CARIBOU — A federal tax incentive, which has helped dozens of Aroostook County businesses, is up for renewal in Congress and officials with the Northern Maine Development Commission (NMDC) are urging businesses to send letters to the congressional delegation in support of reauthorization.
“NMDC and Aroostook Partnership for Progress have already drafted letters of support for reauthorization of the Empowerment Zone Tax Incentive,” said NMDC Executive Director Bob Clark. “Although final passage out of the Senate Finance Committee was 23 ayes to 3 nays, it is important to let your voice be heard before the measure comes up for a full vote this fall.”
The proposal extends for two years, through December 31, 2016, the period for which the designation of an empowerment zone is in effect, thus extending the empowerment zone tax incentives, including the wage credit, increased section 179 expensing for qualifying equipment, tax-exempt bond financing, and deferral of capital gains tax on sale of qualified assets replaced with other qualified assets.
The Aroostook County Empowerment Zone (ACEZ) was designated as a new zone in 2002 under the EZ Program’s outmigration criteria; with the region qualifying as a result of the large population loss experienced since the 1960’s. With the closure of Loring Air Force Base in 1994 and the ongoing changes in the potato and forest industries – the traditional economic engines of the region – this population loss accelerated. Empowerment zone designation was seen as an important change in direction because the federal funding available through the EZ programs could have a powerful positive impact on the regional economy.
All that remained of the original empowerment zone designation was the tax incentive, which has benefited many businesses in the region.
“The Empowerment Zone employment credit provides businesses with an incentive to hire individuals who both live and work in an empowerment zone,” said NMDC Director of Investor and Community Relations Jon Gulliver. “The credit is equal to 20 percent of the first $15,000 in wages if the employee both lived and worked in an empowerment zone. Businesses can retroactively claim this credit if they haven’t taken it previously on their federal income tax return.”
Further information on the ACEZ can be found at www.nmdc.org.
