Jim Zauher, the Economic Development Director for the city of Redding, makes the case for business participation in the Enterprise Zone in the Redding Record-Searchlight:

In 2006, I wrote about how excited C.R. Gibb’s restaurant owner Ed Rullman was about the new enterprise zone designation. Ed was no doubt pleased because he and his partners had been able to take advantage of more than $500,000 of state tax credits over several years as a result of their business being within the boundaries of the first enterprise zone, established in 1991.

That original enterprise zone had expired, but the local governments, the Economic Development Corporation and SMART Resource Center got together again and won a new 15-year designation that began in 2006.

Ed allowed me to use the personal tax credit information as a way to highlight to other businesses the significant potential value of enterprise zone benefits.

During these difficult financial times for most businesses, I thought it would be a good time to prime the pump again about enterprise zone tax credits, because I am finding that nearly half of the companies I am surveying through the city of Redding Retention and Expansion Program are not taking advantage of the enterprise zone.

Over the years there have been several papers and studies suggesting the ineffectiveness of enterprise zones.

A 2006 study led to changes in the program, but the fact is that the California Enterprise Zone Program is the only mechanism that the state has in place that rewards companies for new capital investment and job creation. Almost all of our competing states such as Oregon have similar programs and even stronger incentives.

Since the new designation, Nov. 3, 2006, the Economic Development Corporation of Shasta County, partnering with the ShastaBiz collaborative, has put on numerous free business seminars providing information about the benefits of the enterprise zone. Over the years, there have been fliers mailed directly to businesses, inserts in the Record Searchlight and numerous other efforts including the free seminars, but with all of the effort there are still large numbers of businesses not taking advantage.

The irony of this is that California has one of the highest corporate tax rates in the United States and many times I hear complaints about how much of a struggle it is for small companies today to make a profit. Tax credits for qualifying equipment and employees come right off the bottom line of the tax liability, essentially turning those taxes right back into company profits. There seems to be a lot of money being left on the table.

At a meeting recently held at City Hall with Redding manufacturers that had been surveyed, Naomi Torato from Site Manufacturing provided a passionate testimonial about the value of the benefits to her company, saying that when they moved from the Bay area, it made the difference in their mind when comparing to other states that had lower taxes.

So, why are some companies taking advantage of this great program and others not? In my mind, it’s not for lack of information, since every marketing tactic to date has been used. It might be that the sheer size of our enterprise zone makes the non-users stand out more. Most zones are relatively small geographic areas, especially in the urban settings.

The Shasta Metro Enterprise Zone, however, comprises parts of all four of the jurisdictions that are partners and extends along the I-5 corridor south from Mountain Gate all the way to Cottonwood.

Nearly 5,000 businesses occupy commercial and industrial space within the boundaries of the Shasta Metro Enterprise Zone.

The other irony about the California Enterprise Zone Program is that it is actually quite easy to understand and to use.

But sometimes people make assumptions without checking the program out thoroughly.

I had one owner tell me that he decided not to take advantage of the enterprise zone because he was told “they” would be coming in and looking at his books. When I asked who “they” were, he couldn’t say.

The reality is that once a business and/or its tax preparer determines that it has qualifying equipment (computers and fax machines qualify as well as processing equipment) or employees, the tax credits are taken as part of the normal tax preparation.

There is no oversight of the process. A voucher is required as back-up documentation for the qualified employee credits.

Businesses interested in finding out about enterprise zone tax credits have a multitude of options available to them.

The city of Redding has a large enterprise zone map, address ranges and brochures available at the permit center located on the first floor at City Hall. The city also has a link from its Economic Development Web page to the Shasta EDC Web site, which is www.shastaedc.org. All sorts of information, including state forms and guidelines, are available on this site.

In addition, any interested businesses that would like more information can call me directly at 225-4083 or Michele Petersen at the EDC at 224-4920.

If you would like to know more about how to determine if recently hired or future employees will qualify you for the employee tax credits you can call Bonnie Westlake at the SMART Resource Center at 245-1519.

Small businesses or large businesses can take advantage of the benefits of the enterprise zone program.

In these tough times, especially, every little bit helps.