California Competes Tax Credit

The California Competes Tax Credit is an income tax credit available to businesses who want to come, stay, or grow in California. Tax credit agreements are negotiated by GO-Biz and approved by a statutorily created ‘California Competes Tax Credit Committee’. There are three deadlines throughout the year where businesses can apply.

New Employment Credit

The New Employment Credit is an income tax credit available to companies that hire qualified full-time employees within designated geographic areas. The credit is based on 35% of qualified wages.

Advanced Transportation and Manufacturing Sales and Use Tax Exemption

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) offers a full sales and use tax exclusion to manufacturers that promote alternative energy and advanced transportation.

Research & Development Tax Credit

A business may qualify for an income tax credit if it paid for or incurred qualified research expenses while conducting qualified research activity in California. Qualified research expenses include wages, supplies, and contract research costs.

Sales and Use Tax Exemption for Agriculture

The California Department of Tax and Fee Administration administers a partial exemption from the sales and use tax for the sale, storage, use, or other consumption of farm equipment, machinery and their parts.

Sales and Use Tax Exemption for Manufacturing

The California Department of Tax and Fee Administration administers a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases.

Net Operating Loss Carryover and Carryback

If you’re like most business owners, you won’t see a profit in your first year of operation. As your business grows, you may face one or more years in which your business’ expenses exceed its income. In other words, the business may have a loss, which may translate into a Net Operating Loss (NOL) deduction.

Economic Development Rate Program

This program gives special utility discounts for businesses that require high-energy loads to operate, or continue operating, in California. In Central Valley, Pacific Gas & Electric offers a reduction of commercial and industrial electrical rates of up to 25% for up to five years.

Self-Generation Incentive Program

This program provides rebates for qualifying distributed energy systems installed on the customer’s side of the utility meter. Qualifying technologies include wind turbines, waste heat to power technologies, pressure reduction turbines, internal combustion engines, microturbines, gas turbines, fuel cells, and advanced energy storage systems.