Federal

  • Work Opportunity Tax Credit (WOTC) Extended
    • The American Taxpayer Relief Act of 2012 (ATRA) extends the Work Opportunity Tax Credit (WOTC) for hiring certain workers through Dec. 31, 2013. ATRA extends the WOTC for qualified veterans hired before Jan. 1, 2014. ATRA also extends the WOTC for targeted group members, other than qualified veterans, hired after Dec.31, 2011, and before Jan.1, 2014. Information for mailing certification requests may be found on the CA Employment Development Department website at http://www.edd.ca.gov/jobs_and_training/Work_Opportunity_Tax_Credit.htm
  • Business Tax Credits
    • Your general business credit for the year consists of your carryforward of business credits from prior years plus the total of your current year business credits. In addition, your general business credit for the current year may be increased later by the carryback of business credits from later years. You subtract this credit directly from your tax. For more detailed information, please refer to the provided link above.
  • Small Business Healthcare Tax Credit
    • For tax years 2010 through 2013, the maximum credit is 35% for small business employers and 25% for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan 1, 2014. Additional information about the enhanced version will be added to IRS.gov as it becomes available. In general, on Jan. 1, 2014, the rate will increase to 50% and 35%, respectively.

State

  • New Jobs Credit
    • A new tax credit of up to $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 is prorated on an annual full-time equivalent basis for employees employed less than a full year.
    • The credit is not subject to the 50% limitation for business credits.
    • The total amount of credit available to be claimed by all taxpayers is capped at $400 million.
    • 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.
    • Taxpayers claiming the credit on an original return received by the Franchise Tax Board after the cut-off date is met will be notified that the credit has been denied.
    • Taxpayers that have been denied the credit as a result of the cut-off date being reached will not be assessed an underpayment of estimated tax or underpayment of tax penalty to the extent the underpayment was created or increased by the disallowance of this credit.

Santa Clara County

  • Foreign Trade Zone
    • The U.S. Foreign Trade Zone Program is one of the nation’s earliest attempts to stimulate economic development and facilitate global trade and commerce.  The U.S. Congress passed the Foreign Trade Zone Act in 1934.  The Foreign Trade Zone program has enhanced global competitiveness for U.S.-based companies, particularly for firms engaged in manufacturing or production.
    • The City of San Jose received the Foreign Trade Zone grant of authority from the federal government in 1974 – the 18th Foreign Trade Zone established in the U.S.  The City of San Jose contracts with San Jose Distribution Services, a private warehouse and logistics company, to operate the General Purpose Foreign Trade Zone.  The General Purpose Zone is located at 2055 South Seventh Street, Suite A in San Jose’s Monterey Corridor industrial area.
    • As the grantee, the City of San Jose is responsible for administering the Foreign Trade Zone in Santa Clara, Monterey, San Benito and Santa Cruz counties, and the southern part of Alameda and San Mateo counties.
  • Water Efficient Technologies (WET)
    • The Water Efficient Technologies (WET) program offers rebates of up to $50,000 per water efficiency project to businesses that discharge to the San Jose/Santa Clara Water Pollution Control Plant. The Plant's service area includes San José, Santa Clara, Milpitas, Campbell, Cupertino, Los Gatos, Monte Sereno, and Saratoga. WET is sponsored by the Plant and the Santa Clara Valley Water District.

City of San Jose

  • Enterprise Zone
    • California's Enterprise Zone program was established in 1984 to stimulate business investment in depressed areas of the State and create job opportunities for Californians. Today, both businesses and workers located in Silicon Valleys only Enterprise Zone, continue to benefit from the program. San Jose's Enterprise Zone is a 12-square mile area in the heart of Silicon Valley, and businesses located here are eligible for significant tax savings as well as other incentives including:
      • Sales and Use Tax Credits - Purchases of machinery and equipment used to fabricate or manufacture a product in the Enterprise Zone are eligible to earn a 8.25% tax credit on state income tax. (The 8.25% is true - only if the equipment was bought in San Jose or a city that has 8.25% sales tax rate). The exact percentage can vary based on what city or state the purchase was made. Corporations may claim a credit equal to the sales and use tax paid or incurred on the first $20 million of the cost of equipment purchased or leased. Corporations and individuals may claim the credit for up to $1 million in cost.
      • Hiring Tax Credits - Businesses hiring persons from one of 13 eligibility categories may claim tax credits on wages paid to those employees for five years. In the first year, a company can claim 50% of an employee's wage. The company can claim 40% in the second year, 30% in the third year, 20% in the fourth year and 10% in the fifth year. There is a maximum wage allowance of 150% of the current minimum wage rate; as established by the Industrial Welfare Commission. As the minimum wage increases so does your tax credit.
      • Business Expense Deductions - A deduction of up to $20,000 is available for certain tangible property used exclusively in the Enterprise Zone.
      • Net Operating Loss Carryover - 100% of net operating losses can be carried over up to 15 years to reduce the amount of taxable income levels paid in subsequent years.
      • Net Interest Deduction for Lenders - Lenders may receive a tax deduction on the amount of "net interest" earned on loans made to businesses located in the Enterprise Zone.
  • Special Tenant Improvement Program in Vacant Buildings
    • The Special Tenant Improvement Program (STI) was established to encourage companies to locate in vacant buildings within industrial and r&d uses, as well as office space in the Downtown Core. The program offers expedited plan review and plan check.

City of Morgan Hill

  • Grow Morgan Hill Fund
    • Can be used City wide and provides qualified small business with SBA 7(a) loans.
    • Other Loan Programs are on hold.
  • Small Business Fee Deferral Program
    • The Morgan Hill Redevelopment Agency has developed the Small Business Fee Deferral Program in an effort to foster commercial and industrial development by helping to minimize the potential burden of City impact fees (e.g., sewer, traffic, and in-lieu utility under grounding and water fees) on new construction, expansion, or relocation projects.
  • Utility Undergrounding Fee Deferral Program
    • In general terms, the program enables new and expanding businesses to defer up to 80% of their utility undergrounding fees for a period not to exceed five years. Eligible property owners must pay a minimum of 20% of their utility undergrounding fees prior to obtaining building  permits. The balance would be financed under the Program as a normally amortized loan requiring equal monthly payments over a term that would not be longer than 5 years. Interest, at the Local Agency Investment Fund (LAIF) rate plus ½% at the time the loan was initiated would be incorporated into the payments. Prepayment is permitted without penalty.

City of Gilroy

  • City of Gilroy Jobs Offset Program
    • Industrial businesses that generate new jobs may be eligible for a jobs offset incentive. In order to qualify, the business must create at least 25 permanent full-time jobs within two (2) years of the opening of the new business. A credit of up to $4,000 per job may be granted for each job that has any combination of annual salary and benefits of at least $45,000.
    • The number of jobs created and the salary and benefit package minimums must be met for three consecutive years following the initial attainment of the guaranteed employment level. The credit must be applied against the development fees due for the project, and may not exceed the amount of the development fees due from the new business. If the salary and benefit package minimums are not met or are not maintained for three (3) consecutive years following the initial attainment of the guaranteed employment level, the business shall pay to the City the amount of the credit per job multiplied by the number of jobs by which the business falls short, plus interest at the highest yield rate in the City's investment portfolio.
  • City of Gilroy Tax Offset Program  
    • Single Businesses
      • In the case of sales tax, the business must generate at least $50,000 in sales tax revenue to the City annually. The total offset may be accumulated for a period not to exceed three (3) years. The three-year period will commence upon the issuance of the certificate of occupancy for the business. The tax offset must be applied against the development fees due for the project, and may not exceed the amount of development fees plus interest thereon due from the new business. 
    • Commercial or Industrial Centers
      • In the case of sales tax, a single center comprised of multi-tenant businesses may qualify for the incentive if it collectively generates an average of at least $50,001 in sales tax revenue to the City annually.\
      • The amount of sales tax generated by the multi-tenant center must: (1) exceed amount $50,000 annually when averaged over a three year period, and (2) be equal to an amount of $2.00 or more per gross square foot of the multi-tenant center building area in excess of 25,000 square feet. The total offset may be accumulated for a period not to exceed three (3) years. The three-year period will commence one year from the issuance of the first certificate of occupancy to occupy a space at the center. The tax offset must be applied against the development fees due for the project, and may not exceed the amount of development fees plus interest thereon due from the commercial/industrial center.
    • Multi-tenant/Owner Industrial Developments
      • Developers of multi-tenant/owner industrial buildings may be eligible for a job-offset credit if the businesses that will ultimately occupy the multi-tenant/owner building employ a cumulative total of at least 25 permanent employees that meet the minimum wage and benefit requirements stated above.
      • The minimum employment level must be met within two (2) years of the issuance of the first certificate of occupancy for the first building. The minimum 25 permanent employees that meet the wage and benefit package must be maintained for a minimum of three (3) consecutive years following the initial attainment of the guaranteed employment level.