Renewal Community

Launched in 1993, the Empowerment Zone and Enterprise Community (EZ/EC) Initiative is an interagency effort focused on the creation of self-sustaining, long-term development in distressed urban and rural areas throughout the Nation. A large area within Downtown San Diego received a Renewal Community designation in January 2002. Incentives for qualified businesses located in the Renewal Community zone include significant Federal tax incentives and flexible grant funds. A map of the Downtown Renewal Community is posted below:(An interactive version with an Address Locator can be found at the HUD EC/EZ/RC site):

Incentives available for qualified Renewal Community businesses include:

Wage Credits

• Empowerment Zone Employment Credit (EZ Wage Credit). IRS Tax Form 8844.
• Renewal Community Employment Credit (RC Wage Credit). IRS Tax Form 8844.
• Work Opportunity Tax Credit (WOTC). IRS Tax Forms 5884 and 8850.
• Welfare to Work (WtW) Credit. IRS Tax Forms 5884, 8850, and 8861.
• Indian Employment Tax Credit. IRS Tax Form 8845.

Deductions

• Increased Section 179 Expensing. IRS Tax Form 4562.
• Commercial Revitalization Deduction. No applicable IRS tax form identified at time of publication; see IRS Publication 946.
• Environmental Cleanup Cost Deduction (Brownfields). No applicable IRS tax forms.
• Depreciation of Property Used on Indian Reservations. See IRS Publication 946.

Bond Financing

• Enterprise Zone Facility Bonds. No applicable IRS tax forms.
• Qualified Zone Academy Bonds (QZABs). IRS Tax Form 8860.

Capital Gains

• Zero Percent Capital Gains Rate for RC Assets and DC Zone Assets. No applicable IRS tax form identified at time of publication.
• Nonrecognition of Gain on Sale of Empowerment Zone Assets (EZAs). No applicable IRS tax form identified at time of publication.
• Partial Exclusion of Gain from Sale of Empowerment Zone Stock. No applicable IRS tax form identified at time of publication.

Other Incentives

• New Markets Tax Credit. No applicable IRS tax form identified at time of publication.
• Low-Income Housing Tax Credit (LIHTC). IRS Tax Forms 8609 and 8586.

Consult HUD's "Tax Incentive Guide for Businesses in the Renewal Communities, Empowerment Zones, and Enterprise Communities for more information about these incentives (PDF File, 576KB), visit the San Diego Renewal Community page at the HUD EC/EZ/RC website, or contact the local Renewal Community representative:

Ples Felix - City of San Diego
600 B Street, 4th Floor - MS 904
San Diego, CA 92101
Phone: 619-533-5442 Fax: 619-533-5250
Email: PFelix@sandiego.gov