Business Incentives

The California Business Investment Services (CalBIS) Unit is comprised of a team of business development experts and specialists with in-depth insight into available resources, ongoing initiatives, and government programs that provide direct technical and financial assistance to companies that are interested in either locating or expanding in California.

Below are some of the incentive programs that the State of California offers:

California Competes Tax Credit

The California Competes Tax Credit is an income tax credit available to businesses that want to come to California or stay and grow in California. Unlike the Enterprise Zone program this program is Statewide. Thus, there are no geographic restrictions. Tax credit agreements will be negotiated by GO-Biz and approved by the “California Competes Tax Credit Committee.”

(Partial) Sales And Use Tax Exemption

A partial exemption of sales and use tax on certain manufacturing biotechnology and research and development equipment purchases. The partial exemption applies only to the state sales and use tax rate portion, currently at 4.1875 percent. The exemption does not apply to any local, city, county, or district tax. All manufacturers (NAICS Codes 3111 - 3399, inclusive), Research and Development in Biotechnology and Research and Development in the Physical, Engineering, and Life Sciences (NAICS Codes 541711 and 541712, respectively).

(Full) Sales and Use Tax Exclusion – Advanced Manufacturing & Transportation and Alternative Energy

A sales tax exclusion from both state and local sales tax collection on equipment purchases for qualifying businesses that conduct qualifying activities. Sales tax rates vary by jurisdiction (typically 7% to 9.25%).

New Employment Hiring Tax Credit (NEC)

The New Employment Credit (NEC) is available for each taxable year beginning on or after January 1, 2014, and before January 1, 2021, to a qualified taxpayer that hires a qualified full-time employee on or after January 1, 2014, and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a designated census tract or economic development area, and that receives a tentative credit reservation for that qualified full-time employee.

California Research & Development Tax Credit

Corporate income tax credits available to companies that have incurred qualified research expenses in California. A taxpayer qualifies for the credit if it paid or incurred qualified research expenses while conducting qualified research in California. The taxpayer may receive up to 15 percent of the excess of current year research expenditures over a computed base amount.

Employment Training Panel

A cash reimbursement for training cost incurred by employers set by a pre-determined two-year performance based contract. Contracts vary based on number of employees enrolled, hours of training, training material and employee wages.

Industrial Development Bond (IDB)

Industrial Development Bond (IDB) financing is a competitive financing option available for the acquisition of manufacturing facilities and equipment providing a financing option for manufacturers to access private capital markets at tax-exempt rates.

Small Business Loan Guarantee (SBLGP)

The California Small Business Loan Guarantee Program (SBLGP) assists businesses with the creation and retention of jobs while encouraging investment into low- to moderate-income communities. The SBLGP enables small businesses to not only obtain a loan it could not otherwise obtain but more importantly helps to establish a favorable credit history with a lender so the business may obtain loans in the future on its own without the assistance of the program.

California Capital Access with Collateral Support (CalCAP - CS)

CalCAP CS pledges cash to cover the collateral shortfall of loans of $100,000 or more. CalCAP CS provides up to 40% of the loan value, with the possibility of an additional 10% for businesses located in a Severely Affected Community. Small business lenders loaning to businesses classified as a small business under U.S. Small Business Administration guidelines and that have fewer than 500 FTEs. The borrower's primary business and at least 51% of its employees or business income, sales or payroll must be in California. The business activity resulting from the bank's loan must be created and retained in California.

Pollution Control Tax-Exempt Bond Financing Program

Private activity tax-exempt bond financing to California businesses for the acquisition, construction, or installation of qualified pollution control, waste disposal, waste recovery facilities, and the acquisition and installation of new equipment.

California Capital Access Program

The California Capital Access Program (CalCAP) encourages participating banks and lending institutions to provide loans to small businesses that fall outside of conventional underwriting standards. Small business owners that have difficulty in obtaining conventional financing may qualify for a CalCAP loan through any CalCAP lender.

California Film & Television Tax Credit Program

The California Film Commission offers a tax credit incentive program to qualified motion pictures. $100 million has been allocated annually beginning in fiscal year 2009-2010 through 2016-2017. The Program allows a 20% tax credit for qualified production related expenses to a taxpayer against State income taxes.

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