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What Is Going On With Enterprise Zone Voucher Submission Deadlines?

As we approach June, one Enterprise Zone (Delano) has already stopped accepting voucher applications, and two major zones (San Francisco and San Jose) plan to stop by June 30th. Last year, AB 106 extended the deadline for taxpayers to apply for hiring credit vouchers until the end of 2014. However, that bill also set the deadline for a zone to process and issue decisions for those applications on the same day, thus setting up a situation in which each zone has to figure out its own deadline for submissions in order to be able to complete their processes by December 31st.

HCD has published a list of anticipated closure dates on its website.

FTB has made it clear that their policy is that a taxpayer must have a voucher issued by a zone in order to claim a tax credit, even if they posses all of the necessary documentary proof that the employee qualifies.

On May 7, HCD published Management Memo 14-02 outlining a new policy by which zones can appoint another zone as a third-party to take on their vouchering. This might occur either where a zone has more volume they can process in the time allowed, or if a zone needs to cease operating before the end of the year for other reasons. The memo explains:

In its enabling legislation, the state legislature extended the application deadline for hires made on or before December 31, 2013, so that all taxpayers would have an ample opportunity to apply for and receive vouchers. It is therefore necessary that all taxpayers are allowed the same length of time to exercise this opportunity whether or not their particular zone has decided to continue support of this activity.

Then, on May 28, HCD distributed an application to zones interested in acting as third-party voucher agencies. They have set a deadline of June 6 for those applications and will presumably begin the process of shifting vouchering activity from the closing zones to those zones who respond to the program. However, even with the implementation of this plan, there will inevitably be some, as of yet unknown, deadline for submitting vouchers in order for them to be processed by December 31.

Assemblyman Daly has introduced AB 2517 to remove the uncertainty created by AB 106 and provide the equal opportunity to taxpayers to apply for those vouchers. The bill would maintain the 12/31/2014 deadline for submitting vouchers, but would give the zones the ability to complete their review process for another year. The bill passed the Assembly on May 19th 75-0 and now goes to the Senate Governance and Finance Committee.

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