3 NEW CALIFORNIA CREDITS AND INCENTIVES
Manufacturing Sales Tax Exemption
California has a new sales tax exemption of 4.19% effective 7/1/14 through 6/30/22 applicable to equipment purchases of up to $200 million by a company engaged in manufacturing, biotechnology, or research and development. The exemption applies at the time of purchase so long as you have obtained a certificate from the Board of Equalization prior to your purchase.
Qualified equipment includes basic manufacturing and R&D for manufacturing and biotech, and addition of necessary tenant improvements, e.g., clean rooms.
This incentive is available to businesses located anywhere in California.
California Competes Credit
This credit is an investment incentive to attract businesses to California or expand or retain businesses already located here. The State GO-Biz Program can now negotiate offering credits to companies based upon job creation, location and capital investment.
New Employment Credit (NEC)
Taxpayers who own businesses located in a designated geographic area (DGA)* that have a net increase in jobs from year to year qualify for a 35% tax credit for employees hired between 1/1/14 and 1/1/20, earning wages between $12 and $28 per hour, and who were one of the following:
- unemployed for the last 6 months;
- a Veteran separated from service within the last 12 months;
- a recipient of the Federal earned income tax credit in 2013;
- an ex-offender convicted of a felony; and/or
- a recipient of CalWORKS or general assistance.
Gardena has one exclusive Designated Geographic Area (DGA) (Census Tract 6029) which makes qualifying businesses who are either located or wish to relocate into this area, eligible to apply for this credit. The maximum credit amount is $11,200 per year or $56,000 total over a five year period per employee.
*DGA Mapping Tool – Use this tool to determine if a location is in a DGA.
NEC Quick Facts – Use this document to see if your business may qualify for the NEC.
Frequently Asked Questions – These FAQs outline the requirements, credit computation, and how to claim the credit.
New Employment Credit Reservation – Use this tool to request a reservation.
Annual Certification of Employment – Obtain more information for this requirement.