Tax Credits & Incentives
The Central Market Street and Tenderloin Area Payroll Expense Tax Exclusion (the “Exclusion”) permits persons maintaining a fixed place of business within the Central Market Street and Tenderloin Area (the “Area”) and that meet the requirements of section 906.3 of the Business and Tax Regulations Code (the “Code”) to exclude a portion of their payroll expense from the payroll expense tax base for up to six years from the later of May 20, 2011, and the date the person commenced business in the Area. However, the Exclusion expires on May 20, 2019, and may not be taken after that date.
The City of San Francisco provides a payroll expense tax exclusionfor up to 10 years to eligible clean technology companies located in the City.Any business that employs fewer than 100 employees is eligible for thepayroll tax exclusion.
The SF Film Office offers the "Scene in San Francisco" rebateprogram, in which qualifying productions are eligible for a refund ofall payroll tax and city fees up to $600,000 per production.
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 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.
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.
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, 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.
The US Department of the Interior supports the preservation ofhistoric buildings through federal tax incentives, including a 20% taxcredit for the certified rehabilitation of historic structures, and a10% tax credit for the rehabilitation of non-historic buildings builtbefore 1936.
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.
Please note: New applications are no longer being accepted for the tax incentives listed below.
Payroll Expense Tax Biotechnology Exclusion
Businesses that qualified for the San Francisco Payroll Expense Tax Biotechnology Exclusion before the end of the application period must annually file this affidavit in order to claim the benefits of the exclusion. An affidavit must be submitted no later than January 31 of each year for which the exclusion will be claimed.
State Enterprise Zone
The California Legislature has ended the Enterprise Zone program. Qualifying businesses were able to apply for and receive voucher certificates until December 31, 2014 (for qualified hires made through December 31, 2013). For more information, please visit the California Department of Housing and Community Development.
San Francisco Enterprise Zone Payroll Expense Tax Credit
Because the state’s Enterprise Zone hiring credit was repealed effective January 1, 2014, taxpayers can no longer qualify for San Francisco’s Enterprise Zone Payroll Expense Tax Credit with respect to employees hired on or after January 1, 2014. You can read more about the credit here.
*Maps and street listings of San Francisco’s Enterprise Zones may be found here.
Stock Based Compensation Payroll Expense Tax Exclusion
The Stock-Based Compensation Exclusion (the “Exclusion”) allows eligible persons to exclude from taxation stock-based compensation (defined below) above certain thresholds for tax years 2011 – 2017.