The State of California has quite a few business incentive programs that are described in this section.

Tax Incentives

Capital Investment Incentive Payments

Eligibility: California high tech businesses

This program is a competitive tool that cities and counties employ to negotiate property tax rebates with high tech manufacturing companies.  Local governments can cap the value of any new high tech manufacturing plant at $150 million annually for tax purposes, for up to 15 years.  The local government would then charge the manufacturer an annual “community services fee” of about $2 million.

Contact:

California Technology, Trade and Commerce Agency
(916) 622-1394
http://commerce.ca.gov/state/ttca/ttca_homepage.jsp

Child Care Tax Credit

Eligibility: California businesses meeting the program or construction guidelines above.

Employers who pay or incur costs for the start up of a child care program or construction of an onsite child care facility are eligible for a credit against state income taxes equal to 30 percent of its costs, up to a maximum of $50,000 in one year.  Excess credits may be carried over to succeeding years.

Contact:

California Technology, Trade and Commerce Agency
(916) 322-1394
http://commerce.ca.gov/state/ttca/ttca_homepage.jsp

Economic Revitalization Manufacturing Property Tax Rebates

Eligibility: California manufacturing businesses through cities and county Section 5108 of California Property Tax Law now permits local governing bodies to rebate some or all of the property tax revenue that local agencies would receive from “economic revitalization manufacturing property” for a period of five fiscal years from the date the property was placed in service.  Tangible personal property must be directly involved in the manufacturing process, the project must lead to the creation of 10 new full-time manufacturing jobs, the company must pay at least $10 per hour and those jobs must be in continuous existence for the duration of the rebate.

Contact:

California Technology, Trade and Commerce Agency
(916) 322-1342
http://commerce.ca.gov/state/ttca/ttca_homepage.jsp

Manufacturers’ Investment Credit

Eligibility: Manufacturers operating in California

Six percent manufacturers’ investment credit (MIC), is generally unlimited.  Can be used to offset income or franchise tax based upon the purchase or lease of manufacturing and related equipment which is “depreciable” under certain federal regulations and has California sales or use tax paid on its purchase.  The credit also includes certain capitalized labor costs, and “special purpose buildings and foundations.”  Also available for new or start up companies is the option of a 5 percent partial sales or use tax exemption on all qualifying manufacturing property purchased or leased generally during the company’s first three years of operation.

Contact:

California Technology, Trade and Commerce Agency
(916) 622-1394
http://commerce.ca.gov/state/ttca/ttca_homepage.jsp

Net Operating Loss Carryover

Eligibility: California businesses

California tax law allows businesses that experience a loss for the year to carry this loss forward to the next year in order to offset income in the following year.  New businesses can carry over 100 percent of their losses over eight years if the loss is in their first year of operation, 100 percent over seven years if in their second year of operation and 100 percent over six years if in their third year of operation.  Existing California businesses can carry over 50% of their losses for five years.

Contact:

California Technology, Trade and Commerce Agency
(916) 622-1394
http://commerce.ca.gov/state/ttca/ttca_homepage.jsp

Research and Development Tax Credit

Eligibility: California businesses

Designed to encourage companies to increase their basic research and development activities in California.  The research tax credit allows companies to receive a credit of 11 percent for qualifying research expenses (research done in-house) and 24 percent for basic research payments (payments to an outside company), making it the highest in the nation.  To qualify, research must be conducted within California and must not include research for the purpose of improving a commercial product for style, taste, cosmetic or seasonal design factors.

Contact:

California Technology, Trade and Commerce Agency
(916) 322-1394
http://commerce.ca.gov/state/ttca/ttca_homepage.jsp

Work Opportunity and Welfare-to-Work Tax Credit (WOTC)

Eligibility: California businesses

The WOTC program promotes the hiring of qualified job seekers by offering employers a federal tax incentive credit of up to $8,500.  The program also assists job seekers who qualify to find jobs.

Contact:

Employment Development Department
(805) 788-2697
www.edd.ca.gov

Other Incentives

Child Care Facility Financing Program

Eligibility: Established, licensed, center-based child care providers, both non-profit and for-profit, whose mission is to support child development and to support working mothers and parents.

The purpose of this program is to enhance the child care infrastructure within California by providing permanent financing through mortgages for the acquisition, expansion, rehabilitation, or refinancing of new or existing child care facilities.

Contact:

California Technology, Trade and Commerce Agency
(916) 622-1394
http://commerce.ca.gov/state/ttca/ttca_homepage.jsp

California Economic Development Lending Initiative
(510) 267-8992
http://www.caratnet.org/CEDLI.htm

Subsidized Child Care

Eligibility: Based on need and income as outlined by the program guidelines.

Provides subsidized child care to eligible applicants who are enrolled in school, training, employment or other qualified activity requiring child care.

Contact:

Child Care Resource Connection
(805) 541-2272
http://www.eocslo.org/