A statewide program that offered tax incentives to Merced County businesses who hired certain employees within a designated area was eliminated last year, but county officials say there’s still time to take advantage of its tax credits.
The Merced Regional Enterprise Zone program gave businesses located in the zone a tax credit when they hired people with certain barriers to employment. These include disabled workers, those living in targeted areas, unemployed veterans, released convicts or those receiving public assistance.
Although the program was cut Dec. 31, officials said businesses have until the end of this year to get credits for qualified workers hired before then. Businesses can also amend their tax returns for the past three years to use the credits.
The tax credits earned from hiring qualified workers before Dec. 31, can be used for the next 10 years, said David Heyer, Merced County’s enterprise zone manager.
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“Unfortunately, they decided to eliminate the program,” Heyer said. “While our businesses are disappointed they lost this opportunity, they can still take advantage of the tax credits.”
Heyer said the program has benefited about 730 businesses and created 3,419 new jobs since December 2006. On average, businesses reported receiving a tax credit up to $37,440 for one employee over the span of five years.
“What’s good about the Enterprise Zone program is it helps small businesses as well as large ones,” Heyer said, noting the credit can offset or potentially eliminate the state tax liability for many businesses.
In Merced County, the enterprise zone spans 46,105 acres covering the six cities and all unincorporated communities. Not included are the county’s farmland, wetlands and foothills. Last year, the enterprise zone expanded to include an additional half-acre of Los Banos as well as 1,266 acres of Madera County and some parts of Merced.
The expansion into Los Banos included a landscaping company whose owner said he’s been trying to take advantage of the program for about 20 of his employees.
“We had a hard time trying to get involved in the enterprise program, but we finally did it, and we haven’t been able to use it yet,” said Ronny Navarro, owner of Ronny’s Landscaping. “I have a friend of mine that got quite a bit of money. During the time the program was active, I didn’t take advantage.”
Jennifer Krumm, chief operating officer of the Greater Merced Chamber of Commerce, said she believes the Enterprise Zone program offered an incentive for businesses to open or expand in Merced County.
“I am very sad to see it go,” Krumm said. “It’s going to affect a lot of people. I hope that they can find a way to bring it back.”
As an example, Krumm pointed to a seasonal packaging company that was able to operate year-round because of the tax credits.
“Normal seasonal employees became full-time employees, and they were able to hire more people,” she said. “It also gave us some bargaining tools for businesses that were coming from out of state and were looking for tax incentives to open in Merced.”
Business officials with questions about the program or how to take advantage of the credits should contact Heyer at (209) 761-3827 or DHeyer@co.merced.ca.us.