New Business Incentives
Several business incentive programs are available to assist companies in the San Diego region. In part, these incentives afford businesses a unique opportunity to capture valuable tax credits intended to leverage against their annual state income tax liability, as well as achieve other direct cost savings benefits.
Following is a summary of the these business incentives:
The State of California's New Employment Credit (NEC) affords 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 potentially 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 download the NEC presentation below; or visit 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).
Download the California Competes Tax Credit Program presentation below for more information, or visit the California Competes Tax Credit Program web site.
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, download the Sales and Use Tax Exemption Incentive presentation or 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]