In 2002, Chattanooga was awarded a special federal designation that entitles businesses located inside the Renewal Community (RC) Zone to receive special federal tax benefits. Some of the major tax incentives available for businesses locating in the RC Zone, include:

Employment Wage Credit: Receive up to a $1,500 tax credit against federal taxes for every employee who lives and works in the RC Zone (15% of first $10,000 paid).  The WorkSmart program helps employers recruit qualifed workers in the Renewal Community Zones.

0% Capital Gains: Profits made from the sale of assets (intangible or tangible) are tax-exempt by qualifying RC businesses that hold the asset for at least 5 years after 12/31/2001. Qualifying businesses at a minimum must employ 35% of their workforce from the RC Zone over the 5 years.

Commercial Revitalization Deduction: Should a business decide to purchase, build and/or rehabilitate a building in the RC Zone, it could be eligible for rapid acceleration of capital building expenses, reducing the amount of taxes paid to the federal government and increasing cash flow to use for other business purposes. Up to 50% deduction is allowed in the first year an approved building is placed into service, or 10% per year over 10 years can be taken for qualified capital expenses for building projects used for commercial purposes in the RC Zone. Normally, these expenses are deducted over 39 years.

For further information on these or the other RC Tax Incentives contact the Mayor’s the Renewal Community Hotline (423) 757-4903 or consult www.renewal-community.com.