The City of San Diego offers business incentives that are aligned with City Council Policy 900-12 , giving companies an edge in the marketplace and helping them expand and prosper.
This flexible tax credit promotes job creation and business attraction, expansion and retention efforts in California. Companies submit online applications to obtain state tax credits. The program is administered by California Governor's Office of Business and Economic Development (GO-Biz).
For more information, please visit the California Competes Tax Credit Program.
Partial Sales Tax Exemption
The Partial Sales Tax Exemption affords businesses a 4.19 percent state sales tax exemption to reduce the tax on manufacturing and research & development (R&D) equipment purchases. The exemption is administered by the California Board of Equalization (BOE).
For more information regarding qualifying equipment and eligibility requirements for this tax exemption, please visit the state of California Board of Equalization - Manufacturing and Research & Development Exemption Program.
New Employment Credit
The State of California's New Employment Credit (NEC) allows San Diego businesses an opportunity to capture valuable tax credits intended to reduce their annual state income tax liability. The NEC allows qualifying companies to capture up to $56,000 in tax credits (per qualified employee) for hiring recently discharged military veterans, ex-offenders, long-term unemployed persons and public assistance recipients.
For more information regarding employer and employee eligibility requirements for the state’s NEC, please visit the California Franchise Tax Board - New Employment Credit Frequently Asked Questions.
Please click on the following link (New Employment Credit Estimator) if you would like to find out if your business may be eligible for state tax credits based on full-time employees hired after Jan. 1, 2014.
Sales and Use Tax
Since July 2014, manufacturers and certain R&D companies may qualify for partial exemption of sales and use tax on certain job-related equipment purchases and leases. More information and eligibility requirements can be found at the Tax Guide for Manufacturing and Research & Development Equipment Exemption.
Business Cooperation Program
The City's Business Cooperation Program can provide sales and use tax rebates of $0.25/dollar of local tax allocated to the City of San Diego when a business implements new practices for sales, purchasing or tax accounting. The program is designed to reallocate local sales and use taxes. It does not cause an increase in the amount of sales and use taxes paid by participating businesses. This program provides a rebate equal to $2,500 per $1 million of taxable sales or purchases in instances when the City would not have received sales tax revenue via standard practices.
Incentives in Manufacturing and Logistics industries