3808: 2017 Manufacturing Enhancement Area Business Booklet
- General Information
- How to Claim the Credit
- Part I – Hiring Credit and Recapture
- Part II – Portion of Business Attributable to the Manufacturing Enhancement Area
- Worksheet I, Hiring Credit & Recapture
- Worksheet II, Income or Loss Apportionment
- Instructions for Schedule Z – Computation of Credit Limitations
- Form FTB 3808, Manufacturing Enhancement Area Credit Summary
- Schedule Z, Computation of Credit Limitations
- Standard Industrial Classification Manual, 1987 Edition (Partial Listing)
- Principal Business Activity Codes
- How to Get California Tax Information
2017 Instructions for Form FTB 3808
Manufacturing Enhancement Area Businesses
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC).
Principal Business Activity Codes
The Principal Business Activity Codes, located within these instructions, have been updated and revised to reflect updates to the North American Industry Classification System (NAICS).
In general, for taxable years beginning on or after January 1, 2015, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity. Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540 or 540NR), and the Business Entity tax booklets.
The instructions provided with California tax forms are a summary of California tax law and are only intended to aid taxpayers in preparing their state income tax returns. We include information that is most useful to the greatest number of taxpayers in the limited space available. It is not possible to include all requirements of the California Revenue and Taxation Code (R&TC) in the instructions. Taxpayers should not consider the instructions as authoritative law.
Repeal of Geographically Targeted Economic Development Area Tax Incentives
The California legislature repealed and made changes to all of the Geographically Targeted. Economic Development Area Tax Incentives. Enterprise Zones (EZ) and Local Agency Military Base Recovery Areas (LAMBRA) were repealed on January 1, 2014. The Targeted Tax Areas (TTA) and Manufacturing Enhancement Areas both expired on December 31, 2012. For more information, go to ftb.ca.gov and search for repeal tax incentives.
Expired Manufacturing Enhancement Area (MEA)
The MEA has expired as of December 31, 2012. Taxpayers can no longer generate/incur MEA hiring credits for employees hired on or after January 1, 2013. However, qualified taxpayers can generate/incur MEA hiring credits for qualified employees hired prior to the MEA expiration date for wages paid or incurred within the 60-month period of the MEA hiring credit. For more information, see R&TC Sections 17053.47(b)(1)(D) and 23622.8(b)(1)(D).
Expired Manufacturing Enhancement Area Credits Carryover Period
The portion of any MEA hiring credit remaining for carryover to taxable years beginning on or after January 1, 2014, shall be carried over only to the succeeding 10 taxable years if necessary, or until the credit is exhausted, whichever occurs first. Any hiring credits generated in the current taxable year for employees hired on or before December 31, 2012, and unusable in the current taxable year, may be carried over to the succeeding 10 taxable years.
Single-Sales Factor Formula
R&TC Section 25128.7 requires all business income of an apportioning trade or business, other than an apportioning trade or business under R&TC Section 25128(b), to apportion its business income to California using the single-sales factor formula. For more information, get Schedule R, Apportionment and Allocation of Income, or go to ftb.ca.gov and search for single sales factor. However, business income apportioned to the MEA continues to be apportioned based on the property and payroll factors.
Assignment of Credits
Credit earned by members of a combined reporting group may be assigned to an affiliated corporation that is an eligible member of the same combined reporting group. A credit assigned may only be claimed by the affiliated corporation against its tax liability. For more information, see instructions for Schedule Z, Computation of Credit Limitations, on page 10, Assignment of Credit, or get form FTB 3544, Election to Assign Credit Within Combined Reporting Group, or form FTB 3544A, List of Assigned Credit Received and/or Claimed by Assignee, or go to ftb.ca.gov and search for credit assignment.
For an employer who employs 25 or fewer employees, the California minimum wage is:
- $10.00 per hour from January 1, 2017 through December 31, 2017.
- $10.50 per hour from January 1, 2018 through December 31, 2018.
For any employer who employs 26 or more employees, the California minimum wage is:
- $10.50 per hour from January 1, 2017 through December 31, 2017.
- $11.00 per hour from January 1, 2018 through December 31, 2018.
For purposes of this booklet, the term “pass-through entity” refers to an S corporation, estate, trust, partnership, and limited liability company (LLC). References to “partnerships” include LLCs classified as partnerships.
Economic Development Area (EDA) Tax Incentives
California established four types of EDAs that have related tax incentives. These incentives were established to stimulate growth and development in selected areas that are economically depressed. EDA tax incentives applied only to certain business transactions that were undertaken after an EDA had received final designation from the California Department of Housing & Community Development (HCD). Final designation was when the HCD designated an area to be an EDA. Tax incentives were available to individuals and businesses operating or investing within the geographic boundaries of the following EDAs:
- Enterprise Zones (repealed on January 1, 2014)
- Local Agency Military Base Recovery Areas (repealed on January 1, 2014)
- Manufacturing Enhancement Areas (designation expired on December 31, 2012)
- Targeted Tax Areas (designation expired on December 31, 2012)
Additional information on the EDAs can be found in the following FTB tax booklets:
- EZ tax incentives, FTB 3805Z, Enterprise Zone Business Booklet
- LAMBRA tax incentives, FTB 3807, Local Agency Military Base Recovery Area Business Booklet
- TTA tax incentives, FTB 3809, Targeted Tax Area Business Booklet
References in this booklet to the “MEA” are interpreted as “the boundaries of the former MEA as it existed on December 31, 2012.”
California statutes require the Franchise Tax Board (FTB) to provide information to the California Legislature regarding the number of businesses using the EDA tax incentives, types of EDA tax incentives being used, and the EDAs in which the businesses are claiming the tax incentives.
Complete items A through I on Side 1 of form FTB 3808, Manufacturing Enhancement Area Credit Summary, as applicable. This information will be used to meet the FTB’s statutory reporting requirement.
This booklet provides specific information on the available MEA tax incentive. Taxpayers investing or operating within an MEA may be eligible for a hiring credit if, both the taxpayer and the hired employee meet the requirements of R&TC Sections 17053.47 and 23622.8. Use this booklet to determine the correct amount of hiring credit that a business may claim for operating or investing in a trade or business within an MEA. Complete the worksheets and Schedule Z in this booklet for the MEA hiring credit. Then enter the hiring credit amount on form FTB 3808.
Manufacturing Enhancement Area Designation
California’s two MEAs are the cities of Brawley and Calexico, located in Imperial County. These cities received their final designation as MEAs effective January 1, 1998. The MEA designation expired on December 31, 2012. The program offers a special tax incentive to encourage business and stimulate job creation in the area.
The geographic boundaries of an MEA are used to determine whether the tax incentive is available to a business in a specified location. For business eligibility or zone related information, including questions regarding MEA geographic boundaries, contact the local zone program manager in which the business is located. Go to hcd.ca.gov and search for directory of zone contacts for Directory of Economic Development Areas.
For information that is zone-specific, but not tax-specific, you may contact the HCD. See page 20 for the HCD contact information.
- Form 100
- California Corporation Franchise or Income Tax Return
- Form 100S
- California S Corporation Franchise or Income Tax Return
- Form 100W
- California Corporation Franchise or Income Tax Return – Water’s-Edge Filers
- Form 109
- California Exempt Organization Business Income Tax Return
- Form 540
- California Resident Income Tax Return
- Long Form 540NR
- California Nonresident or Part-Year Resident Income Tax Return
- Form 541
- California Fiduciary Income Tax Return
- Form 565
- Partnership Return of Income
- Form 568
- Limited Liability Company Return of Income
- Schedule CA (540)
- California Adjustments – Residents
- Schedule CA (540NR)
- California Adjustments – Nonresidents or Part-Year Residents
- Schedule P
- Alternative Minimum Tax and Credit Limitations
- FTB Pub. 1061
- Guidelines for Corporations Filing a Combined Report
- Schedule C (100S)
- S Corporation Tax Credits
- Schedule K-1 (100S)
- Shareholder’s Share of Income, Deductions, Credits, etc.
- Schedule K-1 (541)
- Beneficiary’s Share of Income, Deductions, Credits, etc.
- Schedule K-1 (565)
- Partner’s Share of Income, Deductions, Credits, etc.
- Schedule K-1 (568)
- Member’s Share of Income, Deductions, Credits, etc.
- Schedule R
- Apportionment and Allocation of Income
- FTB 3544
- Election to Assign Credit Within Combined Reporting Group
- FTB 3544A
- List of Assigned Credit Received and/or Claimed by Assignee
Who Can Claim the MEA Tax Incentive?
The MEA hiring credit is available to individuals, sole proprietors, corporations, estates, trusts, and partnerships operating or investing in a business located within the designated MEA.
How to Claim the Credit
To claim the MEA hiring credit, complete form FTB 3808 and attach it to your California tax return.
Attach a separate form FTB 3808 for each business you operate or invest in that is located within an MEA. Also, complete the following schedule and/or worksheets to report credits incurred:
- Corporations complete Schedule Z and all the worksheets, except for Worksheet II, Section B.
- Sole proprietors complete Schedule Z and all the worksheets.
- Trusts, estates and partnerships, complete Worksheet I and Worksheet II, Section A.
- Individual investors receiving pass-through MEA credits, complete Worksheet II, Section B and Schedule Z. All other investors, complete Worksheet II, Section A and Schedule Z.
Schedule Z is on Side 2 of form FTB 3808.
To assist with the processing of the tax return, indicate that the business operates or invests within an MEA by doing the following:
- Form 540 filers:
- Claim MEA tax incentives on Form 540, lines 43 through 45, as applicable.
- Long Form 540NR filers:
- Claim MEA tax incentives on Long Form 540NR, lines 58 through 60, as applicable.
- Form 100 filers:
- Claim MEA tax incentives on Form 100, line 20, lines 24 through 26, as applicable.
- Form 100S filers:
- Claim MEA tax incentives on Form 100S, line 18, lines 22 through 24 as applicable.
- Form 100W filers:
- Claim MEA tax incentives on Form 100W, line 20, lines 24 through 26, as applicable.
- Form 109 filers:
- Check the “Yes” box for MEA Question I at the top of Form 109, Side 1.
Be sure to keep all completed worksheets and supporting documents for your records.
Form FTB 3808 – Instructions for items A through I
- For corporations, estates, trusts, partnerships, LLCs classified as partnerships, exempt organizations, and sole proprietors, complete items A through I.
- Investors of pass-through entities, complete items A through D. See form FTB 3808, Side 1 for more information.
Standard Industrial Classification (SIC) and Principal Business Activity (PBA) Codes
To qualify for the MEA hiring credit, you must be engaged in a trade or business within the selected SIC listed on pages 15 and 16 of this booklet. Enter the SIC code of the establishment that qualifies you to take this credit on form FTB 3808, Side 1. If your business has more than one establishment, and if more than one of them qualifies you to take this credit, enter the SIC code that best represents your primary qualifying establishment.
The PBA codes are based on the North American Industry Classification System published by the United States Office of Management and Budget. The PBA codes are listed on pages 17 through 19. Enter the PBA code of your principal activity on form FTB 3808, Side 1.
Part I – Hiring Credit and Recapture
Line 1 Hiring Credit
The MEA has expired as of December 31, 2012. Taxpayers can no longer generate/incur MEA hiring credits for employees hired on or after January 1, 2013. However, qualified taxpayers can generate/incur MEA hiring credits for qualified employees hired prior to the MEA expiration date for wages paid or incurred within the 60-month period of the MEA hiring credit.
The portion of any MEA hiring credit remaining for carryover to taxable years beginning on or after January 1, 2014, shall be carried over only to the succeeding 10 taxable years if necessary, or until the credit is exhausted, whichever occurs first. Any hiring credits generated in the current taxable year for employees hired on or before December 31, 2012, and unusable in the current taxable year, may be carried over to the succeeding 10 taxable years.
Employers hiring qualified employees, were required to obtain VoucherCert 10-07 from the local agency responsible for verifying employee eligibility on or before December 31, 2014. Do not file VoucherCert 10-07 with your tax return. Keep the voucher for your records. For vouchering deadline questions, go to hcd.ca.gov and search for vouchering.
A qualified taxpayer conducting a trade or business within an MEA may claim a hiring credit for wages paid or incurred to hire certain disadvantaged individuals. Qualified taxpayers must meet all of the following:
- Be engaged in a line of business described in Standard Industrial Classification (SIC) Codes 0211 through 0291, Code 0723, or Codes 2011 through 3999 of the Standard Industrial Classification Manual, 1987 Edition.
- Conduct a trade or business within the MEA.
- Have at least 50% of its workforce that was hired after the MEA designation, be residents of the county in which the MEA is located at the time of hire.
- Have at least 30% of the qualified county resident workforce described above be qualified disadvantaged individuals.
A “qualified disadvantaged individual” is an individual who at the time hired was any of the following:
- A person receiving or determined to be eligible to receive services funded by the federal Job Training Partnership Act (JTPA), or its successor.
- Any voluntary or mandatory registrant under the Greater Avenues for Independence Act of 1985 (GAIN), or its successor.
- A person who has been certified eligible by the Employment Development Department under the federal Targeted Jobs Tax Credit Program, or its successor, whether or not this program is in effect.
An employer may claim a credit for the qualified wages paid or incurred to a qualified disadvantaged individual who meets all of the following:
- Was hired after the MEA received its final designation.
- Spends at least 90% of his or her work time for the qualified employer on activities directly related to the conduct of a qualified trade or business activity within the boundaries of the MEA.
- Performs at least 50% of the work for the qualified employer within the boundaries of the MEA.
The percentage of wages used to compute the credit depends on the number of years the employee works for the employer in the MEA. The applicable percentage begins at 50% and declines 10% for each year of employment. After the fifth year of employment, no credit can be generated.
Wages that qualify for the hiring credit are those wages paid or incurred to hire a qualified disadvantaged individual for the consecutive 60-month period beginning on the first day the individual commenced employment with the employer. For this purpose, commencement of employment or the hire date is the first day of employment for which the individual receives wages/compensation. For an employer that operates a business that has regularly occurring seasonal or intermittent employment decreases and increases, reemployment of an individual is not a new hire; rather, it is a continuation of the prior employment and does not constitute commencement of employment for the qualified wages test.
The credit is based on the smaller of the following:
- The actual hourly rate paid or incurred by the employer for work performed by the employee during the taxable year.
- 150% of the minimum hourly wage established by the Industrial Welfare Commission.
Where the California minimum wage is higher than the federal minimum wage, the California minimum wage is used for purposes of computing the MEA hiring credit. The minimum wage prior to July 1, 2014, was $8.00 per hour. For purposes of computing the MEA hiring credit, 150% of the minimum wage was $12.00 per hour. Beginning on or after July 1, 2014, the minimum wage is $9.00 per hour. For purposes of computing the MEA hiring credit, 150% of the minimum wage is $13.50 per hour.
John Anderson was hired on January 1, 2012. John’s hourly rate for the first month was the minimum wage $8.00. At the beginning of the second month, his hourly rate increased to $8.50. In the third month, John’s hourly rate increased to $12.50. The hourly rate that qualifies for the credit is limited to 150% of the minimum wage, or $12.00 per hour. The amount of qualified wages is computed as follows:
|Month(s)||Hours per month ×||Hourly rate allowed =||Qualified wages per month|
Retain a copy of the VoucherCert 10-7 and the documentation given to the vouchering agency. In addition, for each qualified employee, keep records and a schedule of the first 60 months of employment showing (at least) the following:
- Employee’s name.
- Date the employee was hired.
- The employee’s address at the time of hire.
- Number of hours the employee worked for each month of employment.
- Smaller of the hourly rate of pay for each month of employment or 150% of the minimum wage.
- Location of the employee’s job site and duties performed.
- Total qualified wages per month for each month of employment.
Line 2 Credit Recapture
Employers recapture (add back to the tax liability) the amount of credit attributable to an employee’s wages if the employer terminates the employee at anytime during the longer of the following:
- The first 270 days of employment (whether or not consecutive).
- 90 days of employment plus 270 calendar days.
Employers of seasonal employees recapture the amount of hiring credit attributable to the employee’s wages if both of the following apply:
- The employer terminates the employee before the completion of 270 days of employment.
- The 270 days is during the 60-month period beginning the day the employee commences employment with the employer.
A “day of employment” means any day the employee receives wage compensation (including a paid sick day, holiday, or vacation day).
Employers add to the current year’s tax the amount of credit claimed in the year of termination and all prior years in which the credit was claimed for the terminated employee.
The credit recapture does not apply if the termination of employment was any of the following:
- Voluntary on the part of the employee.
- In response to misconduct of the employee. See Cal Code Regs., tit. 22 sections 1256-30 to 1256-43, for further information on misconduct.
- Caused by the employee becoming disabled, (unless the employee was able to return to work and the employer did not offer to reemploy the individual).
- Carried out so that other qualified individuals could be hired, creating a net increase in both the number of qualified employees and the number of hours worked.
- Due to a substantial reduction in the employer’s trade or business operations.
Instructions for Worksheet I – Hiring Credit & Recapture
Section A – Credit Computation
Line 1, column (a)
Enter the name of each qualified employee. Attach additional schedule(s) if necessary.
Line 1, column (b) through column (f)
Enter in the appropriate columns the qualified wages paid or incurred during the taxable year for each qualified employee listed in column (a).
Line 2, column (b) through column (f)
Add the amounts in each column. The cumulative qualified wages used to compute the MEA hiring credit cannot exceed $2,000,000. This limit applies for each taxable year.
Line 3, column (b) through column (f)
Multiply the total in each column of line 2 by the percentage in each column.
If you can claim the federal jobs tax credit from the Work Opportunity Tax Credit (WOTC) on your 2017 federal tax return then reduce the MEA hiring credit by that amount. The reduction applies for those employees who are hired on or after January 1, 2010, and before August 31, 2011 (excluding unemployed veterans and disconnected youth as described in IRC Section 51(d)(14)).
No other California jobs tax credit may be claimed for the same wage expense paid to employees shown in line 1, column (a).
For partnerships, enter the amount from line 6, on form FTB 3808, Side 1, Part I, line 1. Also, include the current year hiring credit amount on Forms 565 and 568, Schedule K, line 15f and the distributive share of the credit to partners and members on Schedule K-1, line 15f. In addition, add the entire amount of the credit on Schedule K, line 1, column (c).
For corporations, individuals, estates, and trusts, enter the amount from line 6 on Schedule Z, as follows:
- Part II, line 6B, column (b) for corporations, individuals, and estates and trusts.
- Part III, line 7, column (b) for S corporations.
- Part IV, line 8, column (b) for corporations and S corporations subject to paying only the minimum franchise tax.
Important: Affiliated corporations that received credits assigned under R&TC Section 23663, do not include the assigned credits received on this worksheet. Those credits are entered and tracked on form FTB 3544A.
- The cumulative qualified wages used to compute the MEA hiring credit cannot exceed $2,000,000. This limit applies for each taxable year, regardless of the number of qualified disadvantaged individuals employed.
- Businesses must reduce any deduction for wages by the amount of the MEA hiring credit on Worksheet I, Section A, line 6.
- S corporations may claim only 1/3 of the credit against the 1.5% entity-level tax (3.5% for financial S corporations). S corporations can pass through 100% of the credit to their shareholders. S corporations must reduce their wage deduction by 1/3 of the amount on Worksheet I, Section A, line 6 and on Form 100S, line 7. In addition, the S corporation must make an adjustment for the entire amount of the credit on Schedule K (100S), line 1, column (c).
Example: In 2017, an S corporation qualified for a $3,000 MEA hiring credit. The S corporation can claim a credit for $1,000 ($3,000 x 1/3). On Form 100S, Schedule K, line 1, column (c), the S corporation would add $3,000 to the S corporation’s ordinary income or loss to reflect the credit passed through to the shareholder(s).
- The amount of hiring credit claimed may not exceed the amount of tax on the MEA business income in any year. Use Schedule Z to compute the credit limitation.
- Where a wage expense qualifies for the MEA hiring credit as well as another credit, the business may claim only one credit for that wage expense.
- The portion of any credit remaining for carryover to taxable years beginning on or after January 1, 2014, shall be carried over only to the succeeding 10 taxable years if necessary, or until the credit is exhausted, whichever occurs first. In the case of an S corporation, 1/3 of the credit can be carried over if it cannot be used in the current year. The remaining 2/3 must be disregarded and may not be carried over.
For more information about the treatment of credits for S corporations, see instructions for Schedule Z.
Section B – Credit Recapture
Line 1, column (a)
Enter the name of the terminated employee. Attach additional schedule(s) if necessary.
Line 1, column (b)
Enter the amount of credit recapture for each employee listed in column (a).
Enter the amount from line 2, column (b) on form FTB 3808, Side 1, line 2.
Also, include the amount of hiring credit recapture on your California tax return or schedule as follows:
- Form 100, Schedule J, line 5.
- Form 100S, Schedule J, line 5 and Schedule K-1 (100S), line 17d.
- Form 100W, Schedule J, line 5.
- Form 109, Schedule K, line 4.
- Form 540, line 63.
- Long Form 540NR, line 73.
- Form 541, line 37 and Schedule K-1 (541), line 14d.
- Form 565, Schedule K, line 20c and Schedule K-1 (565), line 20c.
- Form 568, Schedule K, line 20c and Schedule K-1 (568), line 20c.
Indicate that you included the hiring credit recapture on your tax return by writing “FTB 3808”, in the space provided on the schedule or form.
Partnerships must identify the recapture amounts for their partners and members on Schedule K-1 (565 or 568).
S corporation shareholders must recapture the portion of credit that was previously claimed, based on the terminated employee’s wages. S corporations must also identify the recapture amount for shareholders on Schedule K-1 (100S). This amount will differ from the amount recaptured by the S corporation on Form 100S, Schedule J.
Worksheet I: Hiring Credit and Recapture – Manufacturing Enhancement Area
Section A: Credit Computation
You cannot take the MEA hiring credit and another credit for the same wage expense.
Qualified wages paid or incurred for year of employment (a)
- Total. See instructions: (b) 1st year, (c) 2nd year, (d) 3rd year, (e) 4th year, (f) 5th year
- Multiply line 2 by the percentage for each column. See instructions: (b) 1st year: .50, (c) 2nd year: .40, (d) 3rd year: .30, (e) 4th year: .20, (f) 5th year: .10
- Add the amounts on line 3, column (b) through column (f)
- Enter the total amount of 2017 California and federal jobs tax credits allowed. See instructions.
- Subtract line 5 from line 4. See instructions.
Section B: Credit Recapture
Terminated employee’s name
- Total amount of credit recapture. Add the amount in column (b). See line 2 instructions for where to report the amount on your California tax return.
Part II – Portion of Business Attributable to the Manufacturing Enhancement Area
The MEA tax incentive is limited to the tax on business income attributable to operations within the area. If the business is located within and outside an MEA, or in more than one MEA, you must determine the portion of total business income that is attributable to each MEA.
Business Income vs. Nonbusiness Income
Only business income is apportioned to the MEA to determine the incentive limitation.
Business income is defined as income arising from transactions and activities in the regular course of the trade or business. Business income includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the regular trade or business operations. Nonbusiness income is all income other than business income. See Cal. Code Regs., tit. 18 section 25120 for further references and examples of nonbusiness income.
For corporations and entities doing business in and outside of the Manufacturing Enhancement Area, use Worksheet II, Section A, to determine the MEA apportionment factor to determine the amount of business income attributable to the former MEA.
Pass-through entities must report to their shareholders, beneficiaries, partners, and members the following items:
- The distributive (or pro-rata for S corporations) share of the business income apportioned to the MEA.
- The distributive (or pro-rata for S corporations) share of the business capital gains and losses apportioned to the MEA included in item 1.
- The distributive (or pro-rata for S corporation) share of the MEA property and payroll to corporate partners, members, shareholders, beneficiaries.
Report these items as other income on Schedule K-1 (100S, 541, 565, or 568).
For an individual, use Worksheet II, Section B to determine business income attributable to the MEA. Business income includes but is not limited to, California business income or loss from federal Form 1040, Schedules C,D,E,F, and California Schedule D-1, Sales of Business Property, (or federal Form 4797, Sales of Business Property, if California Schedule D-1 is not needed), as well as wages. Be sure to include casualty losses, disaster losses, and any business deductions reported on federal Form 1040, Schedule A as itemized deductions.
Generally, all income which arises from the conduct of trade or business operations of a taxpayer is business income.
If you elected to claim part or all of your current year disaster loss under IRC Section 165(i)(1) on prior year’s tax return, do not include the amount of the loss that was claimed on prior year’s tax return in your current year business income from the MEA.
Business income is apportioned to an MEA by multiplying the total California business income of the taxpayer by a fraction. The fraction consists of the numerator which is the property factor plus the payroll factor, and the denominator, which is two. If a taxpayer conducts business in more than one MEA, the MEA apportionment factor and credit limitations are computed separately for each MEA.
Property is defined as the average value of all real and tangible personal property owned or rented by the business and used during the taxable year to produce business income.
Property owned by the business is valued at its original cost. Original cost is the basis of the property for federal income tax purposes (prior to any federal adjustment) at the time of acquisition by the business, adjusted for subsequent capital additions or improvements and partial dispositions because of sale or exchange. Allowance for depreciation is not considered.
Rented property is valued at eight times the net annual rental rate. The net annual rental rate for any item of rented property is the total rent paid for the property, less aggregate annual subrental rates paid by subtenants.
Payroll is defined as the total amount paid to the business’s employees for compensation for the production of business income during the taxable year.
Compensation means wages, salaries, commissions, and any other form of payment paid directly to employees for personal services.
Payments made to independent contractors or any other person not properly classified as an employee are excluded.
Compensation Within the MEA
Compensation is considered to be within the MEA if any of the following tests are met:
- The employee’s services are performed within the geographical boundaries of the MEA.
- The employee’s services are performed within and outside the MEA, but the services performed outside the MEA are incidental to the employee’s service within the MEA.
Incidental means any temporary or transitory service rendered in connection with an isolated transaction.
- If the employee’s services are performed within and outside the MEA, the employee’s compensation is attributed to the MEA if any of the following tests are met:
- The employee’s base of operations is within the MEA.
- There is no base of operations in any other part of the state in which some part of the service is performed, and the place from which the service is directed or controlled is within the MEA.
- The base of operations or the place from which the service is directed or controlled is not in any other part of the state in which some part of the service is performed and the employee’s residence is within the MEA.
Base of operations is the permanent place from which the employees start work and customarily return in order to receive instruction from the taxpayer or communications from their customers or persons; to replenish stock or other material; to repair equipment; or to perform any other functions necessary in the exercise of their trade or profession at some other point or points.
Corporations Filing a Combined Report
When determining the income attributable to the MEA, the business income of each corporation doing business in the MEA is the business income apportioned to California as determined under combined report mechanics. For more information on combined reports, get FTB Pub. 1061. Each corporation computes the income attributable to the MEA by multiplying California business by the MEA apportionment factor computed in Worksheet II, Section A. The MEA property and payroll factors used in the determination of MEA business income includes only the taxpayer’s California amounts in the denominator.
Each corporation doing business in the MEA compute the business income attributable to the MEA according to their own apportioned California business income and interstate apportionment factors.
Example: Computation of MEA business income apportioned to each entity operating within the MEA
Parent Corporation A has two subsidiaries, B and C. Corporations A and B operate within an MEA. The combined group operates within and outside California and apportions its income to California using Schedule R. Assume the combined group’s business income apportioned to California was $1,000,000 and Corporation A and B’s share of California business income is $228,000 and $250,000 respectively. Corporation A and B’s separate MEA and separate California property and payroll factor amounts are shown in the example below.
Business income apportioned to the MEA was determined as follows:
|Average Apportionment %
(Property + Payroll Factors) ÷ 2
|Apportioned Business Income||$228,000||$250,000|
|MEA business income||$228,000||$183,325|
Instructions for Worksheet II
Income or Loss Apportionment – Manufacturing Enhancement Area
If the business operates solely within a single MEA and all its property and payroll are solely within that single MEA, enter 100% (1.00) on Section A, line 4, column (c). Do not complete the rest of Worksheet II.
Section A – Income Apportionment
Use Worksheet II, Section A, Income Apportionment, to determine the amount of business income apportioned to the MEA. The apportioned MEA business income determines the amount of the tax incentive that can be used. A taxpayer’s MEA business income is its California business income multiplied by the specific MEA apportionment percentage computed in Worksheet II, Section A.
When determining the income apportioned to the MEA, the numerator of the property factor is the average value of the real and tangible personal property owned or rented by the business and used within the MEA during the taxable year to produce MEA business income, see Worksheet II, Section A, column (b). The denominator of the property factor is the total average value of all the taxpayer’s real and tangible personal property owned or rented and used during the taxable year within California, see Worksheet II, Section A, column (a).
When determining income apportioned to the MEA, the numerator of the payroll factor is the taxpayer’s total compensation paid to the employees for working within the MEA during the taxable year, see Worksheet II, Section A, column (b). The denominator of the payroll factor is the taxpayer’s total compensation paid to employees working in California. See Worksheet II, Section A, column (a).
Section B – Income or Loss Apportionment
Form 540 and Long Form 540NR filers, use Worksheet II, Section B to determine the amount to enter on Schedule Z, Part I, line 1 and line 3.
Do not include disaster losses in any amounts used in the table.
Only California source business income is apportioned to the MEA.
The first step is to determine which portion of the taxpayer’s net income is “business income” and which portion is “nonbusiness income,” since only business income is apportioned to the MEA. See Part II on page 5, Portion of Business Attributable to the Manufacturing Enhancement Area, for a complete discussion of business and nonbusiness income.
Business income or loss reported on federal Form 1040 Schedules C, C-EZ, E, F, and other schedules are reported on lines 6 through line 9. Line 11 and line 12 report business gains or losses reported on Schedule D, California Capital Gain or Loss Adjustment, and California Schedule D-1 (or federal Form 4797, if California Schedule D-1 is not needed). All business income and losses should be adjusted for any differences between California and federal amounts as shown on the Schedule CA (540 or 540NR).
Part I – Individual Income and Expense Items
Taxpayers with wages from a company located within and outside an MEA must determine the MEA wage income by entering the percentage of the time that they worked within the MEA in column (b). The percentage of time should be for the same period the wages entered on line 1 were earned. This percentage must be determined based on their record of time and events such as a travel log or entries in a daily planner.
Part II – Pass-Through Income or Loss
Individuals with a K-1
The individual partner, member, or shareholder completes Worksheet II, Section B, Part II, Pass-Through Income or Loss, and Schedule Z, Computation of Credit Limitation.
Multiple Pass-Through Entities
If you are a shareholder, beneficiary, partner, or member in multiple pass-through entities with businesses located within and outside an MEA from which you received a MEA tax incentive, see the example below for computing business income in the MEA.
|Pass-through entity||Trade or business income from Schedule K-1 (100S, 541, 565, or 568)||Entity’s MEA apportionment percentage||MEA apportioned income|
|A, B, & C||30,000||10%||3,000|
Part III – Taxpayer’s Trade or Business
Business Income or Loss
Use business income or loss from federal Form 1040 Schedules C, C-EZ, E, and F, plus California adjustments from Schedule CA (540 or 540NR) for each trade or business. Also, include business capital gains and losses from Schedule D and business gains and losses from Schedule D-1 as adjusted on Schedule CA (540 or 540NR).
Located Entirely Within the MEA
Line 6 – Line 9: If your business operation reported on federal Form 1040 Schedule C, C-EZ, E, F, or other schedule is entirely within the MEA, enter the income or loss from this activity in column (a) and enter 1.00 in column (b).
Line 11 and Line 12: If the gain or loss reported on Schedule D or Schedule D-1 as adjusted on Schedule CA (540 or 540NR) was attributed to an asset used in an activity conducted entirely within the MEA, enter the gain or loss reported in column (a) and enter 1.00 in column (b).
Located Entirely Within California
Line 6 – Line 9: If your business operation reported on federal Form 1040 Schedule C, C-EZ, E, F, or other schedule is entirely within California, enter the income or loss from this activity in column (a). To determine the apportionment percentage in column (b), complete Worksheet II, Section A.
Enter the percentage from Worksheet II, Section A, line 4, column (c) on Worksheet II, Section B, column (b).
Line 11 and Line 12: If the gain or loss reported on Schedule D or Schedule D-1 as adjusted on Schedule CA (540 or 540NR) was attributed to an asset used in an activity conducted entirely within California, enter the gain or loss reported in column (a). To determine the apportionment percentage in column (b), complete Worksheet II, Section A. Enter the percentage from Worksheet II, Section A, line 4, column (c) on Worksheet II, Section B, column (b).
Located Within and Outside California and the MEA
Line 6 – Line 9: If your business operation reported on federal Form 1040 Schedule C, C-EZ, E, F, or other schedule is within and outside the MEA and California, get California Schedule R and complete line 1 through line 18b and line 28 through line 31. Enter the amount from Schedule R, line 18b and line 31 on column (a) of this worksheet. To determine the apportionment percentage in column (b), complete Worksheet II, Section A. Enter the percentage from Worksheet II, Section A, line 4, column (c) on Worksheet II, Section B, column (b).
When computing Schedule R, disregard any reference to Form 100, Form 100W, Form 565, or Form 568. Also, disregard any reference to Schedules R-3, R-4, or R-5.
Nonresidents that have an apportioning business that operates within the MEA should have already computed Schedule R, and can use those amounts when that schedule is referenced. Residents must complete a Schedule R in order to determine their California source business income for purposes of the MEA credit computation.
Line 11 and Line 12: If the gain or loss reported on Schedule D or Schedule D-1 as adjusted on Schedule CA (540 or 540NR) was attributed to an asset used in an activity conducted within and outside the MEA and California, get Schedule R and complete Schedule R-1. Multiply the gain or loss reported by the apportionment percentage on Schedule R-1, Part A, line 2 or Part B, line 5 and enter the result in column (a). To determine the apportionment percentage in column (b), complete Worksheet II, Section A. Enter the percentage from Worksheet II, Section A, line 4, column (c) on Worksheet II, Section B, column (b).
Line 14 – If, in computing your income or loss, the result on line 14, column (c), is a negative amount, you do not have any business income attributable to the MEA. You cannot use any of the MEA hiring credit in the current taxable year.
If the amount on line 14, column (c), is a positive amount, enter the amount on Schedule Z, Part I, line 1 and line 3 (skip line 2).
Worksheet II: Income or Loss Apportionment – Manufacturing Enhancement Area
Section A: Income Apportionment
Use Worksheet II, Section A, if your business has net income from sources within and outside an MEA.
Total within California
Total within an MEA
Percentage within an MEA
column (b) ÷ column (a)
|1. PROPERTY FACTOR
Average yearly value of owned real and tangible personal property used in the business (at original cost). See instructions for more information. Exclude property not connected with the business and the value of construction in progress.
|Machinery and equipment||Not Applicable|
|Furniture and fixtures||Not Applicable|
|Delivery equipment||Not Applicable|
|Other tangible assets (attach schedule)||Not Applicable|
|Rented property used in the business. See instructions.||Not Applicable|
|Total property values|
|2. PAYROLL FACTOR
Employees’ wages, salaries, commissions, and other compensation related to business income included in the tax return.
|3. Total percentage – sum of the percentages in column (c).||Not Applicable||Not Applicable|
|4. Average apportionment percentage (1/2 of line 3).
Enter here and on form FTB 3808, Side 1, line 3.
|Not Applicable||Not Applicable|
The average apportionment percentage shown on line 4 represents the portion of the taxpayer’s total business that is attributable to activities conducted within the MEA. Factors with zero balances in the totals of column (a) will not be included in the computation of the average apportionment percentage. For example, if the taxpayer does not have any payroll within or outside the MEA, the average apportionment percentage would be computed by dividing line 3 by one instead of by two as normally instructed.
Section B: Income or Loss Apportionment
Part I: Individual Income and Expense Items
Percentage of time providing services in the MEA
(a) × (b)
|2. Employee business expenses|
|3. Total. Combine line 1, column (c) and line 2, column (c).|
Part II: Pass-Through Income or Loss
Name of entity
Distributive or pro-rata share of business income or loss apportioned to the MEA from Schedule K-1 (100S, 541, 565, or 568) including capital gains and losses
|5. Total. Add line 4, column (b).|
Part III: Taxpayer’s Trade or Business
Business income or loss
Apportionment percentage for the MEA
Apportioned income or loss
(a) × (b)
|6. Schedule C or C-EZ|
|7. Schedule E (Rentals)|
|8. Schedule F|
|9. Other business income or loss|
|10. Total. Add line 6 through line 9, column (c).|
Business gain or loss
Apportionment percentage for the MEA
Apportioned gain or loss
(a) × (b)
|11. Schedule D|
|12. Schedule D-1|
|13. Total. Add line 11, column (c) and line 12, column (c).|
|14. Total. Add line 3, line 10, and line 13, column (c), and line 5, column (b). See instructions.|
Schedule Z – Computation of Credit Limitations
The amount of the MEA hiring credit you can claim on your California tax return is limited by the amount of tax attributable to the MEA business income. The amount of tax attributable to the MEA business income is computed in this schedule. For corporations and other entities doing business in the MEA, the MEA business income is computed in this schedule using the MEA apportionment factor formula computed on Worksheet II, Section A. For individuals, the MEA business income is computed on Worksheet II, Section B.
Assignment of Credit
Credit earned by members of a combined reporting group may be assigned to an affiliated corporation that is an eligible member of the same combined reporting group. A credit assigned may only be claimed by the affiliated corporation against its tax liability.
The eligible assignee shall be treated as if it originally generated the assigned credit. Any credit limitations or restrictions that applied to the assignor will also apply to the eligible assignee. The amount of MEA credits you may claim on your California tax return is limited to the tax attributable to a specific MEA. For zone credits assigned, the assignee must have a tax liability as a result of income generated in the same zone that the original credit was generated. For example, if the original credit was generated in the Calexico MEA of the assignor, the assignee must have a tax liability on the income attributable to the Calexico MEA in order to use the assigned credit. For more information, get form FTB 3544, or form FTB 3544A, or go to ftb.ca.gov and search for credit assignment.
If a taxpayer owns an interest in a disregarded business entity, the amount of the credit that can be utilized is limited to the difference between the taxpayer’s regular tax computed with the income of the disregarded entity, and the taxpayer’s regular tax computed without the income of the disregarded entity. Partnerships allocate the credit among the partners according to the partner’s distributive share as determined in a written partnership agreement. See R&TC Section 17039(e)(2).
The MEA hiring credit you are otherwise eligible to claim may be limited. Do not apply the credit against the minimum franchise tax (corporations and S corporations), the annual tax (partnerships and QSub) the alternative minimum tax (corporations, exempt organizations, individuals, and fiduciaries), the built-in gains tax (S corporations), or the excess net passive income tax (S corporations).
Refer to the credit instructions in your tax booklet for more information.
S Corporations and the Application of the MEA Hiring Credit
An S corporation may use its MEA hiring credit to reduce the MEA tax at both the corporate and shareholder levels.
An S corporation may use 1/3 of the MEA hiring credit to reduce the tax on the S corporation’s MEA business income. In addition, S corporation shareholders may claim their pro-rata share of the entire amount of the MEA hiring credits computed under the Personal Income Tax Law.
Example: In 2017, an S corporation qualified for a $3,000 MEA hiring credit. The S corporation will be able to use 1/3 of the credit ($3,000 x 1/3 = $1,000) to offset the tax on the corporation’s MEA business income.
The S corporation will also pass through a $3,000 MEA hiring credit to its shareholders to offset their individual tax (computed under the Personal Income Tax Law) on the MEA business income.
S corporations should attach form FTB 3808 to Form 100S to claim the MEA tax credit. If form FTB 3808 is not attached to the tax return, the credit may be disallowed.
Shareholders should attach Schedule(s) K-1 (100S) to their individual tax returns.
If the amount of hiring credit available this year exceeds your MEA tax, you may carry over any excess credit to future years. The portion of any MEA hiring credit remaining for carryover to taxable years beginning on or after January 1, 2014, shall be carried over only to the succeeding 10 taxable years if necessary, or until the credit is exhausted, whichever occurs first. Apply the carryover to the earliest taxable year possible. In no event can the credit be carried back and applied against a prior year’s tax. Generally, the credit cannot be transferred to another taxpayer, unless:
- There was a qualifying merger.
- The credit qualifies under R&TC Section 23663 for assignment to an affiliated corporation. For additional information, get form FTB 3544, or form FTB 3544A.
For S corporations, the amount of 1/3 of the hiring credit that is in excess of the 1.5% entity-level MEA tax (3.5% for financial S corporations) in the current year may also be carried forward and used in future years to offset the S corporation entity-level tax. See the instructions for Schedule Z, Part III for more information.
If a C corporation had unused credit carryovers when it elected S corporation status, the carryovers were reduced to 1/3 and transferred to the S corporation. The remaining 2/3 were disregarded. The allowable carryovers may be used to offset the 1.5% tax on net income in accordance with the respective carryover rules. These C corporation carryovers may not be passed through to shareholders. For more information, get Schedule C (100S), S Corporation Tax Credits.
Use credit code 211 to claim the MEA hiring credit on your tax return. Using an incorrect code may cause a delay in allowing the credit.
Instructions for Schedule Z – Computation of Credit Limitations
Reporting Requirements of S Corporations, Estates, Trusts, and Partnerships
- Partnerships and LLC’s treated as partnerships do not complete Schedule Z. However, the partners and members of these types of entities should compute their MEA income from all sources by completing the Schedule Z in order to determine the amount of the MEA hiring credit that they may claim on their California tax return. For individual partners, report the distributive share of all the business income apportioned to the MEA. For corporate partners, report the distributive share of the MEA property and payroll. Report these items as other information on Schedule K-1 (565).
- S corporations and their shareholders must complete Schedule Z.
- Report to shareholders, beneficiaries, partners, and members, the distributive or pro-rata share of business income, loss, and deductions apportioned to the MEA; and
- Separately state any distributive or pro-rata share of business capital gains and losses apportioned to the MEA included in the amount above.
Complete only Part I and Part III of Schedule Z if your entity-level tax before credits is more than the minimum franchise tax.
Corporations and S Corporations subject to the minimum franchise tax only
Complete only Part IV of Schedule Z.
Complete Part I and Part II of Schedule Z.
Part I – Computation of Credit Limitations
Enter all trade or business income. See Part II, Portion of Business Attributable to the Manufacturing Enhancement Area, for the definition of business income.
If your business is located entirely within the MEA, enter 1.
Specifically, this percentage is the apportionment percentage computed by the entity using Worksheet II, Section A, and it represents the percentage of the entity’s business income attributable to the MEA.
Compute the tax as if the MEA taxable income represented all of your taxable income.
Use the tax table or tax rate schedule in your tax booklet for your filing status.
Use the applicable tax rate in your tax booklet.
Corporations and S Corporations
Use the applicable tax rate.
If the amount on line 4a is the minimum franchise tax ($800), you cannot use your MEA hiring credit this year. You should complete Part IV of Schedule Z to compute the amount of credit carryover.
Example: Determination of MEA Income for Shareholders, Partners, or Members of Pass-Through Entities
John Anderson is vice president of ABC, Inc., an S corporation that has two locations: one within an MEA and one outside an MEA. Eighty percent (80%) of the S corporation’s business income is attributable to the MEA.
This percentage was determined by ABC, Inc. using Worksheet II, Section A, when ABC’s S corporation tax return (Form 100S) was prepared.
John divides his time equally (50/50) between the two offices of ABC, Inc. Jackie Anderson (John’s spouse/RDP) works for ABC, Inc. at its office located in the MEA.
John and Jackie Anderson have the following items of California income and expense for the 2017 taxable year:
- John’s salary from ABC, Inc: $100,000
- Jackie’s salary from ABC, Inc: 75,000
- Interest on savings account: 1,000
- Dividends: 3,000
- Schedule K-1 (100S) from ABC, Inc.: Ordinary income: 40,000
- John’s unreimbursed employee expenses from federal Schedule A: (2,000)
The Anderson’s MEA business income (total amount to be reported on line 3) is computed as follows:
- John’s MEA salary ($100,000 × 50%): $50,000
- Jackie’s MEA salary ($75,000 × 100%): 75,000
- Pass-through ordinary income from ABC, Inc. ($40,000 × 80%): 32,000
- John’s unreimbursed employee business expenses (2,000 × 50%): (1,000)
- Total MEA income (Schedule Z, Part I, line 3): $156,000
The standard deduction and personal or dependency exemptions are not included in the computation of MEA business income since they are not related to trade or business activities.
John and Jackie must compute the tax (to be entered on Schedule Z, Part I, line 4a) on the total MEA income of $156,000 (as if it represents all of their income).
Corporations and S Corporations: the amount on line 4b is the minimum franchise tax ($800), you cannot use your MEA hiring credit this year. You should complete Part IV of Schedule Z to compute the amount of credit carryover.
Part II – Limitation of Credits for Corporations, Individuals, Estates, and Trusts
Individuals that received a Schedule K-1, complete Schedule Z, Part II, using the information from the Schedule K-1.
Corporations, individuals, estates, or trusts, use Schedule Z, Part II. Corporations and S corporations that are subject to paying only the minimum franchise tax, use Schedule Z, Part IV.
Line 6A, column (f)
Enter the amount from line 5. This is the amount of limitation based on the tax on MEA business income.
Line 6A, column (g)
Enter the amount of credit that is used on Schedule P (100, 100W, 540, 540NR, or 541), column (b). The amount cannot be greater than the amount on line 6A, column (f) or the amount computed on line 6B, column (e). Enter this amount on form FTB 3808, Side 1, line 1.
Line 6B, column (b)
Enter the amount of the current year credit that was computed on Worksheet I. Individuals enter the current year hiring credit from the Schedule K-1.
Line 6B, column (c)
Enter the amount of the total prior year carryover credit. This is the amount of credit that was previously figured on Worksheet I in the prior year, minus the amount that was allowed to be taken on the prior year tax return.
Line 6B, column (d)
Enter the amount of credit assigned to affiliated corporations that are members of the same combined reporting group from form FTB 3544, column (g). Only C corporations who completed the form will enter an amount in this column. Individuals, and Estates and Trusts, leave blank and go to column (e) instructions.
Line 6B, column (e)
Add the amount of the current year credit on line 6B, column (b) and the amount of the total prior year carryover on line 6B, column (c), then subtract the amount of the total credit assigned on line 6B, column (d), if any.
Line 6B, column (f)
Compare the amounts on line 6A, column (f) and line 6A, column (g). Enter the smaller amount.
Line 6B, column (h)
Subtract the amount on line 6B, column (f) from the amount on line 6B, column (e). Enter the result on line 6B, column (h). This is the amount of credit that can be carried over to future years. This carryover includes both the Schedule P (100, 100W, 540, 540NR, or 541) limitation and the limitation based on MEA business income.
Example: Part II
The ABC Business has $8,000 of tax. The business computed a credit limitation based on MEA income of $7,000 on Schedule Z, line 5.
The business has the following credits:
- Hiring credit — $500 and a $300 carryover from a prior year
Schedule Z, Part II would be computed as follows:
Part II: Limitation of Credits for Corporations, Individuals, Estates, and Trusts. See instructions.
Total prior year carryover
Total credit assigned from form FTB 3544, col. (g)
Total credit sum of col. (b) plus col. (c), minus col. (d)
Limitation based on MEA business income
Credit used on Sch. P
Can never be greater than col. (e) or col. (f)
Total credit carryover col. (e) minus col. (f)
|6 Hiring credit||A||Not Applicable||Not Applicable||Not Applicable||Not Applicable||7,000||800||Not Applicable|
Part III – Limitation of Credits for S Corporations Only
Use Part III of Schedule Z only if you are an S corporation.
Line 7, column (b)
Enter the amount of credit computed this year from Worksheet I. Also, enter this amount on Form 100S as follows:
- Schedule C, line 4
- Schedule K, line 13d
You may need to adjust your Schedule C (100S) to reflect the MEA tax limitation (Part I, line 5) on your credit after completing this worksheet.
Line 7, column (c)
Multiply the amount on line 7, column (b) by 1/3. Enter this amount in column (c). The amount in column (c) is the maximum amount of the current year credit that may be used by the S corporation to offset its 1.5% entity-level tax (3.5% for financial S corporations).
Line 7, column (d)
Enter the amount of the total prior year carryover of the credit (this is the amount of credit that was previously figured on Worksheet I in the prior year, minus the amount that was allowed to be taken on the prior year tax return).
Line 7, column (e)
Add the amount of the current year credit on line 7, column (c) and the amount of the total prior year carryover on line 7, column (d).
Line 7, column (f)
Enter the amount of credit that was used by the S corporation in the current year to offset its 1.5% entity-level tax (3.5% for financial S corporations). Enter this amount on form FTB 3808, Side 1, line 1.
Line 7, column (g)
Subtract the amount in column (f) from the amount in column (e). This is the amount of credit that can be carried over to future years and used by the S corporation.
Part IV – Limitation of Credits for Corporations and S Corporations Subject to Paying Only the Minimum Franchise Tax
Use Part IV of Schedule Z if you are a corporation or S corporation subject to paying only the minimum franchise tax.
Line 8, column (b)
Enter the amount of current year credit that was computed on Worksheet I. S corporations may enter only 1/3 of the amount from Worksheet I.
Line 8, column (c)
Enter the amount of the total prior year carryover of the credit. This is the amount of credit that was previously figured on Worksheet I in the prior year, minus the amount that was allowed to be taken on the prior year tax return.
Line 8, column (d)
Enter the amounts of credits assigned to affiliated corporations that are members of the same combined reporting group from form FTB 3544, column (g). Only C corporations who completed the form will enter an amount in this column. S corporations, leave blank and go to column (e) instructions.
Line 8, column (e)
Add the amount of the current year credit on line 8, column (b) and the amount of the total prior year carryover on line 8, column (c), then subtract the amount of credit assigned on line 8, column (d). This is the amount of credit that can be carried over to future years.
Standard Industrial Classification Manual, 1987 Edition (Partial Listing)
The Standard Industrial Classification (SIC) Manual classifies business activities based upon establishments, which are defined in the SIC Manual as an economic unit, generally at a single physical location, where business is conducted, or where services or industrial operations are performed. A taxpayer’s enterprise may consist of more than one establishment. The SIC Manual provides the following examples of establishments: A factory, mill, store, hotel, movie theater, mine, farm, ranch, bank, railroad depot, airline terminal, sales office, warehouse, or central administrative office. Where distinct and separate economic activities are performed at a single physical location (such as construction activities operated out of the same physical location as a lumber yard), each activity should be treated as a separate establishment where: (1) No one industry description in the SIC Manual includes such combined activities; (2) The employment in each economic activity is significant; and (3) Separate reports are prepared on the number of employees, their wages and salaries, sales or receipts, property and equipment, and other types of financial data, such as financial statements, job costing, and profit center accounting.
The SIC Manual is organized using a hierarchical structure. First by division, next by two-digit major groups within each division, then by three-digit industry groups within each major group, and finally by four-digit industry codes within each industry group.
For purposes of this publication, SIC Codes 0211 through 0291, Code 0723, or Codes 2011 through 3999 are listed since only taxpayers with establishments in these industry codes qualify for the MEA hiring credit.
The complete Standard Industrial Classification Manual, 1987 Edition, is available for purchase from:NATIONAL TECHNICAL INFORMATION SERVICE
5301 Shawnee Road
Alexandria, Virginia 22312
Order No. PB 87-100012
Or to view this manual, go to osha.gov and search for SIC code.
The four-digit industry codes within Division D of the SIC Manual are:
(nec means “not elsewhere classified”)
- Abrasive products
- Adhesives & sealants
- Agricultural chemicals, nec
- Air & gas compressors
- Aircraft parts & equipment, nec
- Aircraft engines & engine parts
- Alkalies & chlorine
- Aluminum extruded products
- Aluminum rolling & drawing, nec
- Aluminum foundries
- Aluminum sheet, plate, & foil
- Aluminum die-casting
- Ammunition, except for small arms, nec
- Analytical instruments
- Animal aquaculture
- Animal specialties, nec
- Animal & marine fats & oils
- Apparel belts
- Apparel & accessories, nec
- Architectural metal work
- Asbestos products
- Asphalt felts & coatings
- Asphalt paving mixtures & blocks
- Automatic vending machines
- Automotive & apparel trimmings
- Automotive stampings
- Bags: plastic, laminated, & coated
- Bags: uncoated paper & multiwall
- Ball & roller bearings
- Beef cattle feedlots
- Beef cattle, except feedlots
- Beet sugar
- Biological products except diagnostic substances
- Blankbooks & looseleaf binders
- Blast furnace & steel mills
- Blowers & fans
- Boat building & repairing
- Bolts, nuts, rivets, & washers
- Book publishing
- Book printing
- Bookbinding & related work
- Bottled & canned soft drinks
- Bras, girdles, & allied garments
- Bread, cake, & related products
- Brick & structural clay tile
- Broadwoven fabric mills, cotton
- Broadwoven fabric mills, manmade
- Broiler, fryer, and roaster chickens
- Broadwoven fabric mills, wool
- Brooms & brushes
- Burial caskets
- Calculating & accounting equipment
- Candy & other confectionery products
- Cane sugar refining
- Canned fruits & vegetables
- Canned & cured fish & seafood
- Canned specialties
- Canvas & related products
- Carbon paper & inked ribbons
- Carbon black
- Carbon & graphite products
- Carburetors, pistons, rings, & valves
- Carpets & rugs
- Cellulosic manmade fiber
- Cement, hydraulic
- Ceramic wall & floor tile
- Cereal breakfast foods
- Cheese, natural & processed
- Chemical preparations, nec
- Chewing gum
- Chewing & smoking tobacco
- Chicken eggs
- Chocolate & cocoa products
- Clay refractories
- Coated fabrics, not rubberized
- Cold finishing of steel shapes
- Commercial printing, gravure
- Commercial printing, lithographic
- Commercial printing, nec
- Commercial laundry equipment
- Commercial lighting fixtures
- Communication equipment
- Computer peripheral equipment, nec
- Computer terminals
- Computer storage devices
- Concrete block & brick
- Concrete products, nec
- Construction machinery
- Converted paper products, nec
- Conveyors & conveying equipment
- Cookies & crackers
- Copper rolling & drawing
- Copper foundries
- Cordage & twine
- Corrugated & solid fiber boxes
- Costume jewelry
- Cottonseed oil
- Creamery butter
- Crop preparation services for market
- Crowns & closures
- Current-carrying wiring devices
- Curtains & draperies
- Custom compound purchased resins
- Cut stone & stone products
- Cyclic crudes & intermediates
- Dairy farms
- Dehydrated fruits, vegetables, & soups
- Dental equipment & supplies
- Die-cut paper products
- Distilled & blended liquors
- Dog & cat food
- Dolls & stuffed toys
- Drapery hardware & blinds & shades
- Dry, condensed, & evaporated dairy products
- Edible fats & oils, nec
- Electric lamps
- Electric housewares & fans
- Electrical equipment & supplies, nec
- Electrical industrial apparatus, nec
- Electromedical equipment
- Electrometallurgical products
- Electronic components, nec
- Electronic connectors
- Electron tubes
- Electronic capacitors
- Electronic resistors
- Electronic coils & transformers
- Electronic computers
- Elevators & moving stairways
- Engine electrical equipment
- Environmental controls
- Fabric dress & work gloves
- Fabricated metal products, nec
- Fabricated plate work (boiler shops)
- Fabricated pipe & fittings
- Fabricated rubber products, nec
- Fabricated structural metal
- Fabricated textile products, nec
- Farm machinery & equipment
- Fasteners, buttons, needles, & pins
- Fertilizers, mixing only
- Fiber cans, drums, & similar products
- Finishing plants, manmade
- Finishing plants, cotton
- Finishing plants, nec
- Flat glass
- Flavoring extracts & syrups, nec
- Flour & other grain mill products
- Fluid meters & counting devices
- Fluid power valves & hose fittings
- Fluid milk
- Fluid power pumps & motors
- Fluid power cylinders & actuators
- Folding paperboard boxes
- Food preparations, nec
- Food products machinery
- Footwear cut stock
- Footwear, except rubber, nec
- Fresh/frozen prepared fish/seafood
- Frozen bakery products, except bread
- Frozen specialties, nec
- Frozen fruits & vegetables
- Fur-bearing animals and rabbits
- Fur goods
- Furniture & fixtures, nec
- Games, toys, & children’s vehicles
- Gaskets, packing, & sealing devices
- General farms, primarily animal
- General industrial machinery, nec
- General livestock, nec
- Girls’ & children’s outerwear, nec
- Girls’ & children’s dresses, blouses
- Glass containers
- Gray & ductile iron foundries
- Greeting cards
- Guided missile & space vehicle parts
- Guided missile & space vehicle parts, nec
- Guided missiles & space vehicles
- Gum & wood chemicals
- Gypsum products
- Hand & edge tools, nec
- Hardsurface floor coverings, nec
- Hardware, nec
- Hardwood dimensions & flooring mills
- Hardwood veneer & plywood
- Hats, caps, & millinery
- Heating equip, except electric
- Hoists, cranes, & monorails
- Horses and other equines
- Hosiery, nec
- House furnishings, nec
- House slippers
- Household audio & video equipment
- Household vacuum cleaners
- Household cooking appliances
- Household laundry equipment
- Household appliances, nec
- Household furniture, nec
- Household refrigerators & freezers
- Ice cream & frozen desserts
- Industrial valves
- Industrial inorganic chem, nec
- Industrial machinery, nec
- Industrial organic chem, nec
- Industrial trucks & tractors
- Industrial gases
- Industrial patterns
- Industrial furnaces & ovens
- Inorganic pigments
- Instruments to measure electricity
- Internal combustion engines, nec
- In vitro & in vivo diagnostic substances
- Iron & steel forging
- Jewelers’ materials & lapidary work
- Jewelry, precious metal
- Knit outerwear mills
- Knit underwear mills
- Knitting mills, nec
- Laboratory apparatus & furniture
- Lace & warp knit fabric mills
- Laminated plastic plate & sheet
- Lawn & garden equipment
- Lead pencils & art goods
- Leather goods, nec
- Leather & sheep-lined clothing
- Leather tanning & finishing
- Leather gloves & mittens
- Lighting equipment
- Lubricating oils & greases
- Macaroni, spaghetti, & noodles
- Machine tools, metal cutting types
- Machine tool accessories
- Machine tools, metal forming type
- Magnetic & optical recording media
- Malleable iron foundries
- Malt beverages
- Manifold business forms
- Manufactured ice
- Manufacturing industries, nec
- Marking devices
- Mattresses & bedsprings
- Measuring & dispensing pumps
- Measuring & controlling devices, nec
- Meat packing plants
- Mechanical rubber goods
- Medicinal & botanicals
- Men’s & boys’ trousers & slacks
- Men’s footwear, except athletic
- Men’s & boys’ neckwear
- Men’s & boys’ clothing, nec
- Men’s & boys’ shirts
- Men’s & boys’ underwear & nightwear
- Men’s & boys’ work clothing
- Men’s & boys’ suits & coats
- Metal household furniture
- Metalworking machinery, nec
- Metal heat treating
- Metal cans
- Metal barrels, drums, & pails
- Metal sanitary ware
- Metal foil & leaf
- Metal coating & allied services
- Metal stampings, nec
- Metal door, sash, & trim
- Mineral wool
- Minerals, ground or treated
- Mining machinery
- Misc publishing
- Misc metal work
- Misc fabricated wire products
- Mobile homes
- Motor homes
- Motor vehicles & car bodies
- Motor & generators
- Motor vehicle parts & accessories
- Motorcycles, bicycles, & parts
- Musical instruments
- Nailed wood boxes & shook
- Narrow fabric mills
- Nitrogenous fertilizers
- Nonclay refractories
- Noncurrent-carrying wiring devices
- Nonferrous foundries, nec
- Nonferrous die-casting, except aluminum
- Nonferrous wiredrawing & insulating
- Nonferrous rolling & drawing, nec
- Nonferrous metals
- Nonferrous forging
- Nonmetallic mineral products, nec
- Nonwoven fabrics
- Office machines, nec
- Office furniture, except wood
- Oil & gas field machinery
- Ophthalmic goods
- Optical instruments & lenses
- Ordnance & accessories, nec
- Organic fibers, noncellulosic
- Packaging machinery
- Paints & allied products
- Paper industries machinery
- Paper mills
- Paper coated & laminated, packaging
- Paper coated & laminated, nec
- Paperboard mills
- Partitions & fixtures, except wood
- Pens & mechanical pencils
- Personal leather goods, nec
- Petroleum refining
- Petroleum & coal products, nec
- Pharmaceutical preparations
- Phosphatic fertilizers
- Photographic equipment & supplies
- Pickles, sauces, & salad dressing
- Plastic bottles
- Plastic foam products
- Plastic materials & resins
- Plastic pipe
- Plastic plumbing fixtures
- Plastic products, nec
- Platemaking service
- Plating & polishing
- Pleating & stitching
- Plumbing fixture fittings & trim
- Polishes & sanitation goods
- Porcelain electrical supplies
- Potato chips & similar snacks
- Pottery products, nec
- Poultry hatcheries
- Poultry and eggs, nec
- Poultry slaughtering & processing
- Power transmission equipment, nec
- Power-driven handtools
- Prefabricated metal buildings
- Prefabricated wood buildings
- Prepared flour mixes & doughs
- Prepared feeds, nec
- Prerecorded records & tapes
- Pressed & blown glass, nec
- Primary metal products, nec
- Primary nonferrous metals, nec
- Primary aluminum
- Primary copper
- Primary batteries, dry & wet
- Printed circuit boards
- Printing ink
- Printing trades machinery
- Process control instruments
- Products of purchased glass
- Public building & related furniture
- Pulp mills
- Pumps & pumping equipment
- Radio, TV, & communications equipment
- Railroad equipment
- Raw sugar cane
- Ready-mixed concrete
- Reconstituted wood products
- Refrigeration & heating equipment
- Relays & industrial controls
- Residential lighting fixtures
- Rice milling
- Roasted coffee
- Robes & dressing gowns
- Rolling mill machinery
- Rubber & plastic hose & belting
- Rubber & plastic footwear
- Salted & roasted nuts & seeds
- Sanitary food containers
- Sanitary paper products
- Sausages & other prepared meats
- Saw blades & handsaws
- Sawmills & planing mills, general
- Scales & balances, except laboratory
- Schiffli machine embroideries
- Screw machine products
- Search & navigation equipment
- Semiconductors & related devices
- Semivitreous table & kitchenware
- Service industry machinery, nec
- Setup paperboard boxes
- Sheep and goats
- Sheet metal work
- Ship building & repairing
- Signs & advertising specialties
- Silverware and plate ware
- Small arms
- Small arms ammunition
- Soap & other detergents
- Softwood veneer & plywood
- Soybean oil mills
- Space vehicle equipment & parts
- Space propulsion units & parts
- Special product sawmills, nec
- Special dies, tools, jigs, & fixtures
- Special industry machinery, nec
- Speed changers, drives, & gears
- Sporting & athletic goods, nec
- Stationery products
- Steel springs, except wire
- Steel wire & related products
- Steel pipe & tubes
- Steel foundries, nec
- Steel investment foundries
- Storage batteries
- Structural clay products, nec
- Structural wood members, nec
- Surface active agents
- Surgical & medical instruments
- Surgical appliances & supplies
- Switchgear & switchboard apparatus
- Synthetic rubber
- Tanks & tank components
- Telephone & telegraph apparatus
- Textile machinery
- Textile bags
- Textile goods, nec
- Thread mills
- Throwing & winding mills
- Tire cord & fabrics
- Tires & inner tubes
- Tobacco stemming & redrying
- Toilet preparations
- Transformers, except electronic
- Transportation equipment, nec
- Travel trailers & campers
- Truck & bus bodies
- Truck trailers
- Turbines & turbines generator sets
- Turkey and turkey eggs
- Unsupported plastic profile shapes
- Unsupported plastic film & sheet
- Upholstered household furniture
- Valves & pipe fittings, nec
- Vegetable oil mills, nec
- Vehicular lighting equipment
- Vitreous plumbing fixtures
- Vitreous china table & kitchenware
- Watches, clocks, & parts
- Waterproof outerwear
- Weft knit fabric mills
- Welding apparatus
- Wet corn milling
- Wines, brandy, & brandy spirits
- Wire springs
- Women’s & misses’ suits & coats
- Women’s, juniors’, & misses’ dresses
- Women’s & children’s underwear
- Women’s hosiery, except socks
- Women’s & misses’ outerwear, nec
- Women’s & misses’ blouses & shirts
- Women’s handbags and purses
- Women’s footwear, except athletic
- Wood preserving
- Wood products, nec
- Wood kitchen cabinets
- Wood partitions & fixtures
- Wood office furniture
- Wood TV & radio cabinets
- Wood containers, nec
- Wood household furniture
- Wood pallets & skids
- Woodworking machinery
- X-ray apparatus & tubes
- Yarn spinning mills
Principal Business Activity Codes
This list of principal business activities and their associated codes is designed to classify a business by the type of activity in which it is engaged to facilitate the administration of the California Revenue and Taxation Code. These principal business activity codes are based on the North American Industry Classification System published by the United States Office of Management and Budget, 1997 Edition.
For purposes of qualifying for the MEA tax incentive, refer to the Standard Industrial Classification Manual, 1987 Edition and the partial listing on pages 15 and 16 of this booklet.
Agriculture, Forestry, Fishing, and Hunting
- Oilseed & Grain Farming
- Vegetable & Melon Farming (including potatoes & yams)
- Fruit & Tree Nut Farming
- Greenhouse, Nursery, & Floriculture Production
- Other Crop Farming (including tobacco, cotton, sugarcane, hay, peanut, sugar beet, & all other crop farming)
- Beef Cattle Ranching & Farming
- Cattle Feedlots
- Dairy Cattle & Milk Production
- Hog & Pig Farming
- Poultry & Egg Production
- Sheep & Goat Farming
- Aquaculture (including shellfish & finfish farms & hatcheries)
- Other Animal Production
Forestry and Logging
- Timber Tract Operations
- Forest Nurseries & Gathering of Forest Products
Fishing, Hunting and Trapping
- Hunting & Trapping
Support Activities for Agriculture and Forestry
- Support Activities for Crop Production (including cotton ginning, soil preparation, planting, & cultivating)
- Support Activities for Animal Production
- Support Activities for Forestry
- Crude Petroleum Extraction
- Natural Gas Extraction
- Coal Mining
- Metal Ore Mining
- Stone Mining & Quarrying
- Sand, Gravel, Clay, & Ceramic & Refractory Mineral Mining & Quarrying
- Other Nonmetallic Mineral Mining & Quarrying
- Support Activities for Mining
- Electric Power Generation, Transmission & Distribution
- Natural Gas Distribution
- Water, Sewage, & Other Systems
- Combination Gas and Electric
Construction of Buildings
- Residential Building Construction
- Nonresidential Building Construction
Heavy and Civil Engineering Construction
- Utility System Construction
- Land Subdivision
- Highway, Street, & Bridge Construction
- Other Heavy & Civil Engineering Construction
Specialty Trade Contractors
- Foundation, Structure, & Building Exterior Contractors (including framing carpentry, masonry, glass, roofing, & siding)
- Electrical Contractors
- Plumbing, Heating, & Air-Conditioning Contractors
- Other Building Equipment Contractors
- Building Finishing Contractors (including drywall, insulation, painting, wallcovering, flooring, tile, & finish carpentry)
- Other Specialty Trade Contractors (including site preparation)
- Animal Food Mfg
- Grain & Oilseed Milling
- Sugar & Confectionery Product Mfg
- Fruit & Vegetable Preserving & Specialty Food Mfg
- Dairy Product Mfg
- Animal Slaughtering and Processing
- Seafood Product Preparation & Packaging
- Bakeries, Tortilla & Dry Pasta Mfg
- Other Food Mfg (including coffee, tea, flavorings, & seasonings)
Beverage and Tobacco Product Manufacturing
- Soft Drink & Ice Mfg
- Tobacco Manufacturing
Textile Mills and Textile Product Mills
- Textile Mills
- Textile Product Mills
- Apparel Knitting Mills
- Cut & Sew Apparel Contractors
- Men’s & Boys’ Cut & Sew Apparel Mfg
- Women’s, Girls’ and Infants’ Cut and Sew Apparel Mfg
- Other Cut & Sew Apparel Mfg
- Apparel Accessories & Other Apparel Mfg
Leather and Allied Product Manufacturing
- Leather & Hide Tanning & Finishing
- Footwear Mfg (including rubber & plastics)
- Other Leather & Allied Product Mfg
Wood Product Manufacturing
- Sawmills & Wood Preservation
- Veneer, Plywood, & Engineered Wood Product Mfg
- Other Wood Product Mfg
- Pulp, Paper, & Paperboard Mills
- Converted Paper Product Mfg
Printing and Related Support Activities
- Printing & Related Support Activities
Petroleum and Coal Products Manufacturing
- Petroleum Refineries (including integrated)
- Asphalt Paving, Roofing, & Saturated Materials Mfg
- Other Petroleum & Coal Products Mfg
- Basic Chemical Mfg
- Resin, Synthetic Rubber, & Artificial & Synthetic Fibers & Filaments Mfg
- Pesticide, Fertilizer, & Other Agricultural Chemical Mfg
- Pharmaceutical & Medicine Mfg
- Paint, Coating, & Adhesive Mfg
- Soap, Cleaning Compound, & Toilet Preparation Mfg
- Other Chemical Product & Preparation Mfg
Plastics and Rubber Products Manufacturing
- Plastics Product Mfg
- Rubber Product Mfg
Nonmetallic Mineral Product Manufacturing
- Clay Product & Refractory Mfg
- Glass & Glass Product Mfg
- Cement & Concrete Product Mfg
- Lime & Gypsum Product Mfg
- Other Nonmetallic Mineral Product Mfg
Primary Metal Manufacturing
- Iron & Steel Mills & Ferroalloy Mfg
- Steel Product Mfg from Purchased Steel
- Alumina & Aluminum Production & Processing
- Nonferrous Metal (except Aluminum) Production & Processing
Fabricated Metal Product Manufacturing
- Forging & Stamping
- Cutlery & Handtool Mfg
- Architectural & Structural Metals Mfg
- Boiler, Tank, & Shipping Container Mfg
- Hardware Mfg
- Spring & Wire Product Mfg
- Machine Shops; Turned Product; & Screw, Nut, & Bolt Mfg
- Coating, Engraving, Heat Treating, & Allied Activities
- Other Fabricated Metal Product Mfg
- Agriculture, Construction, & Mining Machinery Mfg
- Industrial Machinery Mfg
- Commercial & Service Industry Machinery Mfg
- Ventilation, Heating, Air-Conditioning, & Commercial Refrigeration Equipment Mfg
- Metalworking Machinery Mfg
- Engine, Turbine, & Power Transmission Equipment Mfg
- Other General Purpose Machinery Mfg
Computer and Electronic Product Manufacturing
- Computer & Peripheral Equipment Mfg
- Communications Equipment Mfg
- Audio & Video Equipment Mfg
- Semiconductor & Other Electronic Component Mfg
- Navigational, Measuring, Electromedical, & Control Instruments Mfg
- Manufacturing & Reproducing Magnetic & Optical Media
Electrical Equipment, Appliance, and Component Manufacturing
- Electric Lighting Equipment Mfg
- Major Household Appliance Mfg
- Electrical Equipment Mfg
- Other Electrical Equipment & Component Mfg
Transportation Equipment Manufacturing
- Motor Vehicle Mfg
- Motor Vehicle Body & Trailer Mfg
- Motor Vehicle Parts Mfg
- Aerospace Product & Parts Mfg
- Railroad Rolling Stock Mfg
- Ship & Boat Building
- Other Transportation Equipment Mfg
Furniture and Related Product Manufacturing
- Furniture & Related Product Manufacturing
- Medical Equipment & Supplies Mfg
- Other Miscellaneous Manufacturing
Merchant Wholesalers, Durable Goods
- Motor Vehicle & Motor Vehicle Parts & Supplies
- Furniture & Home Furnishings
- Lumber & Other Construction Materials
- Professional & Commercial Equipment & Supplies
- Metal & Mineral (except Petroleum)
- Household Appliances and Electrical and Electronic Goods
- Hardware, & Plumbing & Heating Equipment & Supplies
- Machinery, Equipment, & Supplies
- Sporting & Recreational Goods & Supplies
- Toy & Hobby Goods & Supplies
- Recyclable Materials
- Jewelry, Watch, Precious Stone, & Precious Metals
- Other Miscellaneous Durable Goods
Merchant Wholesalers, Nondurable Goods
- Paper & Paper Products
- Drugs & Druggists’ Sundries
- Apparel, Piece Goods, & Notions
- Grocery & Related Products
- Farm Product Raw Materials
- Chemical & Allied Products
- Petroleum & Petroleum Products
- Beer, Wine, & Distilled Alcoholic Beverages
- Farm Supplies
- Book, Periodical, & Newspapers
- Flower, Nursery Stock, & Florists’ Supplies
- Tobacco & Tobacco Products
- Paint, Varnish, & Supplies
- Other Miscellaneous Nondurable Goods
Wholesale Electronic Markets and Agents and Brokers
- Business to Business Electronic Markets
- Wholesale Trade Agents & Brokers
Motor Vehicle and Parts Dealers
- New Car Dealers
- Used Car Dealers
- Recreational Vehicle Dealers
- Boat Dealers
- Motorcycle, ATV, and All Other Motor Vehicle Dealers
- Automotive Parts, Accessories, & Tire Stores
Furniture and Home Furnishings Stores
- Furniture Stores
- Floor Covering Stores
- Window Treatment Stores
- All Other Home Furnishings Stores
Electronics and Appliance Stores
- Household Appliance Stores
- Electronics Stores (including Audio, Video, Computer, and Camera Stores)
Building Material and Garden Equipment and Supplies Dealers
- Home Centers
- Paint & Wallpaper Stores
- Hardware Stores
- Other Building Material Dealers
- Lawn & Garden Equipment & Supplies Stores
Food and Beverage Stores
- Supermarkets and Other Grocery (except Convenience) Stores
- Convenience Stores
- Meat Markets
- Fish & Seafood Markets
- Fruit & Vegetable Markets
- Baked Goods Stores
- Confectionery & Nut Stores
- All Other Specialty Food Stores
- Beer, Wine, & Liquor Stores
Health and Personal Care Stores
- Pharmacies & Drug Stores
- Cosmetics, Beauty Supplies, & Perfume Stores
- Optical Goods Stores
- Other Health & Personal Care Stores
- Gasoline Stations (including convenience stores with gas)
Clothing and Clothing Accessories Stores
- Men’s Clothing Stores
- Women’s Clothing Stores
- Children’s & Infants’ Clothing Stores
- Family Clothing Stores
- Clothing Accessories Stores
- Other Clothing Stores
- Shoe Stores
- Jewelry Stores
- Luggage & Leather Goods Stores
Sporting Goods, Hobby, Book, and Music Stores
- Sporting Goods Stores
- Hobby, Toy, & Game Stores
- Sewing, Needlework, & Piece Goods Stores
- Musical Instrument & Supplies Stores
- Book Stores
- News Dealers & Newsstands
General Merchandise Stores
- Department Stores
- General Merchandise Stores, incl. Warehouse Clubs and Supercenters
Miscellaneous Store Retailers
- Office Supplies & Stationery Stores
- Gift, Novelty, & Souvenir Stores
- Used Merchandise Stores
- Pet & Pet Supplies Stores
- Art Dealers
- Manufactured (Mobile) Home Dealers
- All Other Miscellaneous Store Retailers (including tobacco, candle, & trophy shops)
- Electronic Shopping & Mail-Order Houses
- Vending Machine Operators
- Fuel Dealers (including Heating Oil and Liquefied Petroleum)
- Other Direct Selling Establishments (including door-to-door retailing, frozen food plan providers, party plan merchandisers, & coffee-break service providers)
Transportation and Warehousing
Air, Rail, and Water Transportation
- Air Transportation
- Rail Transportation
- Water Transportation
- General Freight Trucking, Local
- General Freight Trucking, Long-distance
- Specialized Freight Trucking
Transit and Ground Passenger Transportation
- Urban Transit Systems
- Interurban & Rural Bus Transportation
- Taxi Service
- Limousine Service
- School & Employee Bus Transportation
- Charter Bus Industry
- Other Transit & Ground Passenger Transportation
- Pipeline Transportation
Scenic & Sightseeing Transportation
- Scenic & Sightseeing Transportation
Support Activities for Transportation
- Support Activities for Air Transportation
- Support Activities for Rail Transportation
- Support Activities for Water Transportation
- Motor Vehicle Towing
- Other Support Activities for Road Transportation
- Freight Transportation Arrangement
- Other Support Activities for Transportation
Couriers and Messengers
- Local Messengers & Local Delivery
Warehousing and Storage
- Warehousing & Storage (except lessors of miniwarehouses & self- storage units)
Publishing Industries (except Internet)
- Newspaper Publishers
- Periodical Publishers
- Book Publishers
- Directory & Mailing List Publishers
- Other Publishers
- Software Publishers
Motion Picture and Sound Recording Industries
- Motion Picture & Video Industries (except video rental)
- Sound Recording Industries
Broadcasting (except Internet)
- Radio & Television Broadcasting
- Cable & Other Subscription Programming
- Telecommunications (including paging, cellular, satellite, cable & other program distribution, resellers, & other telecommunications & internet service providers)
Data Processing Services
- Data Processing, Hosting, & Related Services
Other Information Services
- Other Information Services (including news syndicates, libraries, internet publishing & broadcasting)
Finance and Insurance
Depository Credit Intermediation
- Commercial Banking
- Savings Institutions
- Credit Unions
- Other Depository Credit Intermediation
Nondepository Credit Intermediation
- Credit Card Issuing
- Sales Financing
- Consumer Lending
- Real Estate Credit (including mortgage bankers & originators)
- International Trade Financing
- Secondary Market Financing
- All Other Nondepository Credit Intermediation
Activities Related to Credit Intermediation
- Activities Related to Credit Intermediation (including loan brokers, check clearing, & money transmitting)
Securities, Commodity Contracts, and Other Financial Investments and Related Activities
- Investment Banking & Securities Dealing
- Securities Brokerage
- Commodity Contracts Dealing
- Commodity Contracts Brokerage
- Securities & Commodity Exchanges
- Other Financial Investment Activities (including portfolio management & investment advice)
Insurance Carriers and Related Activities
- Direct Life, Health, & Medical Insurance Carriers
- Direct Insurance (except Life, Health, & Medical) Carriers
- Insurance Agencies & Brokerages
- Other Insurance Related Activities (including third-party administration of insurance and pension funds)
Funds, Trusts, and Other Financial Vehicles
- Insurance & Employee Benefit Funds
- Open-End Investment Funds (Form 1120-RIC)
- Trusts, Estates, & Agency Accounts
- Other Financial Vehicles (including mortgage REITS & closed-end investment funds)
“Offices of Bank Holding Companies” and “Offices of Other Holding Companies” are located under Management of Companies (Holding Companies) on next page.
Real Estate and Rental and Leasing
- Lessors of Residential Buildings & Dwellings (including equity REITs)
- Lessors of Nonresidential Buildings (except Miniwarehouses) (including equity REITs)
- Lessors of Miniwarehouses & Self-Storage Units (including equity REITs)
- Lessors of Other Real Estate Property (including equity REITs)
- Offices of Real Estate Agents & Brokers
- Real Estate Property Managers
- Offices of Real Estate Appraisers
- Other Activities Related to Real Estate
Rental and Leasing Services
- Automotive Equipment Rental & Leasing
- Consumer Electronics & Appliances Rental
- Formal Wear & Costume Rental
- Video Tape & Disc Rental
- Home Health Equipment Rental
- Recreational Goods Rental
- All Other Consumer Goods Rental
- General Rental Centers
- Commercial & Industrial Machinery & Equipment Rental & Leasing
Lessors of Nonfinancial Intangible Assets (except copyrighted works)
- Lessors of Nonfinancial Intangible Assets (except copyrighted works)
Professional, Scientific, and Technical Services
- Offices of Lawyers
- Other Legal Services
Accounting, Tax Preparation, Bookkeeping, and Payroll Services
- Offices of Certified Public Accountants
- Tax Preparation Services
- Payroll Services
- Other Accounting Services
Architectural, Engineering, and Related Services
- Architectural Services
- Landscape Architecture Services
- Engineering Services
- Drafting Services
- Building Inspection Services
- Geophysical Surveying & Mapping Services
- Surveying & Mapping (except Geophysical) Services
- Testing Laboratories
Specialized Design Services
- Specialized Design Services (including interior, industrial, graphic, & fashion design)
Computer Systems Design and Related Services
- Custom Computer Programming Services
- Computer Systems Design Services
- Computer Facilities Management Services
- Other Computer Related Services
Other Professional, Scientific, and Technical Services
- Management, Scientific, & Technical Consulting Services
- Scientific Research & Development Services
- Advertising & Related Services
- Marketing Research & Public Opinion Polling
- Photographic Services
- Translation & Interpretation Services
- Veterinary Services
- All Other Professional, Scientific, & Technical Services
Management of Companies (Holding Companies)
- Offices of Bank Holding Companies
- Offices of Other Holding Companies
Administrative and Support and Waste Management and Remediation Services
Administrative and Support Services
- Office Administrative Services
- Facilities Support Services
- Employment Services
- Document Preparation Services
- Telephone Call Centers
- Business Service Centers (including private mail centers & copy shops)
- Collection Agencies
- Credit Bureaus
- Other Business Support Services (including repossession services, court reporting, & stenotype services)
- Travel Arrangement & Reservation Services
- Investigation & Security Services
- Exterminating & Pest Control Services
- Janitorial Services
- Landscaping Services
- Carpet & Upholstery Cleaning Services
- Other Services to Buildings & Dwellings
- Other Support Services (including packaging & labeling services, & convention & trade show organizers)
Waste Management and Remediation Services
- Waste Management & Remediation Services
- Educational Services (including schools, colleges, & universities)
Health Care and Social Assistance
Offices of Physicians and Dentists
- Offices of Physicians (except mental health specialists)
- Offices of Physicians, Mental Health Specialists
- Offices of Dentists
Offices of Other Health Practitioners
- Offices of Chiropractors
- Offices of Optometrists
- Offices of Mental Health Practitioners (except Physicians)
- Offices of Physical, Occupational & Speech Therapists, & Audiologists
- Offices of Podiatrists
- Offices of All Other Miscellaneous Health Practitioners
Outpatient Care Centers
- Family Planning Centers
- Outpatient Mental Health & Substance Abuse Centers
- HMO Medical Centers
- Kidney Dialysis Centers
- Freestanding Ambulatory Surgical & Emergency Centers
- All Other Outpatient Care Centers
Medical and Diagnostic Laboratories
- Medical & Diagnostic Laboratories
Home Health Care Services
- Home Health Care Services
Other Ambulatory Health Care Services
- Other Ambulatory Health Care Services (including ambulance services & blood & organ banks)
Nursing and Residential Care Facilities
- Nursing & Residential Care Facilities
- Individual & Family Services
- Community Food & Housing, & Emergency & Other Relief Services
- Vocational Rehabilitation Services
- Child Day Care Services
Arts, Entertainment, and Recreation
Performing Arts, Spectator Sports, and Related Industries
- Performing Arts Companies
- Spectator Sports (including sports clubs & racetracks)
- Promoters of Performing Arts, Sports, & Similar Events
- Agents & Managers for Artists, Athletes, Entertainers, & Other Public Figures
- Independent Artists, Writers, & Performers
Museums, Historical Sites, and Similar Institutions
- Museums, Historical Sites, & Similar Institutions
Amusement, Gambling, and Recreation Industries
- Amusement Parks & Arcades
- Gambling Industries
- Other Amusement & Recreation Industries (including golf courses, skiing facilities, marinas, fitness centers, & bowling centers)
Accommodation and Food Services
- Hotels (except Casino Hotels) & Motels
- Casino Hotels
- Bed & Breakfast Inns
- All Other Traveler Accommodation
- RV (Recreational Vehicle) Parks & Recreational Camps
- Rooming & Boarding Houses Dormitories, & Workers’ Camps
Food Services and Drinking Places
- Special Food Services (including food service contractors & caterers)
- Drinking Places (Alcoholic Beverages)
- Full Service Restaurants
- Limited Service Restaurants
- Cafeterias and Buffets
- Snack and Non-alcoholic Beverage Bars
Repair and Maintenance
- Automotive Mechanical & Electrical Repair & Maintenance
- Automotive Body, Paint, Interior, & Glass Repair
- Other Automotive Repair & Maintenance (including oil change & lubrication shops & car washes)
- Electronic & Precision Equipment Repair & Maintenance
- Commercial & Industrial Machinery & Equipment (except Automotive & Electronic) Repair & Maintenance
- Home & Garden Equipment & Appliance Repair & Maintenance
- Reupholstery & Furniture Repair
- Footwear & Leather Goods Repair
- Other Personal & Household Goods Repair & Maintenance
Personal and Laundry Services
- Barber Shops
- Beauty Salons
- Nail Salons
- Other Personal Care Services (including diet & weight reducing centers)
- Funeral Homes & Funeral Services
- Cemeteries & Crematories
- Coin-Operated Laundries & Drycleaners
- Drycleaning & Laundry Services (except Coin-Operated)
- Linen & Uniform Supply
- Pet Care (except Veterinary) Services
- Parking Lots & Garages
- All Other Personal Services
Religious, Grantmaking, Civic, Professional, and Similar Organizations
- Religious, Grantmaking, Civic, Professional, & Similar Organizations (including condominium and homeowners associations)
How to Get California Tax Information
(Keep This Page For Future Use)
Your Rights as a Taxpayer
Our goal at the FTB is to make certain that your rights are protected so that you will have the highest confidence in the integrity, efficiency, and fairness of our state tax system. FTB 4058, California Taxpayers’ Bill of Rights, includes information on your rights as a California taxpayer, the Taxpayers’ Rights Advocate Program, and how you can request written advice from the FTB on whether a particular transaction is taxable. See “Where to Get Tax Forms and Publications” below.
Where to Get Tax Forms and Publications
You can download, view, and print California tax forms and publications at ftb.ca.gov/forms.
Access other state agencies’ websites at ca.gov.
To order current year California tax forms and publications, call our automated phone service. Refer to the list in your tax booklet and find the code for the form you want to order. Call 800.338.0505 and follow the recorded instructions.
Allow two weeks to receive your order. If you live outside California, allow three weeks to receive your order.
Many post offices and libraries provide free California personal income tax booklets during the filing season.
Employees at libraries, post offices, and quick print businesses cannot provide tax information or assistance.
Write to:TAX FORMS REQUEST UNIT
FRANCHISE TAX BOARD
PO BOX 307
RANCHO CORDOVA CA 95741-0307
If you write to us, be sure your letter includes your federal employer identification number (FEIN), California Secretary of State (SOS) file number, California corporation number, social security number (SSN) or individual taxpayer identification number (ITIN), your daytime and evening telephone numbers, and a copy of the notice (if applicable). Send your letter to:CORRESPONDENCE, ANALYSIS, SUPPORT
AND EDUCATION SECTION MS F-283
FRANCHISE TAX BOARD
PO BOX 1468
SACRAMENTO CA 95812-1468
We will respond to your letter within ten weeks. In some cases, we may need to call you for additional information.
Do not attach correspondence to your tax return unless the correspondence relates to an item on your tax return.
Internet and Telephone Assistance
Telephone assistance is available year-round from 7 a.m. until 5 p.m. Monday through Friday, except holidays. Hours subject to change.
- 800.852.5711 from within the United States
916.845.6500 from outside the United States
- 800.822.6268 for persons with hearing or speech disability
711 or 800.735.2929 California relay service
Asistencia Por Internet y Teléfono
Asistencia telefónica está disponible durante todo el año desde las 7 a.m. hasta las 5 p.m. de lunes a viernes, excepto días feriados. Las horas están sujetas a cambios.
- Sitio web:
- 800.852.5711 dentro de los Estados Unidos
916.845.6500 fuera de los Estados Unidos
- 800.822.6268 para personas con discapacidades auditivas o del habla
711 ó 800.735.2929 servicio de relevo de California
MEA Contact Information
For business eligibility or zone related information, including questions regarding MEA geographic boundaries and vouchering, contact the the HCD or the local zone program manager in which the business is located. Go to hcd.ca.gov and search for directory of zone contacts to find Directory of Economic Development Areas.
For information that is zone-specific but not tax-specific, contact the HCD at:DEPARTMENT OF HOUSING &
DIVISION OF FINANCIAL ASSISTANCE
ENTERPRISE ZONE PROGRAMS
2020 WEST EL CAMINO AVENUE,
SACRAMENTO, CA 95833
Mailing addressPO BOX 952054
SACRAMENTO CA 94252-2054
or for tax-specific information contact:
FRANCHISE TAX BOARD
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Last Updated: 02/06/2019