Richmond enables businesses to save thousands – even millions – of dollars through a variety of tax credits and cost reductions.
Targeted Employment Area Tax Credits
Businesses hiring a resident from a state-recognized Targeted Employment Area (TEA) can immediately qualify for these benefits. TEA credits are available for hires in several Richmond neighborhoods.
Hiring Tax Credit: Richmond businesses that hire prior to January 1, 2014 may reduce state income tax by a percentage of wages paid to one or more qualified employees.
Sales & Use Tax Credit: Corporations may earn sales tax credits on purchases of up to $20 million per year on qualified machinery or machinery parts used in the TEA. Partnerships and individuals may annually claim a credit on the first $1 million of qualifying purchases
Business Expense Deductions: A business may deduct up to $20,000 of the cost of qualifying business equipment, furniture and fixtures or other depreciable personal property.
Net Operating Loss Carryover: Businesses may carry forward up to 100% of Net Operating Loss for 15 years.
Interest Deduction for Lenders: Lenders to TEA businesses may deduct direct expenses incurred in making the loan from the interest income, which may translate into more favorable rates or terms for the borrower.
Former Enterprise Zone Program Participants: Participants may continue using Enterprise Zone carryover credits for 10 years and continue to earn hiring credits for employees hired prior to January 1, 2014.
More Tax Credits
On-the-Job Training (OJT): Businesses may be reimbursed up to 50% of the wages paid to a new hire during the initial training period (up to 6 months). OJT focuses on jobs involving new technologies, production and services. For more, contact Business Services at 510-307-8014.
Specialized Hiring Credits: Businesses that hire long-term unemployed workers, veterans with 12 months separation from service, people receiving federal earned-income tax credit, ex-offenders and recipients of CalWORKS or general assistance may receive credits for up to five years. Credits are only allowed for a net increase in jobs for hires between January 1, 2013 and January 1, 2021.
Manufacturing Equipment Sales Tax Exemption: Businesses engaged in manufacturing or biotechnology research may exclude the first $200 million in equipment purchases for the state share of sales tax (4.19%) beginning July 1, 2014.