Localized Tax Credit Incentives (LTCI)

The Tuolumne County Economic Development Authority staff will assist you in obtaining incentives for your business through the various programs outlined below.

Opportunity Zones

Certain parts of Tuolumne County and the City of Sonora are located within the Opportunity Zone Program. This program is a new (enacted December 2017) federal economic development tax incentive designed to funnel private investment to low and moderate-income Census tracts across the U.S. The incentive provides investors the opportunity to temporarily defer or avoid taxes on capital gains – profits from the sale of an investment – if those gains are reinvested in an Opportunity Fund benefitting low income communities. The creation of this policy was led by the Economic Innovation Group, who anticipates that this program will free-up $6 trillion in unrealized capital gains that can be leveraged in the neighborhoods that need it most. Visit Opportunity Zone Program to learn more.

An Example of how it works:

If an investor cashed out $1 million in stocks, they would owe 23.8% or $238,000,000 of that in taxes to the government. However, if that $1 million were invested into an Opportunity Zone taxes would be deferred for five years. If these funds stay invested for more than five years the tax bill would be decreased by 10%, and if funds stayed invested for more than seven years the tax bill would be reduced by another 5%. Furthermore, any capital gains collected from investments made by Opportunity Funds in the Zone would incur no capital gains tax levied. According to the statute, Opportunity Funds will be set up as a partnership or corporation. They can fund investment in a domestic corporation, a partnership interest, or real property, so long as any of these have 90% or more of their holdings in an Opportunity Zone.

 

New Employment Hiring Tax Credit (NEC)

The New Employment Credit (NEC) is available for each taxable year beginning on or after January 1, 2014, and before January 1, 2021, to a qualified taxpayer that hires a qualified full-time employee on or after January 1, 2014, and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a designated census tract or economic development area, and that receives a tentative credit reservation for that qualified full-time employee. Portions of the City of Sonora and areas east of Sonora qualify for this incentive. Visit NEC Program and NEC Program Map to learn more.