City of Stockton
Office and Industrial Sales Tax Incentive Program
1. Goals a
nd Objectives
The purpose of the Office and Industrial Sales Tax Incentive Program is to serve as an additional tool in the City’s economic development efforts to generate new revenue, attract new business, and create additional jobs throughout Stockton. The program provides financial incentives to eligible businesses that are looking to locate or expand in office or industrial facilities within the Stockton city limits. Examples of the type of industries that would qualify for the incentive include: eCommerce, fuel distributors, medical device manufacturers, and business-to-business sales. Traditional retail establishments, such as brick-and-mortar storefronts, dealerships, malls and big box retailers, do not qualify for sales rebates under this program.
2. Program Guidelines
The Office and Industrial Sales Tax Incentive Program will be used to attract and retain businesses meeting the following criteria:
Generate net new annual gross taxable sales of $25 million or more Generate sales tax to the City of Stockton corresponding with the gross sales tax amount
Create a minimum of 10 full-time equivalent (FTE) jobs
Make a capital investment within the City of $50,000 or more Must have a physical presence within Stockton city limits Cannot be a current operation or business within the City of Stockton pay sales tax No tax sharing agreement shall include local measure taxes Busin
esses currently located within the unincorporated areas of San Joaquin County, as well as local jurisdictions within San Joaquin County with the exception of the City of Stockton, are not eligible for a rebate under this program. The program is not intended to attract business from other San Joaquin County jurisdictions.
An Off
ice and Industrial Sales Tax Incentive Agreement, requiring approval by the City Council, will be executed between the City of Stockton and qualifying business:
Net New Sales Tax
Revenue
% of Sales Tax Revenue
Rec’d by City to Business
% of Sales Tax Revenue
Rec’d retained by City
Less than $250,000 50% 50%
Above $500,000 50% 50%
EXHIBIT 1
Examples of potential rebates:
Net New Sales Tax
Revenue
% of Sales Tax Revenue
Rec’d by City to Business
% of Sales Tax Revenue
Rec’d retained by City
$200,000 $100,000 (50%) $100,000 (50%)
$250,000 $125,000 (50%) $125,000 (50%)
$550,000 $275,000 (50%) $275,000 (50%)
$750,000 $375,000 (50%) $375,000 (50%)
Rebate amount will be based on net new sales tax revenue received by the City and disbursed annually to the business.
Sales tax rebate would be limited to the Bradley-Burns 1% tax only Include recapture clause to protect City should BOE make a determination that all/portion of sales tax revenue received were improperly allocated.
Provision indemnifying the City agains t any claim of violation of Government Code Sections 53083, 53084, and 53084.5, and other such claims.
Must obtain City busine ss license, proper permitting, and comply with all laws and regulations.
In order to be eligible for the incentive, the City must demonstrate that there is a direct benefit to the public, which may include, but is not limited to:
Net new sales tax rev
enue received by the City of Stockton
Creation of jobs
Capital investment by the business
The detail
s of the financial incentive will be included in the Office and Industrial Sales Tax Incentive Agreement, in a form approved by the City Attorney’s Office. Net new sales tax revenue received through the incentive program will be used to further the City’s economic development activities. The program will be in effect for a period of 5 years from the date of approval, unless extended by the City Council.
3. City Counci
l Review
Each Office and Industrial Sales Tax Incentive Agreement will be presented to the City Council for review and consideration, based on the findings and guidelines set forth above.
Approval of the Incentive Agreements will require a public hearing.
Adopted by the Stockton City Council
June 24,
2014 – Resolution No. 2014-06-24-1505
Amended March 12, 2024 – Resolution No. 2014-08-12-1601 ::ODMA\GRPWISE\COS.HRD.HRD_Library:116656.1
EXHIBIT 1