Enterprise Zones Can Stimulate Job Creation, Provide Incentives

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Action by the board of supervisors Tuesday may save Gila County's status as one of Arizona's 22 Enterprise Zones in a program designed by the Arizona Department of Commerce to encourage job creation and provide an incentive for new and expanding businesses.

"It was approved at the meeting to submit the application to the state of Arizona," said Gila County Finance Director John Nelson.

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Within Arizona's 22 "enterprise zones" Gila County among them businesses can claim many benefits and incentives, including an income tax credit for new jobs created if those jobs meet certain wage and benefit criteria, and 35 percent of the employees in those positions live in the zone. The program was created by the Arizona Department of Commerce.

"It's not guaranteed that they will approve it, but the application will be sent in."

According to information provided by the department of commerce, which administers the program within the state, companies located in a state Enterprise Zone can claim up to $3,000 in credits on their Arizona corporate income tax by creating new quality jobs.

Small manufacturing businesses may qualify for an 80 percent reduction in their primary property tax by investing in new buildings, equipment or property.

A business located in an enterprise zone can claim an income tax credit for new jobs created if those jobs meet certain wage and benefit criteria, and 35 percent of the employees in those positions live in an enterprise zone.

Gila County's current enterprise zone program "was very influential in getting the Doorstop into the area," Nelson said, referring to the cabinet-door manufacturer that recently broke ground near the Payson airport.

"This program was started and brought to the legislature by the (department of commerce) to help economic development in some of the areas that have high unemployment and need new industries," Nelson said. "The program will help with economic development in this area, and bring in some high-paying jobs like the Doorstop did."

Scott Flake, director of the Payson Regional Economic Development Corporation, agreed.

"We have few incentives that we can offer businesses, other than our wonderful quality of life," Flake said. "If it were not for that program, the Doorstop would probably not be beginning construction in Payson. This is a real key to our economic development; for bringing new businesses in, and for bringing in new jobs."

The benefits

To qualify for the enterprise zone program, employers must pay at least half of the health benefits for full-time workers, and pay wages of at least the Job Service average wage offer for the county. Employers can deduct 25 percent of taxable wages, up to $500 per employee, in the first year of employment. In the second year, they can deduct 33 percent or up to $1,000 per employee, and in the third year, they can deduct 50 percent or up to $1,500 per employee.

For small manufacturers with less than 100 employees, or less than $4 million in gross receipts, significant property tax abatements apply in enterprise zones. If a business invests at least $2 million in fixed assets, all their real and personal property is assessed using a ratio of 5 percent for five years, instead of the usual 25 percent. This incentive also is available to minority and women-owned businesses in enterprise zones.

The enterprise zone program provides significant tax benefits to new and expanding businesses, as well as helping to improve conditions in economically disadvantaged areas.

If Gila County approves the proposed enterprise zone, other services will be offered to participating employers including a directory for new businesses, referral to job training services and clearinghouse services for new business prospects.

The Gila County Board of Supervisors would serve as the enterprise zone commission, overseeing the program, and approve applications for zone benefits from qualifying employers.

Anyone with questions regarding the proposed Gila County enterprise zone program may contact Mary Anne Moreno, executive director, Globe-Miami Regional Chamber of Commerce and Economic Development Corporation at (928) 425-4495.

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