Tax Incentives

The City of San Diego offers business incentives that are aligned with PDF icon City Council Policy 900-12 , giving companies an edge in the marketplace and helping them expand and prosper.

Check out this video on how the City's Economic Development Department assisted iboss Cybersecurity in building its San Diego office.

 

 

The Business & Industry Incentive Program serves as the City's primary economic development policy.

A business is eligible for financial incentives if it meets at least one of the following criteria:

  • It provides significant revenues and/or jobs. 
  • It promotes the stability and growth of City taxes and other revenue.
  • It constructs appropriate development in older parts of the City. 
  • It is being induced by other jurisdictions to relocate from San Diego. 

The City can help with project advocacy, due diligence and expedited permit review. Financial incentives can include reimbursement of all or a portion of building and/or development-related fees.

The City's Economic Development Department has a proactive Business Expansion, Attraction and Retention (BEAR) team that works directly with key businesses in targeted industries. It provides assistance and incentives to businesses and other economic development stakeholders in our region, resulting in the creation and retention of jobs in San Diego. Several business incentive programs are available  to assist companies in the San Diego region.

Contacts:

Incentives in Manufacturing and Logistics industries
Russ Gibbon
619-236-8350
[email protected]

Incentives in Innovation and Technology-based industries
Kevin Sullivan 
619-533-5954
[email protected]

California Competes  

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.

Permit Assistance

Certain San Diego businesses may also be eligible to receive expedited review and approval of building- and development-related permit entitlements. Prior to the lease or purchase of real estate, Economic Development staff can also provide assistance , including the identification of zoning standards, development regulations and submittal requirements.  

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.  

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.

 

The City of San Diego ensures its business climate is attractive for both existing businesses and those interested in relocating to San Diego.

Additionally, the City cultivates an open dialogue and partnership with private nonprofit organizations, trade associations and other institutions, including the San Diego Regional Economic Development Corp. and the San Diego Regional Chamber of Commerce to maintain a business-friendly environment.