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An Overview on Enterprise Zones

Overview

In 1982, Connecticut was the first state in the country to establish a statewide Enterprise Zone Program, where businesses can receive tax incentives for developing properties in distressed areas. Today, there are 10 types of zone designations, with 43 participating communities across the state.

Please note that this information is only intended to provide a summary of these programs. Refer to the state statutes for complete details.


Types of Zones

Targeted Investment Communities (those with an approved Enterprise Zone) may also designate these areas which may qualify for Enterprise Zone-level benefits:

Created through the Urban Jobs Program:

Key Incentives of Traditional Enterprise Zones

Companies involved in manufacturing, research associated with manufacturing and distribution warehousing (new construction/expansion only) as well as certain service companies that develop properties in an Enterprise Zone or a zone that is eligible for Enterprise Zone-level benefits will receive:

  • a five-year, 80% abatement of local property taxes on qualifying real estate and personal property (note: the company must be new to the municipality’s grand list as a direct result of a business expansion or renovation); and
  • a 10-year, 25% credit on the portion of the corporate business tax that is directly attributable to a business expansion or renovation project, as determined by the Connecticut Department of Revenue Services. The credit may increase to 50% based on number of new jobs created.

Newly formed corporations located in a zone qualify for a 100% corporate tax credit for their first three taxable years and a 50% tax credit for the next seven taxable years.

Eligibility for Businesses

These programs are designed to encourage capital improvements to land and/or buildings. Businesses must be prepared to either:

  • renovate an existing facility by investing at least 50% of the facility’s prior assessed value in the renovation; OR
  • construct a new facility or expand an existing facility; OR
  • acquire a facility that has been idle for a stated minimum timeframe (sliding scale dependent on average number of employees for previous six months):
    • (if 19+ employees) at least one year 
    • (if 6-19 employees) at least six months
    • (if 5 or fewer employees) no idleness requirement applies

Note: if the applicant is leasing this qualifying facility, the lease must be for at least five years with the option at that point to either 1) renew the lease for an aggregate term of not fewer than 10 years or 2) buy the facility. If the business averages fewer than 10 employees, those requirements may be reduced to aggregate leases of fewer than six years or the option to purchase after three years.

Eligibility for Municipalities

An Enterprise Zone consists of a primary or secondary census tract or several contiguous tracts within a community. To be eligible to establish an Enterprise Zone, a community must meet certain criteria related to social and economic conditions as outlined below.
Criteria Primary Census Tracts  Secondary Census Tracts 
Poverty Rate At least 25% At least 15%
Unemployment Rate  2x the state average At least 1.5x the state average
Population on Public Assistance At least 25% At least 15%

How to Apply

  1. A business must first submit a preliminary application to the Department of Economic and Community Development.
  2. If the applicant meets all requirements, a formal application will be provided.
  3. That application — along with any additional required documents — must be submitted prior to October 1 of the year in which the project will be completed. 
  4. If approved, DECD will issue a Certificate of Eligibility within a few weeks.

Contact

For more information on Enterprise Zones, please contact:

Edward Bona

Enterprise Zone Program Coordinator 

DECD

South Tower, Suite 5

450 Columbus Blvd.

Hartford, CT 06103-1843

(860) 500-2352

Fax: (860) 500-2335

edward.bona@ct.gov

 

OR

 

Susan Chen

Business Development Project Manager

DECD

South Tower, Suite 5

450 Columbus Blvd.

Hartford, CT 06103-1843

(860) 500-2402

Fax: (860) 500-2335