About The Enterprise Zone
San Jose's Enterprise Zone is an 18-square mile, state-designated area which provides significant tax credits and deductions to primarily small and medium sized companies located within its boundaries, and very importantly companies generating local jobs. Additional local construction incentives apply in the Enterprise Zone Target Areas.
Enterprise Zone Advantages
Sales and Use Tax Credit
Purchases of new machinery and equipment used to fabricate or manufacture a product in the Enterprise Zone can earn you a 8.25% state tax credit on your state income tax.
Manufacturers Investment Credit
Businesses may get an additional 6% investment credit (on top of the 8.25% Sales and Use Tax Credit) on qualified equipment and machinery. Total possible savings on equipment: 14.25%.
Business Expense Deduction
A deduction of up to $20,000 is available for certain property used exclusively in the Enterprise Zone.
Net Interest Deduction for Lenders
Lenders may receive a deduction from income on the amount of "net interest" earned on loans made to businesses located in the Enterprise Zone.
Hiring Credit
Businesses hiring persons eligible for social services and certain job training programs, or who live in certain areas of the City, may take an annual state tax credit of up to 50% of first year wages. Call (408) 277-3617 to learn more.
Tax Credit for Qualified Employees
Individuals employed in the Enterprise Zone earning below $16,000 are eligible for a Personal State Tax Credit similar to the federal Earned Income Credit. A federal tax credit may also be available for employees. Call (408) 536-5632 to learn more.