The Empowerment Zone (EZ) is an initiative designed to promote economic development in distressed communities by using tax incentives as catalysts for private investment. Businesses located within the Empowerment Zone are eligible to take advantage of Federal tax incentives to hire residents and to expand or improve their business operations. Increased business development within the Zone affects job opportunities for residents and improves access to goods and services, promoting long-term community revitalization.Empowerment Zone Resources
The first six urban EZ designations (Round I) were assigned in 1994 to establish incentives that would attract businesses back to inner city areas. In 1998, the EZ initiative was expanded through Round II designations to incorporate an additional fifteen zones. The Community Renewal Tax Relief Act of 2000 established a third round (Round III) of eight designated Empowerment Zones. Today, there exist 30 designated Urban Empowerment Zones, which craft unique incentive packages targeted at revitalizing America's urban areas.
On January 16, 2002, San Antonio was announced as one of eight cities throughout the country to receive a Round III Urban Empowerment Zone designation through HUD. The Empowerment Zone designation remains in effect until 2009 and will allow businesses to receive wage credits, tax incentives, and bond financing to stimulate job growth, promote economic development, and create affordable housing opportunities in targeted areas of the city.
In addition, an EZ designation provides the City priority funding in the areas of public health, education, and human services, which will give a tremendous boost to commercial and neighborhood revitalization efforts.
A new law that impacts Work Opportunity Tax Credits could create thousands of additional jobs for residents and yield additional millions of dollars in savings for employers in Empowerment Zones. Employers can now claim Work Opportunity Tax Credits (WOTCs) by hiring EZ residents up to 39 years of age.
Additionally, the new law also increases the maximum section 179 expense deduction from $400,000 to $500,000 and increases the expense deduction on tangible personal property (equipment) for small businesses from $100,000 to $125,000. RC/EZ businesses will still be able to increase their Section 179 expense deduction by an additional $35,000. Read more...