SMG Business Services
Proactive, Preventive, & Customized Business Services
AdobeStock_229074283.jpeg

Blog

Proactive, Preventive & Customized Business Services

CALIFORNIA INCENTIVES, SUBSIDIES, AND PROGRAMS FOR BUSINESS OWNERS

If you are a Californian, aside from being an expensive estate to live is also a great state to have a business although is one of the toughest states due to many taxes and regulations. But California also gives subsidies, incentives and loans to help small business owners. The state has made more business subsidies available in recent years that have made people feel better about having a business. But, there is still many business owners who don’t know they have the right to tax breaks or grant programs.

If you feel you are a business owner who is not aware of some of these programs, the following are some state incentives that companies can go after:

Straight Subsidies

  • California Competes tax credit: Businesses of all sizes that want move to California or have another location here can apply for credits to offset income taxes. Companies that can prove they’re supplying well-paying jobs that could play a powerful role in their regional economies are most likely to get the handout. Available tax credits will rise to $200 million annually.

  • Tax exemptions for manufacturers: Some manufacturers and research and development firms have been able to claim a roughly 4.2 percent sales tax exemption for new equipment. Facility upgrades can also qualify for this break in some cases.

  • New Employment Credit: This incentive encourages companies to hire veterans, ex-felons or unemployed persons for at least six months.

  • Research & Development Tax Credit: This credit is similar to a federal version that saves research firms some cash. This program allows companies to get a cutback on their income and franchise taxes associated with 15 to 24 percent of research expenses, depending on the makeup of their company. This can cover wages, supplies and contract cost.

  • Advanced Transportation and Alternative Source Manufacturing Sales & Use Tax Exclusion Program: Companies can apply to avoid paying sales and use taxes associated with purchases for projects that involve energy-efficient transportation or alternative energy source products.

State Help

  • The California Capital Access Program pushes banks to provide loans to small businesses that may struggle to get financing. The Collateral Support Program pledges $50,000 to as much as $2.5 million per business in collateral, or money promised if the business can’t make payments. This allows companies to collect bank loans they might not otherwise be eligible to receive.

  • The state also provides financing for manufacturing facility purchases via bonds and loans that aid small companies with startup costs, expansion costs, construction and more.

Environmental Incentives

  • There is at least 12 loans, grants and tax rebate programs to encourage California businesses to invest in green technology or environmentally friendly practices. They include everything from a rebate that gives companies thousands of dollars to purchase hybrid electric vehicles to an energy innovations grant that can provide up to $150,000 for alternative energy projects that attempt to address statewide utility concerns.

By UNIKO Media Group