Santa Clarita Valley Overview
The Santa Clarita Valley is known for being business friendly; its varied businesses have chosen to
locate here because of numerous economic and cost advantages.
Low tax region
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NO business licensing tax, NO utility user tax, NO city tax on commercial property, NO gross
receipts tax, NO parking tax, and NO payroll tax in the City of Santa Clarita. This simple difference
in tax structure between the Santa Clarita Valley and the surrounding areas find Santa Clarita to be
a lower cost alternative in which to do business than other cities.
The table below compares the taxes and fees associated with doing business in a select few Southern
California cities.
Advantages of Locating in the Santa Clarita Valley
Santa Clarita Valley Business Incentives
The SCVEDC is your primary point of contact to access local, state, and federal incentives. Our team will
help you navigate the regulatory and administrative hurdles to apply to all available programs. Below is
a summary of each incentive program.
California Partial Sales Tax Exemption for Manufacturing and R&D Equipment
A tax exemption reduces the amount of tax paid at the time of purchase. This program exempts
qualified SCV companies from paying the state sales tax portion of 3.9375%, reducing your total sales
tax rate from 9.5% to 5.5625% on qualified property purchases.
For more information, please visit: https://www.cdtfa.ca.gov/industry/manufacturing-exemptions.htm
SCV manufacturers will use CDTFA Form 230-M (https://www.cdtfa.ca.gov/formspubs/cdtfa230m.pdf)
when working with retailers and vendors to document the sales tax exemption.
California Partial Sales Tax Exemption for Construction and Tenant Improvements
Businesses engaged in manufacturing or R&D may also take a partial sales tax exemption when doing
tenant or infrastructure improvements where the resulting improvement to real property is an integral
part of the manufacturing, research process, or storage facility for use in connection with manufacturing
processes. Firms will be charged the reduced sales tax rate of 5.5625% at the time of purchase.
SCV manufacturers will use CDTFA FORM 230-MC
(https://www.cdtfa.ca.gov/formspubs/cdtfa230mc.pdf) when working with contractors or construction
personnel to document the sales tax exemption.
For more information, please visit: https://www.cdtfa.ca.gov/industry/manufacturing-exemptions.htm
California Competes Tax Credit
The California Competes Tax Credit is an income tax credit available to businesses that want to come to
California or stay and grow in California. This tax credit is a negotiated credit, meaning the state,
economic developers and private sector businesses will submit an application that critiques the costs
and benefits of each business expansion. Specifically, tax credit agreements will be negotiated by GO-Biz
and approved by the California Competes Tax Credit Committee, consisting of the State Treasurer, the
Director of the Department of Finance, the Director of GO-Biz, one appointee from the Senate, and one
appointee from the Assembly. To help businesses in economic recovery from the COVID-19 pandemic,
for the State of CA fiscal year 2021-2022 more that $394 million in tax credits have been allocated to
help create and maintain jobs in California.
For more information, please visit:
http://www.business.ca.gov/Programs/CaliforniaCompetesTaxCredit.aspx
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Federal and State of California Research and Development (R&D) Tax Credits
R&D tax credits are available to eligible SCV businesses at both the federal and state levels. Most
companies are engaged in efforts to improve products and processes as part of their day-to-day
operations and the IRS defines these activities as R&D. The IRS recognizes that many of these changes
are evolutionary rather than revolutionary in nature. Therefore, it is not necessary for the improvements
to be significant enough to be patentable. Eligible firms are encouraged to precisely identify and track
patents and inventions, as well as new or improved products, processes, techniques, formulas or
computer software (collectively referred to as “business components”) considered to be eligible. Below
are a few questions that may help SCV firms understand whether they qualify for R&D tax credits.
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Does the project or activity rely on any form of physical or biological sciences, engineering,
or computer science, etc.?
Are you trying to make improvements to your products or processes?
At the outset of the project, was there any uncertainty in regard to your development?
Did you have to test your results or develop prototypes?
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If you answered yes to these questions, please contact the SCVEDC to schedule a free preliminary
assessment for qualifying for this lucrative tax credit.
Work Opportunity Tax Credit (WOTC)
WOTC is a federal tax credit for companies who hire new employees from certain target groups that
have consistently faced significant barriers to employment. The amount of this credit will depend on the
hired individual’s qualification as a member of a target group, and ranges from $2,400 to $9,600. The
Veteran Opportunity to Work (VOW) to Hire Heroes Act of 2011 extended and expanded the WOTC
Qualified Veterans target group. In addition, qualified tax-exempt employers can now participate by
hiring qualified veterans.
For more information, please visit:
https://edd.ca.gov/Jobs_and_Training/Work_Opportunity_Tax_Credit.htm
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California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA)
Sales and Use Tax Exclusion Program
The CAEATFA is providing a sales and use tax exclusion (full rate, including local and district taxes) on
qualifying property that is used in the design, manufacture, production, or assembly of “advanced
transportation technologies or alternative energy source products, components, or systems,” or “clean
technology.” The tax exemption takes place at the time of the qualified equipment purchase. Before one
can make tax exempt purchases of clean-tech qualifying equipment, they must get their application
approved by the CAEATFA. Applications are subject to application and administration fees.
For more information please visit: https://www.treasurer.ca.gov/caeatfa/ste/index.asp
California Employment Hiring Credit
The New Employment Credit (NEC) took effect on January 1, 2014 and will be in effect until January 1,
2026. There is a strict set of eligibility criteria that businesses need to consider when applying, which
include, but are not limited to, the following:
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The business must be located within a Designated Geographic Area (DGA) in the SCV. Check to
see if your location is eligible here: http://maps.gis.ca.gov/gobiz/dga/default.aspx
The business is not an excluded business (temporary help services or retail trades, and those
primarily in food services, theater companies and dinner theaters, drinking places (alcoholic
beverages,) or casinos and casino hotels.
The business must show a net increase in the number of jobs
The business hires an individual that is a qualified full-time employee who works at least an
average of 35 hours per week and meets all the following:
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Is hired on or after January 1, 2014
Performs at least 50% of his/her services for the employer in the DGA
Receives starting wages that exceed 150% of the state’s minimum wage
Is paid hourly wages for an average of at least 35 hours per week, or is salaried, and paid
for full-time employment
Meets one of five conditions upon commencement of employment (see link below)
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The hiring credit reimburses employers 35% of qualified wages. An annual certification of employment is
required with respect to each qualified full-time employee hired in a previous taxable year.
For more information, please visit:
https://www.ftb.ca.gov/file/business/credits/new-employment-credit/index.html
Foreign Trade Zone
This extension of the U.S. Foreign Trade Zone (FTZ) program offers international traders, importers, and
exporters outstanding opportunities to take advantage of special customs privileges. These incentives
can lower barriers to trade, improve cash flow and enhance your company's profits while giving you a
competitive edge in the global marketplace. In 2017, the FTZ service area was expanded to include all of
Santa Clarita Valley. SCV businesses can now become an Operator, or a Sub-Operator through extension
of an existing Operator’s bond and zone to another company facility (requires Operator management
oversight). Some core benefits include:
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Duty Deferral – Duties are only paid when imported merchandise is entered into the U.S.
Customs territory
Duty Elimination – No duties paid on merchandise that is exported from a FTZ, transferred to
another zone, or destroyed
Duty Inversion – Reduce or eliminate customs duties for products assembled, manufactured or
kitted in a FTZ
Weekly Entry Program – Caps total merchandise processing fees (MPF) at $485 per week, vs. per
shipment
Efficient Supply Chain/Direct Delivery – Products that take days to clear through customs can be
cleared in-bound directly and arrive more rapidly at importer’s FTZ
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To learn more or to obtain a free assessment on potential cost savings, contact SCVEDC.
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LA Metro Vanpool Program
SCV manufacturers face the challenge of large employee commuter populations from Antelope Valley,
San Fernando Valley and greater LA. Vanpool programs are a growing means of both employee
attraction and retention. LA Metro offers an incentive of up to $500 per vanpool per month for vanpool
vehicles provided by their leasing partner operators.
For more information, please visit: https://metrovan.ridematch.info/rp2/home/home
Southern CA Edison Economic Development Rate Program (EDR)
Large power users (150 kW or more) can apply for a 12% reduction in their electrical rate. Businesses
must provide a business case demonstrating your critical need for the EDR program and present a viable
out-of-state option or facility closure. Options are also available for small businesses using less than
150kW combined load.
For more information, please contact SCVEDC.
City of Santa Clarita Use Tax Rebate Program
When businesses pay California Sales and Use Tax to a lessor or an out-of-state vendor, Santa Clarita
receives only a small amount of the 1% local share. However, using a Direct Payment Permit system,
Santa Clarita would receive the entire 1% local share back, benefiting Santa Clarita’s general fund which
supports public safety, parks, library, and infrastructure as well as a variety of other city services.
The incentive program provides businesses with either a cash rebate of 25% on the additional state-
collected use tax remitted to the city as a result of the business entering the state’s Use Tax Direct
Payment Permit program, or a 45% rebate to be used on business expansion city permit credits.
The only requirement to qualify for the program is that the company must have $500,000 in cumulative
purchases subject to use tax in a 12-month period. Once qualified there is no other minimum purchase
requirement.
For more information, please contact SCVEDC.
Recycling Market Development Zone
The Recycling Market Development Zone (RMDZ) is a California state program aimed to simultaneously
reduce landfill waste and encourage manufacturing. Santa Clarita is one of several designated RMDZs in
the state of California, and as a result, Santa Clarita businesses are eligible for low-interest loans. To
receive such a loan, the business (a manufacturer or processor) must demonstrate that it is either: 1)
reducing initial waste; or 2) reusing production bi-products that would normally be dumped in a landfill;
or 3) using recycled content in its manufacturing. Metal recycling is not eligible for a loan, as 90% of
California’s metal is already recycled.
However, manufacturers that can demonstrate that they are recycling paper, plastic, glass and/or
organic material are eligible. Incentives for qualifying businesses include low interest rate loan programs
and technical assistance.
For more information, please visit: https://greensantaclarita.com/
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California Film Credit
California offers a state income/sales and use tax credit for “qualified motion pictures.” Under the
current Program 3.0, the state has adjusted or maintained benefits for TV series, pilots, mini-series,
relocating TV series, and independent and non-independent films.
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Maintains tax credit program funding of $330 million from program 2.0 and extended program
3.0 for five (5) years
Eliminated budget caps for studio and independent films
Replaced lottery selection with a ranking system based on jobs and other criteria
Added a 5% “Uplift” for productions that film outside the 30-Mile Zone, as well as for visual
effects and music scoring/recording performed in-state
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For more information, please visit: http://film.ca.gov/tax-credit/
City of Santa Clarita Film Credit
The City of Santa Clarita has a three-part film incentive program that subsidizes/refunds basic permit
fees for locally based, recurring and California Film & Television Tax Credit Program approved
productions and provides partial refunds of Transient Occupancy (Hotel) Taxes.
For more information, please visit: http://filmsantaclarita.com/
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Santa Clarita Valley Business Resources
Santa Clarita Valley businesses can take advantage of several local resources that provide free or low-
cost services supporting workforce training and development, expert consulting on a range of business
needs, recruitment and hiring, and more. Following is a summary of services available.
LiveWorkSCV.com
The SCVEDC hosts an easy-access job board to connect Santa Clarita Valley-based career opportunities
with residents of SCV. Employers can post their open positions receive applications directly via email or
link back to the company’s own employment portal. Residents can also create their own profile and
receive job alerts. Job postings are free of charge. Employers can also post internships at no cost.
For more information or to post a job: www.LiveWorkSCV.com or contact Sue Arellano, SCVEDC Director
of Business Assistance at suearellan[email protected] or 661-288-4411.
Santa Clarita Chamber of Commerce
The SCV Chamber of Commerce represents more than 65,000 member employees by promoting
business growth and enhancing the vitality of the community through value-driven member services,
educational programs, strategic partnerships, community outreach, and legislative advocacy.
The chamber collaborates with government, education, and private industry to strengthen local
businesses, to be an advocate for business, and affect the high quality of life for which SCV is known for.
addition, the SCV Chamber takes an active role in shaping legislative policies in support of business
representing its members before local, regional, state and federal governmental entities and provides a
forum for its members to develop policy positions that impact the Santa Clarita Valley business
community.
For more information: www.scvchamber.com
Two benefit plans for employers are now available for chamber members:
SCV Chamber 401(k) Retirement Plan
The SCV Chamber offers a Member 401(k) Retirement Plan which is designed to save local businesses
time and money in the administration of a 401(k) program for their employees, while creating individual,
customized plans. The SCV Chamber has partnered with Lincoln Financial Group to oversee the Multiple
Employer Aggregation Program (MEAP) including the plan’s important administrative, recordkeeping
and fiduciary services.
SCV Chamber Medical Plan
The SCV Chamber offers two healthcare plans: A Minimum Essential Coverage (MEC) health plan and a
Medical Expense Reimbursement Program (MERP) for employers to offer a solution to a significant
component of the Affordable Care Act (ACA). The healthcare plans can provide local SCV Chamber
members with significant savings on their current healthcare costs.
For more information on these plans: https://www.scvchamber.com/cpages/benefits
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Small Business Development Center
The Small Business Development Center (SBDC) provides free one-on-one counseling meetings with
professional business consultants on a wide variety of business issues including business expansion and
start-up, marketing and sales tactics, business plan development, international trade – import/export
assistance, logistics, manufacturing, financing resources, access to capital/loan packaging, finance and
accounting, HR, legal issues, web site design and development, e-commerce and more. The SBDC also
offers numerous monthly training classes focused on business skills for the small business owner.
For more information or to schedule an appointment: http://cocsbdc.org/
Centers for International Trade Development
The CITD has 10 community college-based locations across California (including College of the Canyons)
that assist businesses in expanding globally, assist individuals and students in expanding their knowledge
of global business and help colleges internationalize their curriculum. The CITD also manages the
California State Trade and Export Promotion (STEP) program which is one of the largest state-based
export promotion efforts in the United States.
For more information: http://www.cccewd.net/initiative_citd.cfm or contact CITD at citd@canyons.edu
or 661-362-5900.
Employee Training Institute
If your company needs to drive down costs, expand the talent within your workforce, and adapt to
continuous improvement methods and processes, SCV’s College of the Canyons Employee Training
Institute (ETI) is an excellent choice for your training and development needs. ETI provides customized
training in most technical skills and business topics such as Print Reading, Lean Manufacturing, Six
Sigma, Project Management, Geometric Dimensioning & Tolerancing (GD&T), Supervisory Skills,
Management and Leadership, and much more. Training classes are offered at your business site, or at
one of several college training locations.
There are several ways for you to get free or low-cost training for your employees using Employment
Training Panel (ETP) funds. Here is the link to learn more about what training programs are offered:
http://canyonsecondev.org/eti/
For more information or to schedule training, please contact Justin Wallace, Director, Business
Partnerships & Workforce Engagement at [email protected] or 661-362-3788.
School of Personal and Professional Learning
The School of Personal and Professional Learning at College of the Canyons offers quick modular courses
to train employees in a variety of subjects such as Career Skills, English as a Second Language, Human
Resources and many others. Aggregated short courses are also available to earn Certificates such as
Workplace Essentials, Customer Relations, Management Toolbox, and many more. These courses can be
taught onsite, online and at a COC location. All classes within this state-funded program are offered at
no cost to employers or employees. Here is link to learn more about the courses and certificates
offered: https://www.canyons.edu/academics/schools/ppl/
For more information please contact Justin Wallace, Director, Business Partnerships & Workforce
Engagement at justin.wallace@canyons.edu or 661-362-3788.
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The Center for Applied Competitive Technologies
The SCV’s Center for Applied Competitive Technologies (CACT) works to advance the global
competitiveness and innovation for advanced technology companies through responsive workforce
training and technical consulting services. The CACT offers technology education and manufacturing
training in the areas of Computer Aided Design (CAD), Computer Aided Manufacturing (CAM) and CNC
machining. Additionally, CACT partners with the ETI in delivering Lean training and consulting.
For more information, please contact John Milburn, Executive Director ETI at
John.Milburn@canyons.edu or 661-362-3245.
Strong Workforce Apprenticeship Group (SWAG)
College of the Canyons has formed a partnership with Goodwill Southern California to create the Strong
Workforce Apprenticeship Group (SWAG). SWAG works with companies throughout the Santa Clarita
region to design and implement an apprenticeship experience that will address their specific workforce
needs through apprenticeships that are registered with the US Department of Labor. National
credential, meaningful on-the-job training, relevant skills training, increased productivity, reduced
turnover, and financial incentives are just some of the benefits apprenticeship programs bring to SCV
companies.
To for more information about SWAG: https://sw-apprenticeshipgroup.com/ or contact Tracy DiFilippis,
Goodwill Sector Strategies Manager at Tdifilippis@goodwillsocal.org or 323-477-3923.
America’s Job Center of California (AJCC), Santa Clarita
The America’s Job Center of California works with local businesses, offering a variety of services from
pre-screening candidates to available interview facilities and job readiness training for job seekers. All
services at the AJCC are offered to businesses and job seekers FREE of charge. Participation in these
workforce development programs can mean a significant return to your business. For example, you may
be eligible for On-the-Job Training (OJT) funds that can reimburse up to half of your new hire’s wages for
the first three months of work, as well as utilizing the Work Opportunity Tax Credit when you hire
eligible job seekers. AJCC is administrated by Goodwill of Southern California.
The SCVEDC is happy to make a warm introduction to the AJCC to help you find qualified candidates. You
can view a list of the services they offer job seekers here: https://www.ajcc.lacounty.gov/ajcc/santa-
clarita-ajcc or call 661-298-0152.
Diversifying Your Workforce Through Alternative Hiring Resources
There are several local organizations that facilitate hiring of individuals with disabilities. Perhaps more
than any other group of people, individuals with disabilities can adapt to different situations and
circumstances. Research shows that people with disabilities make excellent employees, offering
reliability, dedication, and creating a culture of inclusion in the workplace. Hiring people with disabilities
can positively impact a business's bottom line. Recruiting and retaining workers with disabilities is one
strategy to counter the effects of the aging and shrinking workforce. This untapped labor pool can offer
a source of skilled employees and can contribute to increasing retention and reducing turnover. In
addition, tax incentives, job coaching and technical assistance are available through these organizations.
For more information contact Sue Arellano, SCVEDC Director of Business Assistance at
[email protected] or 661-288-4411.
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California Manufacturing Technology Consulting
California Manufacturing Technology Consulting (CMTC®) is a non-profit that provides consulting
services for small to mid-size manufacturers in Southern California. The CMTC® mission is to ensure that
manufacturers flourish by identifying areas of improvement in capability, process and systems to create
financial impact.
For more information: www.cmtc.com or contact Kathy McIntyre, CMTC Client Advisor at
[email protected]om or 310-984-0768.
Supplier Scouting and Matching Program
SCVEDC has partnered with CMTC to deliver a Supplier Matching and Scouting Program to SCV
businesses that manufacture or distribute products to meet demand. It is a free resource to help you
gain visibility for new business, and to help solve any supply chain issues you may be experiencing.
Companies with excess manufacturing capacity or services or companies needing to source critical
components are invited to access this program free of charge.
For more information: https://www.scvedc.org/supplier-matching-program
Aerospace & Defense Forum - Santa Clarita Valley Chapter
The Aerospace & Defense Forum is a community of over 1800 industry senior executives and
professionals who collaborate and share news, information, and analysis relevant to the business of the
aerospace, commercial space and defense industries. The Santa Clarita Valley Chapter engages
executives in SCV’s robust A&D community in regular meetings, and local chapter members are invited
to participate in other chapter and national forum meetings. Visit the website to learn more about local
chapter and national Forum events, member benefits or to join the SCV Chapter mailing list.
For more information: https://aerospacedefenseforum.org/
Biomedical Manufacturing Network
The Biomedical Manufacturing Network is convened by a partnership of regional entities focused on
building a biomedical manufacturing network for business assistance, technology transfer, education
and training, and economic development. Industry experts are available for consultation, research, or
other projects at no cost to businesses in biomedical manufacturing.
For more information: http://www.biomedmfg.org/ or contact Dr. Gregory Theyel, Program Director at
gregory.theyel@biomedmfg.org or 415-425-8314.
California Governor’s Office of Business and Economic Development (GO-Biz)
GO-Biz offers a range of services to business owners including: attraction, retention and expansion
services, site selection, permit assistance, regulatory guidance, small business assistance, international
trade development, assistance with state government, and much more.
For more information: http://www.business.ca.gov/
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Los Angeles Economic Development Corporation
The Los Angeles Economic Development Corporation provides a broad range of business services,
reports and publications, and industry cluster events for companies throughout Los Angeles County, as
well as fee-based customized economic studies.
For more information: http://laedc.org/
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