ATTACHMENT D
City of Stockton
Office and Industrial Sales Tax Incentive Program
1. Goals and 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 (based on office lease rate of $12/sf/year for 5,000 s.f. building/ lease rate of 20,000 s.f. industrial building at • $4.50/sf/year is $90,000) or more (may be an aggregate of lease or purchase of facility, tenant improvements, off-site improvements, or other similar investment)or more • Must have a physical presence within Stockton city limits • No tax sharing agreement shall include local measure taxes
Businesses 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’s goal is to encourage new business development and investment in Stockton, rather than incentivizing businesses to relocate from other parts of San Joaquin County. An Office and Industrial Salex Sales Tax Incentive Agreement, requiring approval by the City Council, will be executed between the City of Stockton and qualifying businessbusinesses using the following rates and terms, and include:
• Term of the agreement: 10 years, with two 5-year renewal options • Tiered rebate proposal:
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$0-
$249,999
0%0% 100%100%
$250,000 and above 50% 50%
$250,000-$500,000$250,000 and above
50%50% 50%50%
Above $500,000 65% 35%
ATTACHMENT D
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 $0 (0%) $200,000 {100%)
$250,000 $125,000 {50%) $125,000 (50%)
$550,000 $357,500 {65%) $192,500 (35%)
$750,000 $487,500 {65%) $262,500 (35%)
ATTACHMENT D
• 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 against any claim of violation of Government Code Sections 53083, 53084, and 53084.5, and other such claims. • Must obtain City business 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 revenue received by the City of Stockton • Creation of jobs
• Capital investment by the business
The details 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 Council 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 August 12, 2014 - Resolution No. 2014-08-12-1601 Amended March 18, 2025 - Resolution No.
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