State Enterprise Zone Incentives

State Enterprise Zones (SEZ's) are administered by the State of California but allow business owners to take advantage of incentives offered by a variety of City offices as well. Incentives include tax credits and reduced parking requirements. There are two State Incentive Zones in Los Angeles: The Los Angeles Enterprise Zone and the East Los Angeles Enterprise Zone.

For Further Information about Business Incentive zones, including maps, visit the Community Economic Development Department.

SEZ Incentives offered by the CA Franchise Tax Board

  • Employer Hiring Credits
      Description : Up to $37,440 over a 5-year period per each qualified employee can be claimed by an Enterprise Zone business as a tax credit.
      Eligibility : Businesses located in a State Enterprise Zone (SEZ).
      Lead Agency : California Franchise Tax Board.
      More Info : California FTB
  • Business Expense Deduction
      Description : Qualified taxpayers may elect to expense 40% of eligible cost of a qualified property in the year it is placed in service instead of capitalizing the expense.
      Eligibility : Businesses located in a State Enterprise Zone (SEZ).
      Lead Agency : California Franchise Tax Board.
      More Info : California FTB
  • Net Interest Deduction
      Description : Qualified taxpayers are allowed to deduct net interest for qualified debts made to qualified debtors.
      Eligibility : Businesses located in a State Enterprise Zone (SEZ).
      Lead Agency : California Franchise Tax Board.
      More Info : California FTB
  • Net Operating Loss
      Description : Eligible businesses may elect to carry forward 100% of its NOL for a 15 year period.
      Eligibility : Businesses located in a State Enterprise Zone (SEZ).
      Lead Agency : California Franchise Tax Board.
      More Info : California FTB
  • Sales or Use Tax Credit
      Description : Tax credit equal to the sales and use tax paid or incurred in connection with the purchase of qualified property.
      Eligibility : Businesses located in a State Enterprise Zone (SEZ).
      Lead Agency : California Franchise Tax Board.
      More Info : California FTB

Other SEZ Incentives

  • Discounted Electricity Rate
      Description : Reduction of base electric rate over course of 60 months.
      Eligibility : Commercial and industrial customers who are newly located in a State Enterprise Zone (SEZ), Federal Empowerment Zone (FEZ), or Renewal Community (RC) are eligible for a reduction on the base electric rate. Existing customers within such zones who increase energy consumption may also be eligible for LADWP EZ Rate.
      Lead Agency : Department of Water and Power
      More Info : LADWP
  • Lower Parking Ratio
      Description : Provides reduced parking requirements for Enterprise Zone businesses compared with other areas of the City.
      Eligibility : Businesses located in a State Enterprise Zone (SEZ).
      Lead Agency : Department of Building and Safety.
      More Info : Call 3-1-1 to contact the Department of Building and Safety
  • Sewer Facility Charge Exemption
      Description : One-time lump sum payment exemption if the Sewer Facility Charge is over $17,000. The fee can be paid in installments over five years but interest is payable on any unpaid balance.
      Eligibility : Businesses located in a State Enterprise Zone (SEZ).
      Lead Agency : Bureau of Sanitation.
      More Info : Contact the Bureau of Sanitation, Financial Management Division
  • Site Plan Review Fee Waiver
      Description : Fee waiver for review of commercial or industrial architectural plans for projects of 40,000 square feet or greater located in an Enterprise Zone during an initial application for a site plan review.
      Eligibility : Businesses located in a State Enterprise Zone (SEZ).
      Lead Agency : Department of Building and Safety.
      More Info : Call 3-1-1 to contact the Department of Building and Safety