26 U.S.C. § 1397C: Enterprise zone business defined

any qualified business entity, and any qualified proprietorship. every trade or business of such entity is the active conduct of a qualified business within an empowerment zone, at least 50 percent of the total gross income of such entity is derived from the active conduct of such business, a substantial portion of the use of the tangible property of such entity (whether owned or leased) is within an empowerment zone, a substantial portion of the intangible property of such entity is used in the active conduct of any such business, a substantial portion of the services performed for such entity by its employees are performed in an empowerment zone, at least 35 percent of its employees are residents of an empowerment zone, less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity is attributable to collectibles (as defined in section 408(m)(2)) other than collectibles that are held primarily for sale to customers in the ordinary course of such business, and less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity is attributable to nonqualified financial property. at least 50 percent of the total gross income of such individual from such business is derived from the active conduct of such business in an empowerment zone, a substantial portion of the use of the tangible property of such individual in such business (whether owned or leased) is within an empowerment zone, a substantial portion of the intangible property of such business is used in the active conduct of such business, a substantial portion of the services performed for such individual in such business by employees of such business are performed in an empowerment zone, at least 35 percent of such employees are residents of an empowerment zone, less than 5 percent of the average of the aggregate unadjusted bases of the property of such individual which is used in such business is attributable to collectibles (as defined in section 408(m)(2)) other than collectibles that are held primarily for sale to customers in the ordinary course of such business, and less than 5 percent of the average of the aggregate unadjusted bases of the property of such individual which is used in such business is attributable to nonqualified financial property. Except as otherwise provided in this subsection, the term “qualified business” means any trade or business. the property is not residential rental property (as defined in section 168(e)(2)), and at least 50 percent of the gross rental income from the real property is from enterprise zone businesses. The rental to others of tangible personal property shall be treated as a qualified business if and only if at least 50 percent of the rental of such property is by enterprise zone businesses or by residents of an empowerment zone. The term “qualified business” shall not include any trade or business consisting predominantly of the development or holding of intangibles for sale or license. any trade or business consisting of the operation of any facility described in section 144(c)(6)(B), and the aggregate unadjusted bases (or, if greater, the fair market value) of the assets owned by the taxpayer which are used in such a trade or business, and the aggregate value of assets leased by the taxpayer which are used in such a trade or business, reasonable amounts of working capital held in cash, cash equivalents, or debt instruments with a term of 18 months or less, or debt instruments described in section 1221(a)(4). a business entity or proprietorship uses real property located within an empowerment zone, the business entity or proprietorship also uses real property located outside the empowerment zone, the amount of real property described in paragraph (1) is substantial compared to the amount of real property described in paragraph (2), and the real property described in paragraph (2) is contiguous to part or all of the real property described in paragraph (1), The amendments made by this section [amending this section] shall apply to taxable years beginning on or after the date of the enactment of this Act [ Aug. 5, 1997 ]. For purposes of section 1394(b) of the Internal Revenue Code of 1986, the amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.”