Empowerment Zones and Enterprise Communities

About Empowerment Zones and Enterprise Communities:

new economic entities to be designated during 1994 and 1995; empowerment zones are eligible for greater tax incentives than enterprise communities. The Secretaries of Housing and Urban Development, Interior, and Agriculture may each designate a certain number. To be eligible, an area must have a condition of pervasive poverty, unemployment, and economic distress. Criteria also cover the population, size, area, and poverty level.

An employer may gain a 20% wage credit against annual income tax liability for up to the first $15,000 of wages paid to an employee who lives and works in an empowerment zone. The credit may offset up to 25% of the employer's alternative minimum tax liability.

The Section 179 deduction is increased to $20,000 for enterprise community property. Such property must be acquired after zone designation, have a use that begins in the zone, and be used mosdy in the zone.

Tax-exempt financing, up to $3 million for each qualified enterprise zone business and $20 million for all zones and communities, will be allowed for qualified zone properties.

See the entries Income Tax and State Income Tax in the American Encyclopedia of Law.