Incentives that Work From a Community That Works
Madera County functions through an efficient government that applies its resources where they provide the most benefit. Each incentive package is designed to meet customer needs and to directly address the specific barriers to selection. From employee training to financial support, our local toolbox of options is one of the most inclusive in the state of California.
Local incentives include fast tract permitting and site review, site location assistance, financial assistance with short and long term, industrial development bonds, equipment only purchase program, and a revolving loan fund for gap financing. The Madera Enterprise Zone and the City of Madera’s Redevelopment Agency offer tax and business incentives. Employee credits can be used to write down impact fees.
Special Districts and Zones
Madera Enterprise Zone. Since its inception, Madera has had the state’s most successful economic and employment incentive area (Enterprise Zone). Companies located in the Madera Enterprise Zone are eligible for substantial tax credits and benefits that include:
- Firms can earn over $29,000 in state tax credits for each qualified employee hired.
- Firms may reduce taxes by the amount of sales or use tax paid or incurred on certain equipment. Individuals may claim a credit on the first $1 million of qualified equipment and Corporations may claim a credit on the first $20 million.
- Firms can take advantage of up front expensing of certain depreciable properties.
- Firms can carry forward 100 percent net operating loss (NOL). NOL may be carried forward 15 years. Lenders to businesses located in the Enterprise Zone may receive a net interest deduction. Unused tax credits can be applied to future tax years, stretching out the benefits of the initial investment.
- Enterprise Zone companies can earn 5 percent preference points on state contracts.
Madera Redevelopment Agency (RDA). In an effort to end urban blight, the Madera RDA offers assistance for off-site improvements, infrastructure development and economic development assistance projects within the district.
Foreign Trade Zone (FTZ). Three designated Foreign Trade Zone areas will allow applicable companies to purchase imported equipment, raw materials and supplies at duty-free or duty-reduced rates. The FTZ also provides benefits to companies developing products for export. Some benefits include:
- Re-exports: Merchandise imported and later re-exported is never assessed any Customs duties.
- Reject, Scrap, and "Consumed" Merchandise: Imported merchandise that is admitted into a Zone and then rejected, scrapped or consumed is not assessed any Customs duties.
- Zone-to-Zone Transfers: Merchandise imported into a zone and then shipped into another zone can be shipped duty-free to the receiving zone.
- Duty Deferral: When imported merchandise is shipped to U.S. locations from a zone, the duties are deferred while the merchandise remains in the zone. The cost-of-money savings on duty deferral can be significant for large volume distributors, or operations with long inventory turnover periods.
- Inverted Tariffs: When components are imported and manufactured into a new product for re-export or sold in the U.S., the importer may elect to apply the finished product duty rate, or the component duty rate, whichever is lower.
- Merchandise Processing Fee: Importers into U.S. Foreign Trade Zones are only required to submit one Merchandise Processing Fee (MPF) per week for all shipments from the zone, thus reducing MPF costs to importers who otherwise would file multiple entries.
Bond Financing
Purchasing of Land, Building and Equipment. The Madera County Economic Development Commission (MCEDC) has been a leader in securing low interest, tax-exempt bonds (requiring a letter of credit) for new and existing industrial projects through the Industrial Development Bond Program. These special bonds can be used for the purchase of land, building and equipment up to a total amount of $10 million.
Municipal Incentives That May Be Accessed
Partnering Program. Madera County and its cities, Madera and Chowchilla, partner with new industry locations and expansions in a cost-sharing program that can include the purchase of land, the reduction of development/impact fees, and the construction of offsite infrastructure.
Locally Administered Revolving Loan Fund. The Madera County Economic Development Commission (MCEDC) is authorized to provide long- and short-term fixed asset financing and working capital for new and existing businesses, through the Madera County Small Business Loan Program. MCEDC administers funds that provide low interest loans in “gap” financing situations. The program is funded, primarily by, the State Community Development Block Grant (CDBG). Funding from the program can be for working capital, inventory purchase, equipment or machinery purchase, real estate purchase, and leasehold improvements. Terms and interest rate are set on a case-by-case basis, and are based on the asset being financed. Loans of less than $50,000 are processed and approved locally. Loans greater than $5O,000 require additional approval from the State CDBG Program. The MCEDC assures speedy, effective, and confidential processing of your loan.
