enterprise zone


Definition of enterprise zone

: an economically depressed area in which business growth is encouraged by the government through tax relief and financial concessions

Examples of enterprise zone in a Sentence

Recent Examples on the Web One district designated the land around Sears as a state enterprise zone, which provided millions of dollars in tax breaks on sales, construction materials and the cost of utilities. At A Great Price, ProPublica, "Sears’ Headquarters Was Supposed to Turn a Sleepy Suburb Into a Boomtown. It Never Happened.," 15 May 2020 Half of the loan and grant program funds come from a pot of $3 million the Portland City Council reallocated last Wednesday from the city’s reserves and the other half from the city’s enterprise zone tax abatement program. oregonlive, "Portland announces coronavirus aid programs for small business, low-income families," 30 Mar. 2020 Rhodes said property tax abatements - largely used as incentives for redevelopment in community reinvestment areas and enterprise zones - are the biggest contributing factor to the increase in tax-exempt properties. Randy Tucker, Cincinnati.com, "'Somebody's gotta pay.' Tax-exempt property climbing in county, leaving others to pay taxes," 30 Jan. 2020 Oregon used to limit the number of enterprise zones – the agreements that exempt businesses from local property taxes – to just 30 statewide. Mike Rogoway, oregonlive, "Oregon law puts small towns in a bind when big tech demands huge tax breaks," 25 Oct. 2019 Businesses in the enterprise zone are given property tax credits for 10 years based on capital improvements and job creation. Erika Butler, baltimoresun.com, "Three new Aberdeen businesses stand to get nearly $814,000 in tax credits," 30 Oct. 2019 Across Oregon, companies receive more than $120 million in enterprise zone tax breaks annually, according to the most recent state data. Mike Rogoway, oregonlive, "Oregon law puts small towns in a bind when big tech demands huge tax breaks," 25 Oct. 2019 But lawmakers tossed the limit and since 2015 there are no limits whatsoever, and roughly 70 enterprise zones in total. Mike Rogoway, oregonlive, "Oregon law puts small towns in a bind when big tech demands huge tax breaks," 25 Oct. 2019 The state has helped foster the growth of the tech scene and other businesses through its relatively low tax burden, as well as special tax credits for job creation and business development in enterprise zones or economically disadvantaged areas. Special To The Denver Post, The Denver Post, "Guest commentary: Colorado’s economy is on display, and now it must meet the challenges brought on by success," 30 Aug. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'enterprise zone.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of enterprise zone

1978, in the meaning defined above

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Time Traveler for enterprise zone

Time Traveler

The first known use of enterprise zone was in 1978

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Statistics for enterprise zone

Last Updated

22 May 2020

Cite this Entry

“Enterprise zone.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/enterprise%20zone. Accessed 29 May. 2020.

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More Definitions for enterprise zone

enterprise zone


Financial Definition of enterprise zone

What It Is

An enterprise zone is a geographical area (often a few blocks or miles in a town) with a 0% tax on gains from the sale of assets and property sold in an enterprise zone.

How It Works

For example, let's say that downtown ABCTown has decayed over the last 10 years. There are many vacant storefronts, a lot of drug activity, dead landscaping, pitted sidewalks, and abandoned houses.

The state wants people to gentrify the area so that business open, jobs come to the area, people invest in improving the area, and the resulting higher property taxes will fund improvements such as roadwork and new landscaping. This, the state believes, will turn downtown ABCTown around. So, it creates an enterprise zone in which all gains on property sales are taxed at 0%.

John and Jane Doe hear about this and start looking at houses. They form an LLC and buy a house in the enterprise zone for $55,000. They put $15,000 into improving the property. Soon they have a nice house worth $95,000 that they can rent to a college student for $450 a month. They do this for a few years, and over that time more small businesses purchase and fix up homes in the area. This increases the value of the Doe home more—to $100,000. After five years, John and Jane decide to sell the house and travel around the world. Through their business, they sell the house for a $45,000 profit and don't pay capital gains on the sale to the state, saving them, say, $3,000.

Why It Matters

Governments implement enterprise zones when they want to encourage investments in certain areas. The D.C. Enterprise Zone is one example. The idea isn't just to make an ugly neighborhood pretty again; when portions of a city are revitalized, the value of the properties in the area increases, which generates more property tax revenue later for the municipality. Thus, from a government perspective, the idea is to forgo a little tax revenue now in order to gain a lot of tax revenue later.

Source: Investing Answers

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