San Diego offers business incentives that are aligned with City Council Policy 900-12 which give companies an edge in the marketplace and help them expand and prosper. The Business & Industry Incentive Program serves as the City's primary economic development policy.
Businesses are eligible for financial incentives if they meet one of the following criteria: (1) provide significant revenues and/or jobs; (2) promote the stability and growth of City taxes and other revenue; (3) construct appropriate development in older parts of the City; or, (4) are being induced by other jurisdictions to relocate from San Diego. These incentives may include:
- project advocacy, due diligence, and streamlined ministerial and discretionary permit review processes.
- 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 to provide assistance and incentives that result in the retention and creation of jobs in San Diego. Several business incentive programs are available locally and statewide to assist companies in the San Diego region.
The State of California's New Employment Credit (NEC) allows San Diego businesses an opportunity to capture valuable tax credits intended to leverage against their annual state income tax liability. In part, the NEC allows qualifying companies to capture up to $56,000 in tax credits (per qualified employee) for hiring individuals in traditionally difficult to employ categories; such as recently discharged veterans, ex-offenders, long-term unemployed, and public assistance recipients.
For more information regarding employer and employee eligibility requirements for the state’s New Employment tax credit program, 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.
California Competes Tax Credit Program
This flexible tax credit program promotes job creation, business attraction, retention and expansion efforts in California. The program goal is to incentivize companies planning to move to California, or expand their existing business operations in the state. Companies statewide submit online applications for the opportunity to capture significant quarterly allocations of 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 Program
The Partial Sales Tax Exemption Program affords businesses a 4.19% state sales tax exemption for qualifying manufacturing equipment purchases statewide; resulting in an immediate, direct cost benefit for company at the time qualifying equipment is purchased. The program is administered by state of 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.
Certain San Diego businesses may be eligible to receive expedited plan check services involving building permit processing such as tenant improvements.
Business Cooperation Program (BCP)
The City's BCP can reduce the cost of doing business in San Diego by preventing the annual loss of millions of dollars in sales and use tax revenue due to misallocation. Financial incentives available through the BCP encourage businesses with significant equipment expenditures to take part in the program to support proper allocation of sales and use taxes to the City. The BCP can provide a tax rebate of up to 50% of the local 1% sales or use tax paid in connection with San Diego based operations.
The City of San Diego is actively promoting these incentives to businesses and other economic development stakeholders in our region. To determine if your business might qualify for some of these incentives, please contact Kevin Sullivan of the City's Economic Development Department at (619) 533-5954 or via email [email protected]
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.