Business Incentives & Best Practices

California Resources

 

Tax Incentives:

AB 777A property tax exemption for equipment and fuel used in space flight. This exemption is operative from January 1, 2014 to January 1, 2024. For more information, please visit http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201320140AB777.

Manufacturing and R&D Partial Sales and Tax Exemption – Partial sales and use tax exemption on certain manufacturing and research and development equipment purchases and leases. For more information, please visit https://www.cdtfa.ca.gov/industry/manufacturing-exemptions.htm#Overview.

California Competes Tax Credit Businesses that plan to relocate to, or expand in California are eligible for an income tax credit. To receive the credit, businesses must negotiate a five year tax credit agreement with The Governor’s Office of Business and Economic Development (GO-Biz) and must meet investment and hiring targets outlined in that agreement. For more information, please visit http://www.business.ca.gov/Programs/CaliforniaCompetesTaxCredit.

 

Education & Training:

Community College Economic and Workforce Development in California – Program in which industry experts from the California Community Colleges are available to help employers gain access to career education and training, industry specific services, grant funded initiatives and technical assistance. For more information, please visit http://dwmforbusiness.com/.

 California Apprenticeship Initiative Grant opportunity intended to support the creation of new apprenticeships and pre-apprenticeship training programs. Four grant opportunities are available under the Initiative including the:

  1. California Apprenticeship Initiative New Innovative Program Grant,
  2. California Apprenticeship Initiative Pre-Apprenticeship Program Grant,
  3. California Apprenticeship Initiative Accelerator Program Grant, and
  4. California Apprenticeship Initiative Technical Assistance Grant.

For more information, please visit https://foundationccc.org/What-We-Do/Workforce-Development/Workforce-Services/California-Apprenticeship-Initiative.

Employment Training Panel (ETP) – Funding agency that helps businesses gain access to funds for worker training. Businesses determine their own training needs and methods and the ETP staff can assist agencies in applying for funds. For more information, please visit https://etp.ca.gov/.

 

Loan/ Bonds:

Industrial Development Bond (IDBs) Financing Program Bonds that provide manufacturing and processing companies low-interest financing for acquisition of land, building construction, building renovation and the purchase of machinery and equipment. For more information, please visit http://www.treasurer.ca.gov/cidfac/idb.asp.

 

Enterprise Zones:

Local Agency Military Base Recover Areas (LAMBRAs) Program that allows businesses located in a LAMBRA to qualify for special tax incentives including hiring credits, sales or use tax credits, business expense deductions, and net operating loss deductions. Current LAMBRAs include the Southern California International Airport, Castle Air Force Base, Mare Island Naval Base, San Bernardino International Airport and Trade Center, Alameda Naval Air Station, Mather Field/ McClellan Park, Liberty Station, and Tustin Marine Corps Air Station. For more information, please visit https://www.ftb.ca.gov/forms/misc/1118.pdf.

 

Recruiting:

California Employment Development Department (EDD) – Employers can enter job listings, browse resumes and find qualified workers through EDD’s CalJobs system. For more information, please visit http://www.edd.ca.gov/Employer_Services.htm.

 

Other:

AB 427 – A bill now being considered in the Legislature would create a 17-member California Aerospace and Aviation Commission to promote the industries within the state. For more information, please visit https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB427


Other States: Best Practices & Guide for Future Opportunities

 

Tax Incentives:

Aerospace Manufacturers Reduced B&O Tax Rates Manufacturers of commercial airplanes, commercial airplane components, and tooling used in the production of commercial aircraft receive a preferential B&O tax rate of 0.2904 percent. The general tax rate for manufacturing is 0.484 percent. For more information, please visit https://dor.wa.gov/find-taxes-rates/tax-incentives/incentive-programs#1122. (Washington)

Aerospace preproduction expenditures B&O tax credit – Businesses engaged in aerospace product development are eligible for a B&O tax credit equal to 1.5% of qualified expenditures. Qualified expenditures include research, design and engineering costs incurred in the development of aerospace products. For more information, please visit https://dor.wa.gov/find-taxes-rates/tax-incentives/incentive-programs#1122. (Washington)

Retail Sales and Use Tax Exemption for ComputersComputer hardware, software, and peripherals used to engineer, design, or develop aerospace products and services are exempt from retail and sales tax. Labor and service charges accrued for equipment installation is also tax exempt. For more information, please visit https://dor.wa.gov/find-taxes-rates/tax-incentives/incentive-programs#1122. (Washington)

Property and Leasehold Excise Tax B&O Tax CreditsProperty tax and leasehold excise tax credit paid on land and buildings used exclusively in manufacturing commercial airplanes or component parts of commercial airplanes. For more information, please visit https://dor.wa.gov/find-taxes-rates/tax-incentives/incentive-programs#1122. (Washington)

Mississippi Aerospace Initiative Incentives programBusinesses that manufacture aerospace products or that provide research and development or training services to the aerospace industry may be exempt from state taxes for ten years.  State taxes include sales or use tax related to the purchase of building materials and equipment for initial construction of facilities or expansion, income tax, franchise tax imposed on the value of capital used, invested or employed by the business, and sales or use tax imposed on the lease of machinery and equipment acquired in the initial construction or expansion of the facility. For more information, please visit http://www.dor.ms.gov/Laws-Rules/Documents/2017%20Incentive%20Book.pdf. (Mississippi)

Digital Interactive Media and Software Development Incentive Louisiana companies producing digital interactive media products or platforms, including aerospace-specific applications such as navigation, communications, radar, defense and other embedded systems, may be eligible for a 25% tax credit on qualified payroll for in-state labor and 18% for qualified production expenditures. For more information, please visit https://www.opportunitylouisiana.com/business-incentives/digital-interactive-media-and-software-development-incentive. (Louisiana)

Louisiana Industrial Ad Valorem Tax Exemption Program (ITEP)Louisiana manufacturers are eligible for a 100% property tax abatement for up to five years on qualifying capital investments. Manufacturers also have the option to renew for up to three additional years at up to 80% property tax abatement. For more information, please visit https://www.opportunitylouisiana.com/business-incentives/industrial-tax-exemption. (Louisiana)

Manufacturing Reinvestment Account (MRA) Program – Connecticut manufacturers with 150 or fewer employees may establish a tax deferred Manufacturing Reinvestment Account with a participating Connecticut Bank. Eligible companies can deposit up to $100,000 annually, or 100% of their domestic gross receipts, which are fully exempt from corporate and personal income taxes for up to five years. Account funds must be used for worker training or the purchase of manufacturing machinery, equipment, or facilities. For more information, please visit http://www.ct.gov/ecd/cwp/view.asp?a=3931&q=462618&ecdNav.  (Connecticut)

Manufacturing Apprenticeship Tax Credit Any taxpayer who employs an apprentice under a qualified Manufacturing Program is eligible for a tax credit applied against the Connecticut Corporate Business Tax. This tax credit seeks to encourage a trained, skilled workforce. Taxpayers are entitled up to $7,500 maximum or 50% of actual wages for each eligible apprentice. For more information, please visit http://www.ctdol.state.ct.us/progsupt/appren/taxcr1.htm. (Connecticut)

Service and Manufacturing Facilities Tax Credit – Manufacturing Facilities or Service Facilities that meet certain employment criteria may be eligible for a tax credit applied to the Connecticut corporation business tax. The amount of the tax credit varies depending on the location of the facility and the number of employees. For more information, please visit http://www.ct.gov/drs/cwp/view.asp?a=3807&q=522228. (Connecticut)

 

Education & Training: 

Washington Aerospace Training and Research Center- Academic institution managed by Edmonds Community College that specializes in industry-driven training to support the Washington aerospace industry. The Center also provides customized training for companies, acts as a testing site for the National Career Readiness Certificate, and offers students guidance in their job search. For more information, please visit http://washingtonaerospace.com/index.htm. (Washington)

The Aerospace Loan Program (ALP) – Program that provides low-interest loans to Washington students who have been accepted into the Washington Aerospace Training and Research Center Program located at the Everett-based campus. For more information, please visit http://washingtonaerospace.com/financial.htm. (Washington)

Aerospace Joint Apprenticeship Committee (AJAC) – A Washington state-funded, non-profit aerospace and manufacturing apprenticeship training program. This programs allow employees to learn a living wage, receive on the job training and work towards an associate’s degree while enabling employers to increase their workforce skills. For more information, please visit https://www.ajactraining.org/wp-content/uploads/AJAC-Apprenticeship-Standards-January-2016.pdf. (Washington)

Everett Community College (EvCC) – Community College at the forefront of aerospace and engineering education. EvCC partners with Boeing and offers employees professional continuing education, certificates, and degree programs. For more information, please visit http://www.everettcc.edu/. (Washington)

 

Loan/ Bonds: 

The Connecticut Manufacturing Innovation Fund State Fund administered by the Department of Economic and Community Development to entities dedicated to the advancement of manufacturing. Funds support innovation, strengthen the supply chain network, and ensure continuous workforce development. For more information, please visit http://www.ct.gov/ecd/cwp/view.asp?a=4669&q=551472. (Connecticut)