6. Incentives For Your Business
Our EDB staff works directly with local businesses to connect you with important tax incentives and hiring incentives.
How We Can Help
EDB Staff works directly with Sonoma County businesses to identify possible tax incentives and provide useful tops on the application process. In 2015, we helped local business obtain over $3.5 million in tax credits, exemptions and training subsidies.
California Competes Tax Credit
The California Competes Tax Credit is an income tax credit designed to help businesses stay in California by encouraging investment and the creation of new well-paying jobs. More than $200 million has been set aside by the state for fiscal year 2015-16. Detailed information on how businesses can qualify for this tax credit, visit the State of California's California Competes Tax Credit page.
- In 2016, EDB Staff directly assisted Sonoma County businesses in obtaining over $3.6 million in California Competes tax credits. Nieco Corporation, a manufacturer of commercial-grade broilers for the restaurant and hospitality industry, located in Windsor, CA, recently received California Competes funding for their planned expansion.
- In 2015, the EDB helped local business obtain over $2.1 million in tax credits
Manufacturing and Research and Development Exemption
Launched in July 2014, the Manufacturing and Research and Development Tax Exemption offers a partial reduction in state sales and use taxes for certain equipment purchases and leases.
Currently, the State of California imposes a statewide sales and use tax rate of 7.5% (plus applicable district tax) on sales and leases of property. With the Manufacturing and Research and Development Tax Exemption, eligible businesses would only pay 3.3125% of the statewide sales and use tax, saving $41.88 for every $1,000 in purchases of qualifying property.
The partial tax exemption is available to businesses in the following the North American Industry Classification System (NAICS) business categories:
- Manufacturing: NAICS codes 3111–3399
- BioTech Research and Development: NAICS 541711
- Physical, Engineering, and life sciences R&D: NAICS 54171
Certain equipment purchases and leases qualify for the partial sales tax exemption. They can include machinery and equipment; equipment and devices used or required to operate, control, regulate, or maintain the machinery; pollution control items; and certain special purpose buildings and foundations.
Use of Property
To qualify for the exemption, the property must be used 50 percent or more in one of the following activities:
- Manufacturing, processing, refining, fabricating, or recycling tangible personal property
- Researching and developing
- Maintaining, repairing, measuring, or testing any qualified property