Greater Sacramento and the State of California offer a range of business incentives for those looking to relocate or expand. There are multiple programs at the local and state level offering tax credits, grants, talent assistance, expedited permitting and more. Contact our team to learn more about these programs and obtain free assistance navigating the application processes.
Greater Sacramento business incentives
Local jurisdiction incentives
Greater Sacramento utility incentives
Sacramento Municipal Utility District (SMUD)
Economic Development Rate
SMUD’s Economic Development Rate Program provides rate reduction over the first 10 years of a new project’s lifetime. Multiple options exist including a taper rate beginning at 6% in year one, beginning to taper in year six or a flat 4.5% rate discount across the 10-year period. Additional rate discounts are given to businesses located in disadvantaged communities. Rates are granted on a per-project basis.
Electrification and Energy Efficient Design
SMUD’s electrification and integrated design incentives provide up to $250,000 toward energy efficient design for buildings and systems.
Learn more
Workplace Electric Vehicle Charging Station Grant
This incentive grants $4,500 per handle toward installation of Level 2 EV chargers. SMUD also offers special low rates to commercial customers for PEV charging.
Learn more
PG&E
Economic Development Rate
For new business customers and existing customers looking to expand operations, PG&E offers an economic development incentive which provides a 12% discount on electricity for five years.
Learn more
State of California business incentives
California tax credits and exemptions
California Competes Grant
The California Competes Grant is available to businesses that want to locate or stay and grow in California. A total of $120 million in California Competes Grant funds are available for allocation in the 2021-2022 fiscal year. The maximum grant award is $36 million. The Grant is available to businesses of any size that meet at least one of the following criteria: create at least 500 new full-time jobs in California, make capital investmets of at least $10 million or establish in an area of high unemployment and/or poverty as defined in the California Competes Tax Credit regulations. Others requirements apply.
California Competes Tax Credit
The California Competes Tax Credit (CCTC) is available to businesses that want to locate in California or existing California businesses that want to stay and grow. The CCTC is awarded to individual businesses through a competitive application process and has up to three application periods each fiscal year. Credit awards are competitive and subject to credit availability. The tentative amount of credit available for allocation each year is $180 million. The amount any one business can request in tax credits must be at least $20,000, but no more than 20% of the total credit allocation available for the fiscal year.
Learn more
Research and Development Tax Credit
The California Research & Development (R&D) tax credit program reduces state income tax. A business may qualify for the credit if it paid for or incurred qualified research expenses while conducting qualified research activity in California. A business may receive 15% of the excess of current year research expenditures over a computed base amount (minimum of 50% of current year research expenses) or a 24% credit for basic research payments to third party organizations.
Learn more
Partial Sales and Use Tax Exemption for Manufacturing
The partial exemption applies only to the state sales and use tax rate portion, currently at 3.9375%. Qualified companies are those engaged in manufacturing, processing, refining, fabricating or recycling or for companies engaged in R&D for either biotechnology or physical, engineering and life science. The manufacturing equipment must be used at least 50% of the time for manufacturing purposes, must remain in California for at least a year and should have a useful year greater than one year. Purchases in excess of $200 million in any one year do not qualify.
Learn more
Advanced Transportation and Manufacturing Full Sales and Use Tax Exclusion
The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) provides a full sale and use tax exclusion for advanced manufacturers and manufacturers of alternative source and advanced transportation products, components or systems.
Learn more
California business grants
Zero Emission Vehicle Manufacturing Grants
The California Energy Commission has approved $240 million in grants for ZEV and component supply chain manufacturing, including refueling and battery manufacturing. No more than $50 million per awardee. Companies need to have a lease or purchase sales agreement signed. A 10% match from non-governmental sources is required. Solicitation forthcoming.
Learn more
California employment incentives
New Employment Credit
This credit is for employers that hire qualified full-time employees, pay wages for work performed by that employee in a designated geographic area (DGA) and follow all proper reporting and filing requirements. The employer must have a net increase in jobs and must pay qualified wages, which amount to 1.5 times the California minimum wage, but not over 3.5 times the California minimum wage. Qualified employees must perform at least 50% of their labor within the DGA, must be employed full-time and must meet one of several additional criteria options. The total tax credit is equal to 35% of all qualified wages and can be used for up to 60 months.
Employment Training Panel
The Employment Training Panel (ETP) provides funding to employers to assist in upgrading the skills of their workers. ETP uses a pay-for-performance contract to provide a specific, fixed-fee cash reimbursement for the costs of employer-customized, job-specific skills training conducted by a company and is inclusive of all administration and training costs. Contracts are based on a two-year term. ETP funding is earned once the trainee completes a minimum number of ETP funded training hours and a post training employment retention period earning a contract specific wage.
Learn more
Get assistance identifying and applying for Greater Sacramento and California business incentives
GSEC acts as a single point of contact for companies considering expansion in or relocation to the Greater Sacramento region, leveraging our expertise and existing relationships with state and local jurisdictions, regional workforce training partners, utility service providers and others to help offset market entry and ongoing operational costs. We can identify all state and local incentives available to your business and help navigate the application processes. All our services are complimentary. Get in touch today to learn more.