HUD Archives: News Releases

HUD No. 03-061
Brian Sullivan
(202) 708-0685 ext. 7527
For Release
May 13, 2003

Empowerment Zone to save millions and boost jobs

TUCSON, AZ - Business owners that set up shop or remain within Tucson's new Empowerment Zone stand to save thousands, even millions of dollars to help grow their businesses, boost employment and promote economic development. That was the message Housing and Urban Development Assistant Secretary Roy Bernardi delivered to hundreds of Tucson-area businesses today.

Joined by a team of nationally recognized economists and tax experts, Bernardi explained the Bush Administration's plan to revitalize Tucson, Pima County and South Tucson.

"The message is clear - it's good business to do business in this Empowerment Zone," said Bernardi. "Small and large businesses alike have a tremendous opportunity to expand their operations, hire more workers AND save money!"

Last year, HUD designated Tucson among eight new Empowerment Zones qualifying businesses in these areas to share in an estimated $17 billion in tax incentives to promote economic development, create affordable housing and expand job opportunities. Empowerment Zones encourage public-private partnerships that generate economic development in some of the nation's most distressed urban communities. To learn more about HUD's Empowerment Zone program, visit

By taking advantage of an attractive package of tax credits, deductions, bond financing and capital gains
exclusions, business owners can spend more money expanding their operations and less on their annual taxes. 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, thereby improving employment and the general economic climate within Tucson'
Empowerment Zone.

Businesses that remain or locate within Tucson's Empowerment Zone (including parts of Pima County and South Tucson) can enjoy significant tax savings in the following ways:

Tax Credits

  • Wage credits are especially attractive to businesses looking to grow. These businesses are able to hire and retain Zone residents and apply the credits against their federal tax liability. Businesses located within
    Tucson's Empowerment Zone will enjoy up to a $3,000 credit for every newly hired or existing employee who
    lives in the EZ - each year!
  • Work Opportunity Credits provide businesses up to $2,400 against their Federal tax liability for each
    employee hired from groups with traditionally high unemployment rates or other special employment needs,
    including youth who live in Tucson's Empowerment Zone.
  • Welfare to Work Credits offer businesses a credit of up to $3,500 (in the first year of employment) and
    $5,000 (in the second year) for each newly hired long-term welfare recipient.

Bond Financing

  • Tax-Exempt Facility Bonds help Empowerment Zone businesses to receive lower-cost loans to finance
    property, purchase equipment and develop business sites within these communities.
  • Qualified Zone Academy Bonds allow state and local governments to match no-interest loans with private funding sources to finance public school renovations and programs.

Capital Gains

  • Businesses located within Tucson's Empowerment Zone can postpone or only partially recognize the gain
    on the sale of certain assets, including stock and partnership interests. This benefit significantly reduces
    the capital gains tax liability on businesses located within these designated areas.

Tax Deductions

  • Under Section 179 of the tax code, eligible businesses located within Tucson's EZ may deduct up to a total
    of $60,000 each year for depreciable property such as equipment and machinery acquired after December
    31, 2001.
  • Environmental Cleanup Cost Deductions allow businesses to deduct qualified cleanup costs in Brownfields.

Other Incentives

Like all distressed communities, Tucson will also be able to take advantage of the New Markets Tax Credits that provide investors with an annual credit against their federal taxes of five-to-six percent of the amount invested in
a distressed area. Also available is the Low-Income Housing Tax Credit providing credits allocated by the State of Arizona against Federal taxes for owners of newly constructed or renovated affordable rental housing.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, 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.


Content Archived: March 11, 2011