Empowerment Zones are certain urban and rural areas where employers and other taxpayers qualify for special tax incentives. They were created by legislation enacted in 1993. Most zones had an expiration date of Dec. 31, 2009; however, subsequent legislation extended the expiration dates to Dec. 31, 2011, and then Dec. 31, 2013. As such, empowerment zone designations remain in effect through the end of the year.
In May, the IRS issued Notice 2012-38 to address the relevant provision of the American Taxpayer Relief Act of 2012. Notice 2013-38 provided that any nomination for an empowerment zone in effect on Dec. 31, 2009, will have a new termination date of Dec. 31, 2013, unless the governing state or municipality declined the extension in a notification to the IRS.
The deadline for notification was July 29, 2013, and no state or municipality contacted the IRS to decline the extension. Therefore, all empowerment zone designations in effect on Dec. 31, 2009, remain in effect through Dec. 31, 2013.
The American Taxpayer Relief Act of 2012 did not provide for the extension of the designation for the District of Columbia enterprise zone, and therefore that designation ended on Dec. 31, 2011.
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