Zone businesses that purchase production machinery, renewable energy or pollution control apparatus, computer or communications equipment or certain motion picture related equipment may reduce their California tax liability by an amount equivalent to the sales or use tax paid on the qualifying property.

In any year, individuals may claim credits on the first $1 million of qualifying purchases. Corporations may claim credits on up to $20 million each year. At 8.25%, that represents up to $1.65 million in credits each year.

This credit may be claimed in addition to the 6% Manufacturer's Investment Credit (MIC) your business may also be qualified to receive.

Machinery must be used exclusively within the Zone and must be purchased and put into use before January of 2012. If you purchase from an out-of-state supplier you must certify that a comparable purchase could not have been made from a California-based supplier.

Other limitations and record keeping requirements apply. For complete details refer to the Franchise Tax Board's Enterprise Zone Guidelines (FTB 3805Z) or contact your tax advisor.

The Zone would be happy to work up pro forma figures on your business' or company's potential savings. Give us a call or send us a request and we'll show you just how much you could save!

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