enterprise zone

enterprise zone designated geographical district in which resident businesses are legally entitled to receive special benefits from a government, established in economically depressed areas to encourage companies to locate there. Most states enacted enterprise zone programs during the 1980s, and changes in the federal tax code in 1993 instituted tax incentives for businesses in certain locations, sometimes referred to as empowerment zones. Typical incentives offered to attract businesses to enterprise zones include tax credits, subsidized loans, and reduced regulations. Although usually associated with urban areas, enterprise zones have also been set up in rural areas. Most enterprise zones have only been marginally successful in reviving the areas in which they are located, in part because businesses located in such zones often employ workers who live outside the area.

enterprise zone An area, designated as such by the government, in which its aim is to restore private-sector activity by removing certain tax burdens and by relaxing certain statutory controls. Benefits, which are available for a 10-year period, include: exemption from rates on industrial and commercial property; 100% allowances for corporation- and income-tax purposes for capital expenditure on industrial and commercial buildings; exemption from industrial training levies; and a simplified planning regime.