There are a variety of incentives for advanced transportation companies as well as users in the state of California. For more information on incentives for purchase, please go here.
We’ve listed a few of the incentives for companies below. If you have an interest in location to the Southern California region and would like more information, please contact the LAEDC at [email protected] .
Sales & Use Tax Savings on Purchases
• The California Sales and Use Tax Exclusion offers a full sales and use tax exclusion (between 7.5% and 10% statewide) for advanced manufacturing and advanced transportation technologies.
• The California Sales and Use Tax Exemption offers a partial sales and use tax exemption (4.2%) for manufacturing, processing, refining, fabricating, or recycling as well as research and development purchases.
• The California Competes Tax Credit is an income tax credit made available to businesses that want to locate to and grow in California. The annual budget for this program is $150 million with designated application periods.
• The California Research and Development Tax Credit is a 15% credit for qualified in-house research expenses and a 24% credit for basic research payments to an outside organization are offered to companies that conduct qualified research activities in California. A federal research credit is also available.
• The California New Employment Credit is available to companies in designated geographic areas of the state who have a net increase in employment and hire qualified employees. The tax credit is up to 35% of qualified wages.
• Los Angeles Empowerment Zone and Renewal Community allows for tax credits between $1,500 and $3,000 for eligible businesses in these zones that hire local residents.
• New Markets Tax Credit permits individual and corporate investors to receive a federal tax credit (39% of total investment amount claimed over seven years) in exchange for making equity investments in Community Development Entities.
• The federal government also offers a general business credit and investment credit.
Property Tax Relief
• The Capital Investment Incentive Program provides for property tax rebates beyond the first $25 million of assessed property for industry codes 3364 (Aerospace Products and Parts Manufacturing) and 3359 (Other Electrical Equipment and Component Manufacturing), subject to approval by local jurisdictions.
• Foreign Trade Zones are federally designated areas where companies can delay or reduce duty payments on foreign merchandise. There are two types of Foreign Trade Zones, general purpose and subzones (the latter is for a specific company or use).
• IC-DISC is a federal tax incentive for exporters of products made in the U.S.
• Export-Import Bank finances the export of U.S. goods and services to international markets by providing working capital guarantees (pre-export financing); export credit insurance; and loan guarantees and direct loans.
• Each utility offers energy efficiency programs and/or incentives on water, electricity, and gas. These incentives and programs can reduce your cost of operation with little to no effort.
• Commercial PACE Financing offers the opportunity for owners of their facility to improve the energy profile of a building (and reduce operating costs) through financing all energy efficiency improvements on their property tax bill.
• California Industrial Development Bonds offer tax-exempt securities of up to $10 million for the acquisition,construction, rehabilitation and equipping of manufacturing and processing facilities for private companies.
• The California Capital Access Program encourages financial institutions to make loans to small businesses that fall just outside their conventional underwriting standards by insuring up to 100% coverage on certain loan charge offs. Also as part of this program, Collateral Support pledges cash to cover the collateral shortfall of loans of $100,000 or more and provides up to 40% of the loan value, with the possibility of an additional 10% for businesses located in a Severely Affected Community.
• California Pollution Control Financing Authority Tax-Exempt Bond Financing Program provides tax-exempt bond financing to California businesses for the acquisition, construction, or installation of qualified pollution control, waste disposal, waste recovery facilities, and the acquisition and installation of new equipment.
• California Small Business Loan Guarantee Program provides loan guarantees for small businesses that can cover
• Small Business Administration Loan Programs include general small business loans (7(a)), microloans, real estate and equipment loans, CDC/504, and disaster loans.
• County of Los Angeles Commercial and Industrial Loan Programs include the County Business Loan Program, County Business Expansion Loan Program, County Technology Loan Program, County Utility Loan Program, Countywide County Float Loan Program, and County Float Loan Program.
• EB-5 Financing provides foreign nationals the opportunity to become conditional residents for a period of two years upon making an investment of $1 million, or $500,000 in a designated Targeted Employment Area, in a new commercial enterprise. Each unit of investment must create at least ten new, direct or indirect jobs for U.S. workers. The LAEDC partners with CanAm to provide this financing opportunity.
• Advanced Technology Vehicle Manufacturing loan program – federal program to support the development of vehicles and components in the U.S.