Tax Credits and Incentives
Central Market/Tenderloin Payroll Expense Tax Exclusion
The Central Market/Tenderloin Payroll Expense Tax Exclusion (CMTPTE) exempts businesses located within the defined exclusion area from additional payroll tax as they add jobs during any six years in an eight-year period.
SF Enterprise Zone (EZ) Payroll Expense Tax Credit
The local Enterprise Zone program enables businesses located in targeted locations of the City to reduce their payroll expense tax for qualified employees. The tax credit is for new jobs created on or after January 1, 1992.
Stock Based Compensation Payroll Expense Tax Exclusion
A payroll expense tax exclusion for stock based compensation was approved on June 3, 2011 and allows companies to exclude stock based compensation above certain thresholds for tax years 2011 – 2017. The exclusion expires in 2017. All pre-IPO companies are eligible. Only stock compensation granted before an IPO is eligible.
Biotechnology Payroll Expense Tax Exclusion
San Francisco’s Mission Bay community is at the center of the biotechnology revolution. To support the expansion of this flourishing industry and the creation of new jobs, the City of San Francisco offers a payroll expense tax exclusion for up to 7.5 years to San Francisco-based businesses engaged in biotechnology pursuits.
Clean Technology Payroll Expense Tax Exclusion
The City of San Francisco provides a payroll expense tax exclusion for up to 10 years to clean technology companies located in the City. Any business that employs less than 100 employees is eligible for the payroll tax exclusion.
Film Production Incentives
The SF Film Office offers a the "Scene in San Francisco" rebate program, in which qualifying productions are eligible for a refund of all payroll tax and city fees up to $600,000 per production.
California Competes 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. Tax credit agreements will be negotiated by GO-Biz and approved by a newly created “California Competes Tax Credit Committee,” consisting of the State Treasurer,the Director of the Department of Finance, the Director of GO-Biz, one appointee from the Senate, and one appointee of the Assembly.
California New Jobs Tax Credit
Effective January 1, 2009, any small businesses (20 employees or less) not located in the Enterprise Zone that adds one or more full time positions in 2009 receives a $3,000 tax credit per position.
Manufacturing and Research & Development Exemption
The Manufacturing and Research & Development Equipment Exemption allows manufactures and certain research and developers to obtain a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases.
New Employment Credit
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 [herein referred to as a designated geographic area (DGA)], and that receives a tentative credit reservation for that qualified full-time employee. In order to be allowed a credit, the qualified taxpayer must have a net increase in the total number of full-time employees in California.
State Enterprise Zone (EZ) Tax Credits & Incentives
The State of California EZ program helps businesses reduce their state income tax liability through hiring tax credits for employees hired before January 1, 2014, business expense deductions from 2013, accelerated depreciation, and a 15-year carry-over of up to 100% of net operating losses. Eligible businesses must be located in designated Enterprise Zone areas as of December 31, 2013.
A full list of State Tax Credits can be found on the Franchise Tax Board's website here.
Work Opportunity Tax Credit (WOTC)
The Work Opportunity Tax Credit is an income tax credit for employers who hire employees from eligible groups including youth, ex-offenders, and public assistance recipients.
Historic Preservation Tax Credit
The US Department of the Interior supports the preservation of historic buildings through federal tax incentives, including a 20% tax credit for the certified rehabilitation of historic structures, and a 10% tax credit for the rehabilitation of non-historic buildings built before 1936.
HIRE (Hiring Incentives to Restore Employment) Act
Two new tax benefits are now available to employers hiring workers who were previuosly unemployed or only working part time. Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after March 18, 2010. In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns.