(305) 536-5678 ext. 2254
March 24, 2004
HUD OFFERS TO SAVE COMMUNITIES MILLIONS IN TAXES
Tax tips could save large and small businesses in Miami-Dade
millions of dollars a year
MIAMI - April 15th is just around the corner and thousands of
businesses around the country will be paying too much money to Uncle
Sam, unaware of the tax savings that are available to them. The
Department of Housing and Urban Development is hoping to change
that with the release of a series of tax tips that will help cut
the tax burden of businesses located in certain federally designated
Miami-Dade was one of fifteen Empowerment Zones designated nationally in January 1999. This designation helps
local businesses to provide more jobs and promote community revitalization through a series of tax incentives. Further, each incentive is tailored to meet the particular needs of a business and offers a significant inducement for companies to locate and hire additional workers.
For example, a grocery store owner who hires an employee who lives in Miami-Dade's Empowerment Zone can take
up to $3,000 off his taxes. The owners of a landscaping company who plan to hire just one summer worker who
lives in Miami-Dade's EZ can cut their tax bill by as much as $1,200. These are just two examples of dozens of tax tips HUD is aggressively promoting to small and large businesses alike as the federal tax filing deadline approaches.
"I don't know of a single business owner who wouldn't leap at the opportunity to keep their hard earned money in
their pockets instead of sending it to Washington," said HUD Assistant Secretary Roy A. Bernardi. "These tax tips
not only point to the advantages of doing business in these areas, but will help business owners save money."
Since 2002, an estimated $11 billion in expanded tax benefits has
been offered exclusively to businesses located in
80 Empowerment Zones and Renewal Communities, including Miami-Dade. In addition, $15 billion in New Market Tax Incentives are available to further generate economic growth in these distressed communities. HUD's advice to businesses located in these areas demonstrates how spending a little time on a computer could reduce their federal tax liability and help a company's bottom line.
Through tax credits, deductions, bond financing and capital gains discounts, businesses are encouraged to locate their operations in these distressed areas and to stimulate job growth in the process.
For specific information about Miami-Dade's Empowerment Zone, please contact Mr. Bryan K. Finnie at Miami-Dade Empowerment Trust, Inc.
140 W. Flagler St., Suite 1107
Miami, FL 33130
Phone: (305) 372-7220
Fax: (305) 372-7629
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as
well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.
IMPORTANT 2004 TAX TIPS
1. A little time on the computer can reduce your federal tax liability
and help a company's bottom line. Just log on
to the address locator at www.hud.gov/crlocator to see if your business is located in an Empowerment Zone.
Review your employee roster to see if you have employees that live in the Empowerment Zone. From 2002-2009,
your business could earn a yearly wage tax credit of up to $3,000 for every employee that lives in an Empowerment Zone.
2. Personal property that you purchased last year and use in an Empowerment Zone can be expensed, resulting in
an additional $35,000 in deductions each year from 2002-2009, through Increased Section 179 deductions.
3. Plan ahead for this summer. Your business can receive up to $1,200 in Work Opportunity Tax Credits (WOTCs)
if you hire youth from an Empowerment Zone between May 1 and September 15. While Congress has not yet
extended the WOTC beyond 2003, we are confident that it will do this soon.
4. If you have entry-level jobs, you can take up to $2,400 in WOTCs for each 18 to 24 year-old employee you hire from the Empowerment Zone. It does not matter where the employee works for you, but you will need to obtain a certification that the employee qualifies from the State Employment Services Agency (SESA).
5. You can increase the wage credit available to you by targeting your employee recruitment to residents of
housing developments located in the Empowerment Zone. These residents can qualify the business for the Empowerment Zone Wage Credit or the WOTC.
6. Low-interest financing is available for businesses located in an Empowerment Zone. The financing is accomplished through a tax-exempt bond offered by a State or local government. Contact the Empowerment Zone organization of your municipal government to find out if you qualify to use this benefit to relocate or expand your business in the Empowerment Zone.
7. Contact the State Employment Services Agency (SESA) to find
employees who will qualify your business for a WOTC. The SESA can
certify the employees for your tax records and can help with your
specialized training needs.
8. If you are a small business corporation located in an Empowerment Zone, you may be able to offer stockholders
a 60% exclusion of capital gains on new stock you offer to expand or set up business in the Empowerment Zone.
9. If you are looking to reduce your capital gains tax, you can exclude 60% of the gain on the sale of stock in a
small business corporation located in an Empowerment Zone.
10. If you assign employees to provide construction work, security, lawn care, or similar services in specific areas
of your community, you may be able to claim an Empowerment Zone wage credit. The credit is available for any employee who lives and works in the Empowerment Zone, regardless of the location of the business's headquarters. The credit can be calculated for the pay periods the employee worked in the Empowerment Zone. This credit began
in 2002 and is available through 2009.
11. Leverage your tax credits by reviewing State tax laws to significantly reduce your taxes. In many cases, tax incentives may be available for businesses located in State or local enterprise communities.
12. To find more information on Empowerment Zone tax incentives and to obtain a free copy of the publication,
"Tax Incentive Guide for Businesses in the Renewal Communities, Empowerment Zones and Enterprise
Communities", call (800) 998-9999.
NEW MARKETS TAX CREDIT
- If you can benefit from a loan with more favorable terms for
capital or working capital needs, visit www.cdfifund.gov
to find the investor groups that are making loans to or equity
investments in qualified businesses in low-income communities
across the nation.
- If you are looking to invest in commercial real estate, you
can earn an immediate federal tax credit for
investing in a partnership or corporation that has an allocation of the "New Markets Tax Credit." An investor
can earn credits over seven 7 years equal to 39% of the amount invested.