic incentives help our local businesses retain and create jobs.”

About 95 percent of the 1,877 new acres are filled with existing businesses, while much of the remainder is comprised of undeveloped but planned business parks in Gustine and Atwater.

According to MREZ Manager Dave Heyer, the expansion was precipitated by a number of existing businesses who heard about the enterprise zone, but that were not included in the initial zone. Those businesses requested the area be expanded so they could receive the associated tax benefits, and in the process the MREZ elected to pursue a larger expansion.

The expansion contains a number of businesses which were not notified about the enterprise zone before this week’s HCD approval, but so far the new enterprise zone inhabitants have been pleasantly surprised by the associated tax benefits, according to Heyer.

“They’re very excited about it, very happy about it,” he said.

Chief among those benefits, businesses within the enterprise zone can earn $37,440 or more in state tax credits for each qualifying employee hired. The tax credits help to encourage the creation and retention of jobs, including 5,490 jobs in Merced County since the enterprise zone’s 2006 establishment, according to the MREZ.

Businesses also receive other tax benefits, including sales tax credits of $20 million per year on machinery, up-front expensing of depreciable property, and 100 percent net operating loss carryover for up to 15 years. Enterprise zone companies also receive preference points on state contracts.

The MREZ will likely expand again in the future, though no set date for expansion is set.

For more information about the MREZ, or to determine eligibility for enterprise zone benefits, contact MREZ Manager Dave Heyer at 724-2027.

To contact Alex Cantatore, e-mail or call 634-9141 ext. 2005.

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