Incentives
Below are descriptions of incentives provided by California, by the City and County of San Francisco, and by the federal government to encourage new business in the San Francisco Bay Area. For additional information regarding incentives, please click here or contact SFCED.
CALIFORNIA INCENTIVES
Enterprise Zones
The San Francisco Enterprise Zone (EZ) is a geographical area designated by the State of California as being eligible for State Income tax credits and financial incentives. This partnership between state and local government and private business can save businesses-small and large-thousands of dollars.
CA Enterprise Zone Tax Benefits
- Up to $36,000 in state income tax credits for each qualified employee hired over five years
- Sales and use tax credits on purchases of qualified machinery and parts-including computer, data processing, telecommunications equipment, and some items relating to the production of renewable energy resources
- Up-front expensing on certain depreciable property
- Application of unused tax credits to future tax years
- Preference points on state contracts
- Up to 100% Net Operating Loss (NOL) carry-forward: NOL may be carried forward 15 years
- Net interest deduction for Zone business lenders
California New Hire Tax Credit
About the credit:- Effective for taxable years beginning on or after January 1, 2009.
- A new tax credit of $3,000 for each additional full-time employee hired is available to small businesses with 20 or less employees beginning January 1, 2009.
- The credit must be claimed on a timely filed original return received by the Franchise Tax Board on or before a cut-off date specified by the Franchise Tax Board.
To qualify
An employer will qualify for the credit if:
- Each qualified full-time hourly employee is paid wages for a minimum of 35 hours per week.
- On the last day of the preceding taxable year, they employed a total of 20 or fewer employees.
- There is a net increase in full-time employees compared to the number of full-time employees employed in the preceding taxable year.
An employer may not claim the credit for those employees who are any of the following:
- Certified as a qualified employee in an enterprise zone, targeted tax area, a manufacturing enhancement area, or a local agency military base recovery area.
- An employee whose wages are included in calculating any other credit allowed.
- Claim the credit on a 2009 Personal Income Tax or Business Entity Tax Return using the credit from the New Jobs Tax Credit
Employment Training Panel
The Employment Training Panel (ETP) is a business and labor-supported agency that assists employers in strengthening their competitive edge by providing funds to offset the costs of job skills training needed to maintain high-performance workplaces. The program is funded by the Employment Training Tax paid by California employers. It targets firms threatened by out-of-state and international competition. For more information contact ETP's Economic Development (916) 327-5262.
- ETP is performance-based, providing funds for trainees who successfully complete training and are retained in well-paying jobs for a specific period of time.
- Employers match training funds awarded by ETP for training existing workers.
- ETP funds training for unemployed workers.
CITY & COUNTY OF SAN FRANCISCO INCENTIVES
Biotechnology
San Francisco offers a local Payroll Tax Exemption from the current 1.5% tax for up to 7.5 years to qualified businesses engaged in biotechnology research and development.
Clean Technology
San Francisco offers a local Payroll Tax Exemption for up to 10 years for qualified businesses with more than 10 employees and less than 100. Firms engaged in production, installation and related clean energy development may qualify.
San Francisco offers a program where property owners can finance energy saving projects on their property by repaying the cost of the project through their property taxes
Film and Television Rebate Program
San Francisco offers a refund on all San Francisco Payroll Tax (1.5%) and a portion of hotel and sales tax paid to the City during production of a feature film or television program.
Payroll Tax Credit for businesses that have created new job jobs filled by individuals belonging to one or more of the following targeted groups: participants in a Workforce Investment Act (WIA) program or County Adult Aid Assistance Program, or those eligible or certified for the Workforce Opportunity Tax Credit. This is a ten year declining scale tax credit against the San Francisco Payroll Tax expense for new jobs created on or after Jan. 1, 1992.
Several changes to the original ordinance were adopted in July 2008. For employees hired on or after July 30, 2008 the amended ordinance does not require creation of a new job and changed the qualifications of the employees in several ways. Please refer to the "EZ Payroll Tax Credit Exemption Information" booklet available in the download section of this page for details. To see if your business is located within the amended boundaries of the Enterprise Zone, please refer to the boundary map or address listing
San Francisco EZ Map
San Francisco EZ Street Names
The San Francisco Human Services Agency (SF-HSA) is using newly available federal stimulus funds to expand subsidized employment opportunities, with a goal of placing 1,000 participants in jobs between May 2009 and September 2010. This new program is called JOBS NOW!
Consistent with the goals of the federal stimulus package, the primary objectives of the JOBS NOW! program are to provide an immediate source of income for low-income families and to stimulate local economic recovery. JOBS NOW! builds upon several successful transitional jobs programs already in place at SF-HSA, which were designed to help unemployed individuals address barriers to employment, develop soft skills, gain work experience and progress toward self-sufficiency. JOBS NOW! participants will exit the program with stable employment history, leaving them better positioned to obtain an unsubsidized job when the stimulus period ends. The JOBS NOW! program benefits local employers by providing referrals of qualified workers and by subsidizing 100% of their wages until September 30, 2010. It's a win-win!
Information for Private and Nonprofit Employers
Information for City Department Employers
FEDERAL INCENTIVES
The Economic Stimulus Act offers two business incentives for 2008:
- Depreciation of 50% of equipment purchased in 2008
- Expanse up to $250,000 in equipment and fixtures purchased in 2008
Federal Work Opportunity Tax Credit
Purpose:To promote the hiring of individuals who qualify as a member of a target group.
Amount:Up to $9,000
Overview:A credit against federal taxes available to any business that hires individuals from a target group of at-risk individuals. Tax credits can be carried forward for up to 20 years and carried back one year.
Qualifications:A business may qualify for the Work Opportunity Tax Credit if an employee is a member of a designated target group and meets that group's specific requirements. Employees who qualify the employer for the WOTC automatically qualify a business located in an Enterprise Zone. For a list of qualified hires click here
Federal Renewal Community Tax Credit
Purpose:To stimulate economic development in economically distressed areas, and to encourage businesses to open, expand and hire local residents.
Amount:Up to $1,500 per qualifying employee per year.
Overview:A set of special incentives for businesses that are located in a renewal community, including a credit against federal taxes for hiring employees who live and work in the same renewal community. Other benefits include no tax on capital gains and accelerated depreciation through Commercial Revitalization Deductions, and more.
Geography:The Federal Renewal Community for San Francisco includes parts of the Financial District, Chinatown Tenderloin and SoMa Districts. (See map below)
Qualifications:A business qualifies for renewal community tax credits if it is located within the renewal community and employs a worker who resides in the same renewal community.
Renewable Communities
San Francisco is a designated Renewable Community. For more information call 1-800-998-9999 or click here.
For more information on tax credit services provided by our Chamber affiliate SF Works, please visit www.sfworks.org/taxcredits.