DEPART PARTMENT MENT OF OF BUSINESS, INESS, ECONOMIC ONOMIC - PowerPoint PPT Presentation

DEPART PARTMENT MENT OF OF BUSINESS, INESS, ECONOMIC ONOMIC DEVELOPMENT VELOPMENT & & TOU OURISM RISM ENTERPRISE SE ZO ZONES S PARTNERSH SHIP Mark J. Ritchi tchie, , Bran anch ch Chief hief Wayne yne Thom hom, Manager anager Enterpr terprise ise Zon ones es Partner nersh ship ip Program ram

PROGRAM PURPOSE  Job creation  Stimulate certain kinds of business/industry development in economically depressed areas

PROCESS  State provides excise and income tax incentives*.  Counties nominate zones for Governor’s approval, help market and provide incentives.  Eligible businesses enroll and qualify annually by meeting goals.

ST STATE BEN ENEF EFITS TS 100% exemption from the General Excise Tax (GET) and Use Tax every year.  (The GET exemption applies only to gross revenues from EZ eligible business categories within an EZ. An 80% reduction of state income tax the first year. (This reduction goes  down 10% each year for six more years.) An additional income tax reduction equal to 80% of annual Unemployment  Insurance premiums the first year. (This reduction goes down 10% each year for six more years.) Year 1 2 3 4 5 6 7 State te Incom ome Tax Credit 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% Unemp. p. Ins. . Credit 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20%

Each county ty offer ers s additional benefits fits to enrolled ed business esses: es: CITY AND COUNTY OF HONOLULU LU (THE ISLAN AND D OF OAHU) Two-year exemption from any increase in property taxes resulting from new  construction by EZ firms at their EZ sites Waiver of building and grading permit fees for enrolled EZ firms for seven  years HAWAII COUNTY (THE “BIG” ISLAND) Three-year exemption from any increase in property taxes resulting from  new construction by EZ firms at their EZ sites KAUAI I COUNTY (THE ISLAN ANDS DS OF KAUAI AI AND NIIHAU AU) Priority business permit processing  MAUI I COUNTY (THE ISLAN ANDS DS OF LANAI AI, , MAUI AND MOLOKAI) AI) Priority consideration will be given to EZs and enrolled EZ businesses when  processing business permits, granting zoning waivers

CO COUNT NTIES ES NO NOMINA NATE E ZO ZONE NES S AND ND PR PROVIDE IDE INC NCEN ENTIVES VES  Designate areas based on low income or high unemployment census tracts.  Assist DBEDT with marketing & promotion. Mahalo to our partner the County of Hawaii, for being a great program partner!  Process and record EZ enrollment and yearly reporting.

EL ELIGIBLE IBLE BUSI SINE NESS SS ACT CTIVITIE VITIES  Information technology  Agricultural production or design and production processing (wholesale, value-added retail ag*,  Medical research, clinical GMOs) trials, and telemedicine  Manufacturing  For-profit training (wholesaling) programs in international  Wholesaling/Distribution business management or  Biotechnology research, environmental development, production, remediation or sales  Repair or maintenance of  Aviation or maritime assistive technology repair or maintenance equipment  Telecommunications switching and delivery  Certain types of call systems centers  Wind energy producers

EN ENTER ERPR PRISE SE ZO ZONE NE CO COMPA PANI NIES ES

El Elig igib ible le Businesses inesses En Enro roll ll & Q & Quali lify fy  Submit enrollment form on- line or by mail to DBEDT: ◦ Located in a designated EZ ◦ Are in an eligible business category  Submit End-Of-Year form on-line or by mail to DBEDT to qualify for benefits.  Maintain hiring goals: ◦ “New” - Grow 10% first year, hold level for 6 years ◦ “Existing” - Grow 10% for Years 1-3; 15% each year from Years 4-7 50 50% % or more of revenu enue e from  eligibl ble e busines ess s activity ty must be earned ed in t the EZ.

HOW TO EN ENROLL Must be located in an EZ designated  zone Earn half of annual gross receipts from  one or more of the EZ eligible activities Employ at least one full-time worker  (Full-Time = 20 or more hours per week)

Signi gnifi fican ant t Dates tes: May-Jun une e 2011 1 – Takin ing g Govern rnme ment nt to the Commun uniti ties es Ini niti tiati tive. e. July y 1, 2011 1 – June ne 30, , 2013 3 – Susp spension nsion of Gener neral Excis cise e Tax Exemption ion for r new w EZ compa mpani nies es. July y 1, 2011 1 – June ne 30, , 2013 3 – Susp spension nsion of GET Exempti tion on for Licens censed ed Contr tract ctors ors.

INITIAL IAL AP APPLIC ICATION TION FORM

SAM AMPLE LE AP APPROV OVAL AL LETTER TER

Earn > 50% annual gross receipts from one or more of the EZ  eligible activities from transactions occurring within the zone (value-added retail, wholesale, sales) Increase your staff  “ Existing” Business Ex.:Start with 10 Employees Yr 1 10% increase from application* (10% = 1)11 Employees Yr 2 (maintain) 11 Employees Yr 3 (maintain) 11 Employees Yr 4 + 15% add to Year 3 12.5 Employees Yr 5 + 15% add to Year 4 14 Employees Yr 6 + 15% add to Year 5 15.5 Employees Yr 7 + 15% add to Year 6 17 Employees

Ag busine inesse sses s may y incr crease ase their r gross ss sales s by y 2% each ch ye year for ce certifi ificati cation on purpose poses! s!

Increase your staff “New” Business Ex: Start with 10 Employees Yr 1 10% increase from application* (10% x 10 = 1) 11 Employees Yr 2 - 11 Employees Yr 3 - 11 Employees Yr 4 - 11 Employees Yr 5 - 11 Employees Yr 6 - 11 Employees Yr 7 - 11 Employees * Inc ncrea ease e staff f by 10% 0% with th a minim inimum of 1 emp mplo loyee yee

END OF YE YEAR AR CERTIFIC TIFICATION TION LETTER TER

Agricultural businesses  1. May increase gross sales by 2% annually rather than the hiring requirements 2. May use income from value-added products (retail and wholesale) towards certification Force majeure  1. In the event of a natural disaster, agricultural producers and processors will receive EZ benefits Leased employees or joint employment contract  1. Employees may be counted as full time employees

HAWAII STATE AND COUNTY ENTERPRISE ZONE COORDINATORS CONTACT INFORMATION State of Hawaii Department of Business, Economic Development & Tourism P.O. Box 2359 Honolulu, Hawaii 96804 Wayne Thom Phone: (808)587-2772 Fax: (808)586-2589 Email: wthom@dbedt.hawaii.gov Marlene Hiraoka Phone: (808)587-2758 Fax: (808)586-2589 Email: mhiraoka@dbedt.hawaii.gov County of Hawaii: Jane Horike Department of Research and Development 25 Aupuni Street, Room 1301 Hilo, Hawaii 96720 Phone: (808) 961-8496 Fax: (808)935-1205 Email: jhorike@co.hawaii.hi.us County of Kauai: George Costa, Director Office of Economic Development County of Kauai 4444 Rice Street, Suite 200 Lihue, Hawaii 96766 Phone: (808)241-4949 Fax: (808)241-6399 Email: gcosta@kauai.gov County of Maui: Teena Rasmussen Economic Development Coordinator County of Maui 2200 Main Street, Suite 305 Wailuku-Maui, Hawaii 96793 Phone: (808)270-7710 Fax: (808)270-7995 Email: teena.rasmussen@co.maui.hi.us City & County of Honolulu: James Lota Office of Special Projects Department of Community Services 715 South King Street, Suite 205 Honolulu, Hawaii 96813 Phone: (808)768-5859 Fax: (808)532-8424 Email: jlota@honolulu.gov

Extended the EZ tax credits and  exemptions, for businesses engaged in the manufacturing of tangible personal property or in the producing or processing of agricultural products, for an additional three years. Allow the receipts, sales, and employees  of a business’s establishments in all enterprise zones located within the same county to count towards qualification requirements.

MAHALO! Website: te: http://inves /invest.Hawa t.Hawaii. ii.gov gov/bu /busine ness/e /ez/ z/