2017 Instructions for Form FTB 3808 Manufacturing Enhancement Area Business Booklet

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).

What’s New

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).

General Information

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The California legislature repealed and made changes to all of the Geographically Targeted.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 Enterprise Zones (EZ) and Local Agency Military Base Recovery Areas (LAMBRA) were repealed on January 1, 2014.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.

Minimum Wage

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.

Pass-Through Entities

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.

Introduction

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.”

Reporting Requirement

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.

Purpose

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.

Forms List

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:

1. A person receiving or determined to be eligible to receive services funded by the federal Job Training Partnership Act (JTPA), or its successor.
2. Any voluntary or mandatory registrant under the Greater Avenues for Independence Act of 1985 (GAIN), or its successor.
3. 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.

Example:

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:

Record Keeping

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.

Line 5

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).

Line 6

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.

Credit Limitations

• 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).

Line 2

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.

1. 	Qualified wages paid or incurred for year of employment
   (a) Employee’s name	(b) 1st year	(c) 2nd year	(d) 3rd year	(e) 4th year	(f) 5th year

2. Total. See instructions: (b) 1st year, (c) 2nd year, (d) 3rd year, (e) 4th year, (f) 5th year
3. 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
4. Add the amounts on line 3, column (b) through column (f)
5. Enter the total amount of 2017 California and federal jobs tax credits allowed. See instructions.
6. Subtract line 5 from line 4. See instructions.

Section B: Credit Recapture

1. (a) Terminated employee’s name	(b) Recapture amount

2. 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:

1. The distributive (or pro-rata for S corporations) share of the business income apportioned to the MEA.
2. The distributive (or pro-rata for S corporations) share of the business capital gains and losses apportioned to the MEA included in item 1.
3. 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.

Apportionment

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 Factor

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 Factor

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:

1. The employee’s services are performed within the geographical boundaries of the MEA.
2. 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.

3. 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:
   1. The employee’s base of operations is within the MEA.
   2. 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.
   3. 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:

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.

Property Factor

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).

Payroll Factor

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

Wages

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.

Example:

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).

Income Computation 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.

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

See instructions.

Part II: Pass-Through Income or Loss

See instructions.

Part III: Taxpayer’s Trade or Business

See instructions.

Schedule Z – Computation of Credit Limitations

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.

Other Limitations

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.

Carryover

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.

Credit Code

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.

S Corporations

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.

All others

Complete Part I and Part II of Schedule Z.

Part I – Computation of Credit Limitations

Line 1

Enter all trade or business income. See Part II, Portion of Business Attributable to the Manufacturing Enhancement Area, for the definition of business income.

Line 2

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.

Line 4a

Compute the tax as if the MEA taxable income represented all of your taxable income.

Individuals

Use the tax table or tax rate schedule in your tax booklet for your filing status.

Exempt Organizations

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).

Line 4b

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.

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:

Mail

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”)

3291

Abrasive products

2891

Adhesives & sealants

2879

Agricultural chemicals, nec

3563

Air & gas compressors

3728

Aircraft parts & equipment, nec

3724

Aircraft engines & engine parts

3721

Aircraft

2812

Alkalies & chlorine

3354

Aluminum extruded products

3355

Aluminum rolling & drawing, nec

3365

Aluminum foundries

3353

Aluminum sheet, plate, & foil

3363

Aluminum die-casting

3483

Ammunition, except for small arms, nec

3826

Analytical instruments

0273

Animal aquaculture

0279

Animal specialties, nec

2077

Animal & marine fats & oils

2387

Apparel belts

2389

Apparel & accessories, nec

3446

Architectural metal work

3292

Asbestos products

2952

Asphalt felts & coatings

2951

Asphalt paving mixtures & blocks

3581

Automatic vending machines

2396

Automotive & apparel trimmings

3465

Automotive stampings

2673

Bags: plastic, laminated, & coated

2674

Bags: uncoated paper & multiwall

3562

Ball & roller bearings

0211

Beef cattle feedlots

0212

Beef cattle, except feedlots

2063

Beet sugar

2836

Biological products except diagnostic substances

2782

Blankbooks & looseleaf binders

3312

Blast furnace & steel mills

3564

Blowers & fans

3732

Boat building & repairing

3452

Bolts, nuts, rivets, & washers

2731

Book publishing

2732

Book printing

2789

Bookbinding & related work

2086

Bottled & canned soft drinks

2342

Bras, girdles, & allied garments

2051

Bread, cake, & related products

3251

Brick & structural clay tile

2211

Broadwoven fabric mills, cotton

2221

Broadwoven fabric mills, manmade

0251

Broiler, fryer, and roaster chickens

2231

Broadwoven fabric mills, wool

3991

Brooms & brushes

3995

Burial caskets

3578

Calculating & accounting equipment

2064

Candy & other confectionery products

2062

Cane sugar refining

2033

Canned fruits & vegetables

2091

Canned & cured fish & seafood

2032

Canned specialties

2394

Canvas & related products

3955

Carbon paper & inked ribbons

2895

Carbon black

3624

Carbon & graphite products

3592

Carburetors, pistons, rings, & valves

2273

Carpets & rugs

2823

Cellulosic manmade fiber

3241

Cement, hydraulic

3253

Ceramic wall & floor tile

2043

Cereal breakfast foods

2022

Cheese, natural & processed

2899

Chemical preparations, nec

2067

Chewing gum

2131

Chewing & smoking tobacco

0252

Chicken eggs

2066

Chocolate & cocoa products

2111

Cigarettes

2121

Cigars

3255

Clay refractories

2295

Coated fabrics, not rubberized

3316

Cold finishing of steel shapes

2754

Commercial printing, gravure

2752

Commercial printing, lithographic

2759

Commercial printing, nec

3582

Commercial laundry equipment

3646

Commercial lighting fixtures

3669

Communication equipment

3577

Computer peripheral equipment, nec

3575

Computer terminals

3572

Computer storage devices

3271

Concrete block & brick

3272

Concrete products, nec

3531

Construction machinery

2679

Converted paper products, nec

3535

Conveyors & conveying equipment

2052

Cookies & crackers

3351

Copper rolling & drawing

3366

Copper foundries

2298

Cordage & twine

2653

Corrugated & solid fiber boxes

3961

Costume jewelry

2074

Cottonseed oil

2021

Creamery butter

0723

Crop preparation services for market

3466

Crowns & closures

3643

Current-carrying wiring devices

2391

Curtains & draperies

3087

Custom compound purchased resins

3281

Cut stone & stone products

3421

Cutlery

2865

Cyclic crudes & intermediates

0241

Dairy farms

2034

Dehydrated fruits, vegetables, & soups

3843

Dental equipment & supplies

2675

Die-cut paper products

2085

Distilled & blended liquors

2047

Dog & cat food

3942

Dolls & stuffed toys

2591

Drapery hardware & blinds & shades

2023

Dry, condensed, & evaporated dairy products

2079

Edible fats & oils, nec

3641

Electric lamps

3634

Electric housewares & fans

3699

Electrical equipment & supplies, nec

3629

Electrical industrial apparatus, nec

3845

Electromedical equipment

3313

Electrometallurgical products

3679

Electronic components, nec

3678

Electronic connectors

3671

Electron tubes

3675

Electronic capacitors

3676

Electronic resistors

3677

Electronic coils & transformers

3571

Electronic computers

3534

Elevators & moving stairways

3694

Engine electrical equipment

2677

Envelopes

3822

Environmental controls

2892

Explosives

2381

Fabric dress & work gloves

3499

Fabricated metal products, nec

3443

Fabricated plate work (boiler shops)

3498

Fabricated pipe & fittings

3069

Fabricated rubber products, nec

3441

Fabricated structural metal

2399

Fabricated textile products, nec

3523

Farm machinery & equipment

3965

Fasteners, buttons, needles, & pins

2875

Fertilizers, mixing only

2655

Fiber cans, drums, & similar products

2262

Finishing plants, manmade

2261

Finishing plants, cotton

2269

Finishing plants, nec

3211

Flat glass

2087

Flavoring extracts & syrups, nec

2041

Flour & other grain mill products

3824

Fluid meters & counting devices

3492

Fluid power valves & hose fittings

2026

Fluid milk

3594

Fluid power pumps & motors

3593

Fluid power cylinders & actuators

2657

Folding paperboard boxes

2099

Food preparations, nec

3556

Food products machinery

3131

Footwear cut stock

3149

Footwear, except rubber, nec

2092

Fresh/frozen prepared fish/seafood

2053

Frozen bakery products, except bread

2038

Frozen specialties, nec

2037

Frozen fruits & vegetables

0271

Fur-bearing animals and rabbits

2371

Fur goods

2599

Furniture & fixtures, nec

3944

Games, toys, & children’s vehicles

3053

Gaskets, packing, & sealing devices

0291

General farms, primarily animal

3569

General industrial machinery, nec

0219

General livestock, nec

2369

Girls’ & children’s outerwear, nec

2361

Girls’ & children’s dresses, blouses

3221

Glass containers

3321

Gray & ductile iron foundries

2771

Greeting cards

3764

Guided missile & space vehicle parts

3769

Guided missile & space vehicle parts, nec

3761

Guided missiles & space vehicles

2861

Gum & wood chemicals

3275

Gypsum products

3423

Hand & edge tools, nec

3996

Hardsurface floor coverings, nec

2429

Hardware, nec

2426

Hardwood dimensions & flooring mills

2435

Hardwood veneer & plywood

2353

Hats, caps, & millinery

3433

Heating equip, except electric

0213

Hogs

3536

Hoists, cranes, & monorails

0272

Horses and other equines

2252

Hosiery, nec

2392

House furnishings, nec

3142

House slippers

3651

Household audio & video equipment

3635

Household vacuum cleaners

3631

Household cooking appliances

3633

Household laundry equipment

3639

Household appliances, nec

2519

Household furniture, nec

3632

Household refrigerators & freezers

2024

Ice cream & frozen desserts

3491

Industrial valves

2819

Industrial inorganic chem, nec

3599

Industrial machinery, nec

2869

Industrial organic chem, nec

3537

Industrial trucks & tractors

2813

Industrial gases

3543

Industrial patterns

3567

Industrial furnaces & ovens

2816

Inorganic pigments

3825

Instruments to measure electricity

3519

Internal combustion engines, nec

2835

In vitro & in vivo diagnostic substances

3462

Iron & steel forging

3915

Jewelers’ materials & lapidary work

3911

Jewelry, precious metal

2253

Knit outerwear mills

2254

Knit underwear mills

2259

Knitting mills, nec

3821

Laboratory apparatus & furniture

2258

Lace & warp knit fabric mills

3083

Laminated plastic plate & sheet

3524

Lawn & garden equipment

3952

Lead pencils & art goods

3199

Leather goods, nec

2386

Leather & sheep-lined clothing

3111

Leather tanning & finishing

3151

Leather gloves & mittens

3648

Lighting equipment

3274

Lime

2411

Logging

2992

Lubricating oils & greases

3161

Luggage

2098

Macaroni, spaghetti, & noodles

3541

Machine tools, metal cutting types

3545

Machine tool accessories

3542

Machine tools, metal forming type

3695

Magnetic & optical recording media

3322

Malleable iron foundries

2083

Malt

2082

Malt beverages

2761

Manifold business forms

2097

Manufactured ice

3999

Manufacturing industries, nec

3953

Marking devices

2515

Mattresses & bedsprings

3586

Measuring & dispensing pumps

3829

Measuring & controlling devices, nec

2011

Meat packing plants

3061

Mechanical rubber goods

2833

Medicinal & botanicals

2325

Men’s & boys’ trousers & slacks

3143

Men’s footwear, except athletic

2323

Men’s & boys’ neckwear

2329

Men’s & boys’ clothing, nec

2321

Men’s & boys’ shirts

2322

Men’s & boys’ underwear & nightwear

2326

Men’s & boys’ work clothing

2311

Men’s & boys’ suits & coats

2514

Metal household furniture

3549

Metalworking machinery, nec

3398

Metal heat treating

3411

Metal cans

3412

Metal barrels, drums, & pails

3431

Metal sanitary ware

3497

Metal foil & leaf

3479

Metal coating & allied services

3469

Metal stampings, nec

3442

Metal door, sash, & trim

2431

Millwork

3296

Mineral wool

3295

Minerals, ground or treated

3532

Mining machinery

2741

Misc publishing

3449

Misc metal work

3496

Misc fabricated wire products

2451

Mobile homes

3716

Motor homes

3711

Motor vehicles & car bodies

3621

Motor & generators

3714

Motor vehicle parts & accessories

3751

Motorcycles, bicycles, & parts

3931

Musical instruments

2441

Nailed wood boxes & shook

2241

Narrow fabric mills

2711

Newspapers

2873

Nitrogenous fertilizers

3297

Nonclay refractories

3644

Noncurrent-carrying wiring devices

3369

Nonferrous foundries, nec

3364

Nonferrous die-casting, except aluminum

3357

Nonferrous wiredrawing & insulating

3356

Nonferrous rolling & drawing, nec

3341

Nonferrous metals

3463

Nonferrous forging

3299

Nonmetallic mineral products, nec

2297

Nonwoven fabrics

3579

Office machines, nec

2522

Office furniture, except wood

3533

Oil & gas field machinery

3851

Ophthalmic goods

3827

Optical instruments & lenses

3489

Ordnance & accessories, nec

2824

Organic fibers, noncellulosic

3565

Packaging machinery

2851

Paints & allied products

3554

Paper industries machinery

2621

Paper mills

2671

Paper coated & laminated, packaging

2672

Paper coated & laminated, nec

2631

Paperboard mills

2542

Partitions & fixtures, except wood

3951

Pens & mechanical pencils

2721

Periodicals

3172

Personal leather goods, nec

2911

Petroleum refining

2999

Petroleum & coal products, nec

2834

Pharmaceutical preparations

2874

Phosphatic fertilizers

3861

Photographic equipment & supplies

2035

Pickles, sauces, & salad dressing

3085

Plastic bottles

3086

Plastic foam products

2821

Plastic materials & resins

3084

Plastic pipe

3088

Plastic plumbing fixtures

3089

Plastic products, nec

2796

Platemaking service

3471

Plating & polishing

2395

Pleating & stitching

3432

Plumbing fixture fittings & trim

2842

Polishes & sanitation goods

3264

Porcelain electrical supplies

2096

Potato chips & similar snacks

3269

Pottery products, nec

0254

Poultry hatcheries

0259

Poultry and eggs, nec

2015

Poultry slaughtering & processing

3568

Power transmission equipment, nec

3546

Power-driven handtools

3448

Prefabricated metal buildings

2452

Prefabricated wood buildings

2045

Prepared flour mixes & doughs

2048

Prepared feeds, nec

3652

Prerecorded records & tapes

3229

Pressed & blown glass, nec

3399

Primary metal products, nec

3339

Primary nonferrous metals, nec

3334

Primary aluminum

3331

Primary copper

3692

Primary batteries, dry & wet

3672

Printed circuit boards

2893

Printing ink

3555

Printing trades machinery

3823

Process control instruments

3231

Products of purchased glass

2531

Public building & related furniture

2611

Pulp mills

3561

Pumps & pumping equipment

3663

Radio, TV, & communications equipment

3743

Railroad equipment

2061

Raw sugar cane

3273

Ready-mixed concrete

2493

Reconstituted wood products

3585

Refrigeration & heating equipment

3625

Relays & industrial controls

3645

Residential lighting fixtures

2044

Rice milling

2095

Roasted coffee

2384

Robes & dressing gowns

3547

Rolling mill machinery

3052

Rubber & plastic hose & belting

3021

Rubber & plastic footwear

2068

Salted & roasted nuts & seeds

2656

Sanitary food containers

2676

Sanitary paper products

2013

Sausages & other prepared meats

3425

Saw blades & handsaws

2421

Sawmills & planing mills, general

3596

Scales & balances, except laboratory

2397

Schiffli machine embroideries

3451

Screw machine products

3812

Search & navigation equipment

3674

Semiconductors & related devices

3263

Semivitreous table & kitchenware

3589

Service industry machinery, nec

2652

Setup paperboard boxes

0214

Sheep and goats

3444

Sheet metal work

3731

Ship building & repairing

3993

Signs & advertising specialties

3914

Silverware and plate ware

3484

Small arms

3482

Small arms ammunition

2841

Soap & other detergents

2436

Softwood veneer & plywood

2075

Soybean oil mills

3769

Space vehicle equipment & parts

3764

Space propulsion units & parts

2429

Special product sawmills, nec

3544

Special dies, tools, jigs, & fixtures

3559

Special industry machinery, nec

3566

Speed changers, drives, & gears

3949

Sporting & athletic goods, nec

2678

Stationery products

3493

Steel springs, except wire

3315

Steel wire & related products

3317

Steel pipe & tubes

3325

Steel foundries, nec

3324

Steel investment foundries

3691

Storage batteries

3259

Structural clay products, nec

2439

Structural wood members, nec

2843

Surface active agents

3841

Surgical & medical instruments

3842

Surgical appliances & supplies

3613

Switchgear & switchboard apparatus

2822

Synthetic rubber

3795

Tanks & tank components

3661

Telephone & telegraph apparatus

3552

Textile machinery

2393

Textile bags

2299

Textile goods, nec

2284

Thread mills

2282

Throwing & winding mills

2296

Tire cord & fabrics

3011

Tires & inner tubes

2141

Tobacco stemming & redrying

2844

Toilet preparations

3612

Transformers, except electronic

3799

Transportation equipment, nec

3792

Travel trailers & campers

3713

Truck & bus bodies

3715

Truck trailers

3511

Turbines & turbines generator sets

0253

Turkey and turkey eggs

2791

Typesetting

3082

Unsupported plastic profile shapes

3081

Unsupported plastic film & sheet

2512

Upholstered household furniture

3494

Valves & pipe fittings, nec

2076

Vegetable oil mills, nec

3647

Vehicular lighting equipment

3261

Vitreous plumbing fixtures

3262

Vitreous china table & kitchenware

3873

Watches, clocks, & parts

2385

Waterproof outerwear

2257

Weft knit fabric mills

3548

Welding apparatus

2046

Wet corn milling

2084

Wines, brandy, & brandy spirits

3495

Wire springs

2337

Women’s & misses’ suits & coats

2335

Women’s, juniors’, & misses’ dresses

2341

Women’s & children’s underwear

2251

Women’s hosiery, except socks

2339

Women’s & misses’ outerwear, nec

2331

Women’s & misses’ blouses & shirts

3171

Women’s handbags and purses

3144

Women’s footwear, except athletic

2491

Wood preserving

2499

Wood products, nec

2434

Wood kitchen cabinets

2541

Wood partitions & fixtures

2521

Wood office furniture

2517

Wood TV & radio cabinets

2449

Wood containers, nec

2511

Wood household furniture

2448

Wood pallets & skids

3553

Woodworking machinery

3844

X-ray apparatus & tubes

2281

Yarn spinning mills

FTB 3808
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

Crop Production

Code

 

111100

Oilseed & Grain Farming

111210

Vegetable & Melon Farming (including potatoes & yams)

111300

Fruit & Tree Nut Farming

111400

Greenhouse, Nursery, & Floriculture Production

111900

Other Crop Farming (including tobacco, cotton, sugarcane, hay, peanut, sugar beet, & all other crop farming)

Animal Production

112111

Beef Cattle Ranching & Farming

112112

Cattle Feedlots

112120

Dairy Cattle & Milk Production

112210

Hog & Pig Farming

112300

Poultry & Egg Production

112400

Sheep & Goat Farming

112510

Aquaculture (including shellfish & finfish farms & hatcheries)

112900

Other Animal Production

Forestry and Logging

113110

Timber Tract Operations

113210

Forest Nurseries & Gathering of Forest Products

113310

Logging

Fishing, Hunting and Trapping

114110

Fishing

114210

Hunting & Trapping

Support Activities for Agriculture and Forestry

115110

Support Activities for Crop Production (including cotton ginning, soil preparation, planting, & cultivating)

115210

Support Activities for Animal Production

115310

Support Activities for Forestry

Mining

211120

Crude Petroleum Extraction

211130

Natural Gas Extraction

212110

Coal Mining

212200

Metal Ore Mining

212310

Stone Mining & Quarrying

212320

Sand, Gravel, Clay, & Ceramic & Refractory Mineral Mining & Quarrying

212390

Other Nonmetallic Mineral Mining & Quarrying

213110

Support Activities for Mining

Utilities

221100

Electric Power Generation, Transmission & Distribution

221210

Natural Gas Distribution

221300

Water, Sewage, & Other Systems

221500

Combination Gas and Electric

Construction

Construction of Buildings

236110

Residential Building Construction

236200

Nonresidential Building Construction

Heavy and Civil Engineering Construction

237100

Utility System Construction

237210

Land Subdivision

237310

Highway, Street, & Bridge Construction

237990

Other Heavy & Civil Engineering Construction

Specialty Trade Contractors

238100

Foundation, Structure, & Building Exterior Contractors (including framing carpentry, masonry, glass, roofing, & siding)

238210

Electrical Contractors

238220

Plumbing, Heating, & Air-Conditioning Contractors

238290

Other Building Equipment Contractors

238300

Building Finishing Contractors (including drywall, insulation, painting, wallcovering, flooring, tile, & finish carpentry)

238900

Other Specialty Trade Contractors (including site preparation)

Manufacturing

Food Manufacturing

311110

Animal Food Mfg

311200

Grain & Oilseed Milling

311300

Sugar & Confectionery Product Mfg

311400

Fruit & Vegetable Preserving & Specialty Food Mfg

311500

Dairy Product Mfg

311610

Animal Slaughtering and Processing

311710

Seafood Product Preparation & Packaging

311800

Bakeries, Tortilla & Dry Pasta Mfg

311900

Other Food Mfg (including coffee, tea, flavorings, & seasonings)

Beverage and Tobacco Product Manufacturing

312110

Soft Drink & Ice Mfg

312120

Breweries

312130

Wineries

312140

Distilleries

312200

Tobacco Manufacturing

Textile Mills and Textile Product Mills

313000

Textile Mills

314000

Textile Product Mills

Apparel Manufacturing

315100

Apparel Knitting Mills

315210

Cut & Sew Apparel Contractors

315220

Men’s & Boys’ Cut & Sew Apparel Mfg

315240

Women’s, Girls’ and Infants’ Cut and Sew Apparel Mfg

315280

Other Cut & Sew Apparel Mfg

315990

Apparel Accessories & Other Apparel Mfg

Leather and Allied Product Manufacturing

316110

Leather & Hide Tanning & Finishing

316210

Footwear Mfg (including rubber & plastics)

316990

Other Leather & Allied Product Mfg

Wood Product Manufacturing

321110

Sawmills & Wood Preservation

321210

Veneer, Plywood, & Engineered Wood Product Mfg

321900

Other Wood Product Mfg

Paper Manufacturing

322100

Pulp, Paper, & Paperboard Mills

322200

Converted Paper Product Mfg

Printing and Related Support Activities

323100

Printing & Related Support Activities

Petroleum and Coal Products Manufacturing

324110

Petroleum Refineries (including integrated)

324120

Asphalt Paving, Roofing, & Saturated Materials Mfg

324190

Other Petroleum & Coal Products Mfg

Chemical Manufacturing

325100

Basic Chemical Mfg

325200

Resin, Synthetic Rubber, & Artificial & Synthetic Fibers & Filaments Mfg

325300

Pesticide, Fertilizer, & Other Agricultural Chemical Mfg

325410

Pharmaceutical & Medicine Mfg

325500

Paint, Coating, & Adhesive Mfg

325600

Soap, Cleaning Compound, & Toilet Preparation Mfg

325900

Other Chemical Product & Preparation Mfg

Plastics and Rubber Products Manufacturing

326100

Plastics Product Mfg

326200

Rubber Product Mfg

Nonmetallic Mineral Product Manufacturing

327100

Clay Product & Refractory Mfg

327210

Glass & Glass Product Mfg

327300

Cement & Concrete Product Mfg

327400

Lime & Gypsum Product Mfg

327900

Other Nonmetallic Mineral Product Mfg

Primary Metal Manufacturing

331110

Iron & Steel Mills & Ferroalloy Mfg

331200

Steel Product Mfg from Purchased Steel

331310

Alumina & Aluminum Production & Processing

331400

Nonferrous Metal (except Aluminum) Production & Processing

331500

Foundries

Fabricated Metal Product Manufacturing

332110

Forging & Stamping

332210

Cutlery & Handtool Mfg

332300

Architectural & Structural Metals Mfg

332400

Boiler, Tank, & Shipping Container Mfg

332510

Hardware Mfg

332610

Spring & Wire Product Mfg

332700

Machine Shops; Turned Product; & Screw, Nut, & Bolt Mfg

332810

Coating, Engraving, Heat Treating, & Allied Activities

332900

Other Fabricated Metal Product Mfg

Machinery Manufacturing

333100

Agriculture, Construction, & Mining Machinery Mfg

333200

Industrial Machinery Mfg

333310

Commercial & Service Industry Machinery Mfg

333410

Ventilation, Heating, Air-Conditioning, & Commercial Refrigeration Equipment Mfg

333510

Metalworking Machinery Mfg

333610

Engine, Turbine, & Power Transmission Equipment Mfg

333900

Other General Purpose Machinery Mfg

Computer and Electronic Product Manufacturing

334110

Computer & Peripheral Equipment Mfg

334200

Communications Equipment Mfg

334310

Audio & Video Equipment Mfg

334410

Semiconductor & Other Electronic Component Mfg

334500

Navigational, Measuring, Electromedical, & Control Instruments Mfg

334610

Manufacturing & Reproducing Magnetic & Optical Media

Electrical Equipment, Appliance, and Component Manufacturing

335100

Electric Lighting Equipment Mfg

335200

Major Household Appliance Mfg

335310

Electrical Equipment Mfg

335900

Other Electrical Equipment & Component Mfg

Transportation Equipment Manufacturing

336100

Motor Vehicle Mfg

336210

Motor Vehicle Body & Trailer Mfg

336300

Motor Vehicle Parts Mfg

336410

Aerospace Product & Parts Mfg

336510

Railroad Rolling Stock Mfg

336610

Ship & Boat Building

336990

Other Transportation Equipment Mfg

Furniture and Related Product Manufacturing

337000

Furniture & Related Product Manufacturing

Miscellaneous Manufacturing

339110

Medical Equipment & Supplies Mfg

339900

Other Miscellaneous Manufacturing

Wholesale Trade

Merchant Wholesalers, Durable Goods

423100

Motor Vehicle & Motor Vehicle Parts & Supplies

423200

Furniture & Home Furnishings

423300

Lumber & Other Construction Materials

423400

Professional & Commercial Equipment & Supplies

423500

Metal & Mineral (except Petroleum)

423600

Household Appliances and Electrical and Electronic Goods

423700

Hardware, & Plumbing & Heating Equipment & Supplies

423800

Machinery, Equipment, & Supplies

423910

Sporting & Recreational Goods & Supplies

423920

Toy & Hobby Goods & Supplies

423930

Recyclable Materials

423940

Jewelry, Watch, Precious Stone, & Precious Metals

423990

Other Miscellaneous Durable Goods

Merchant Wholesalers, Nondurable Goods

424100

Paper & Paper Products

424210

Drugs & Druggists’ Sundries

424300

Apparel, Piece Goods, & Notions

424400

Grocery & Related Products

424500

Farm Product Raw Materials

424600

Chemical & Allied Products

424700

Petroleum & Petroleum Products

424800

Beer, Wine, & Distilled Alcoholic Beverages

424910

Farm Supplies

424920

Book, Periodical, & Newspapers

424930

Flower, Nursery Stock, & Florists’ Supplies

424940

Tobacco & Tobacco Products

424950

Paint, Varnish, & Supplies

424990

Other Miscellaneous Nondurable Goods

Wholesale Electronic Markets and Agents and Brokers

425110

Business to Business Electronic Markets

425120

Wholesale Trade Agents & Brokers

Retail Trade

Motor Vehicle and Parts Dealers

441110

New Car Dealers

441120

Used Car Dealers

441210

Recreational Vehicle Dealers

441222

Boat Dealers

441228

Motorcycle, ATV, and All Other Motor Vehicle Dealers

441300

Automotive Parts, Accessories, & Tire Stores

Furniture and Home Furnishings Stores

442110

Furniture Stores

442210

Floor Covering Stores

442291

Window Treatment Stores

442299

All Other Home Furnishings Stores

Electronics and Appliance Stores

443141

Household Appliance Stores

443142

Electronics Stores (including Audio, Video, Computer, and Camera Stores)

Building Material and Garden Equipment and Supplies Dealers

444110

Home Centers

444120

Paint & Wallpaper Stores

444130

Hardware Stores

444190

Other Building Material Dealers

444200

Lawn & Garden Equipment & Supplies Stores

Food and Beverage Stores

445110

Supermarkets and Other Grocery (except Convenience) Stores

445120

Convenience Stores

445210

Meat Markets

445220

Fish & Seafood Markets

445230

Fruit & Vegetable Markets

445291

Baked Goods Stores

445292

Confectionery & Nut Stores

445299

All Other Specialty Food Stores

445310

Beer, Wine, & Liquor Stores

Health and Personal Care Stores

446110

Pharmacies & Drug Stores

446120

Cosmetics, Beauty Supplies, & Perfume Stores

446130

Optical Goods Stores

446190

Other Health & Personal Care Stores

Gasoline Stations

447100

Gasoline Stations (including convenience stores with gas)

Clothing and Clothing Accessories Stores

448110

Men’s Clothing Stores

448120

Women’s Clothing Stores

448130

Children’s & Infants’ Clothing Stores

448140

Family Clothing Stores

448150

Clothing Accessories Stores

448190

Other Clothing Stores

448210

Shoe Stores

448310

Jewelry Stores

448320

Luggage & Leather Goods Stores

Sporting Goods, Hobby, Book, and Music Stores

451110

Sporting Goods Stores

451120

Hobby, Toy, & Game Stores

451130

Sewing, Needlework, & Piece Goods Stores

451140

Musical Instrument & Supplies Stores

451211

Book Stores

451212

News Dealers & Newsstands

General Merchandise Stores

452200

Department Stores

452300

General Merchandise Stores, incl. Warehouse Clubs and Supercenters

Miscellaneous Store Retailers

453110

Florists

453210

Office Supplies & Stationery Stores

453220

Gift, Novelty, & Souvenir Stores

453310

Used Merchandise Stores

453910

Pet & Pet Supplies Stores

453920

Art Dealers

453930

Manufactured (Mobile) Home Dealers

453990

All Other Miscellaneous Store Retailers (including tobacco, candle, & trophy shops)

Nonstore Retailers

454110

Electronic Shopping & Mail-Order Houses

454210

Vending Machine Operators

454310

Fuel Dealers (including Heating Oil and Liquefied Petroleum)

454390

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

481000

Air Transportation

482110

Rail Transportation

483000

Water Transportation

Truck Transportation

484110

General Freight Trucking, Local

484120

General Freight Trucking, Long-distance

484200

Specialized Freight Trucking

Transit and Ground Passenger Transportation

485110

Urban Transit Systems

485210

Interurban & Rural Bus Transportation

485310

Taxi Service

485320

Limousine Service

485410

School & Employee Bus Transportation

485510

Charter Bus Industry

485990

Other Transit & Ground Passenger Transportation

Pipeline Transportation

486000

Pipeline Transportation

Scenic & Sightseeing Transportation

487000

Scenic & Sightseeing Transportation

Support Activities for Transportation

488100

Support Activities for Air Transportation

488210

Support Activities for Rail Transportation

488300

Support Activities for Water Transportation

488410

Motor Vehicle Towing

488490

Other Support Activities for Road Transportation

488510

Freight Transportation Arrangement

488990

Other Support Activities for Transportation

Couriers and Messengers

492110

Couriers

492210

Local Messengers & Local Delivery

Warehousing and Storage

493100

Warehousing & Storage (except lessors of miniwarehouses & self- storage units)

Information

Publishing Industries (except Internet)

511110

Newspaper Publishers

511120

Periodical Publishers

511130

Book Publishers

511140

Directory & Mailing List Publishers

511190

Other Publishers

511210

Software Publishers

Motion Picture and Sound Recording Industries

512100

Motion Picture & Video Industries (except video rental)

512200

Sound Recording Industries

Broadcasting (except Internet)

515100

Radio & Television Broadcasting

515210

Cable & Other Subscription Programming

Telecommunications

517000

Telecommunications (including paging, cellular, satellite, cable & other program distribution, resellers, & other telecommunications & internet service providers)

Data Processing Services

518210

Data Processing, Hosting, & Related Services

Other Information Services

519100

Other Information Services (including news syndicates, libraries, internet publishing & broadcasting)

Finance and Insurance

Depository Credit Intermediation

522110

Commercial Banking

522120

Savings Institutions

522130

Credit Unions

522190

Other Depository Credit Intermediation

Nondepository Credit Intermediation

522210

Credit Card Issuing

522220

Sales Financing

522291

Consumer Lending

522292

Real Estate Credit (including mortgage bankers & originators)

522293

International Trade Financing

522294

Secondary Market Financing

522298

All Other Nondepository Credit Intermediation

Activities Related to Credit Intermediation

522300

Activities Related to Credit Intermediation (including loan brokers, check clearing, & money transmitting)

Securities, Commodity Contracts, and Other Financial Investments and Related Activities

523110

Investment Banking & Securities Dealing

523120

Securities Brokerage

523130

Commodity Contracts Dealing

523140

Commodity Contracts Brokerage

523210

Securities & Commodity Exchanges

523900

Other Financial Investment Activities (including portfolio management & investment advice)

Insurance Carriers and Related Activities

524140

Direct Life, Health, & Medical Insurance Carriers

524150

Direct Insurance (except Life, Health, & Medical) Carriers

524210

Insurance Agencies & Brokerages

524290

Other Insurance Related Activities (including third-party administration of insurance and pension funds)

Funds, Trusts, and Other Financial Vehicles

525100

Insurance & Employee Benefit Funds

525910

Open-End Investment Funds (Form 1120-RIC)

525920

Trusts, Estates, & Agency Accounts

525990

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

Real Estate

531110

Lessors of Residential Buildings & Dwellings (including equity REITs)

531120

Lessors of Nonresidential Buildings (except Miniwarehouses) (including equity REITs)

531130

Lessors of Miniwarehouses & Self-Storage Units (including equity REITs)

531190

Lessors of Other Real Estate Property (including equity REITs)

531210

Offices of Real Estate Agents & Brokers

531310

Real Estate Property Managers

531320

Offices of Real Estate Appraisers

531390

Other Activities Related to Real Estate

Rental and Leasing Services

532100

Automotive Equipment Rental & Leasing

532210

Consumer Electronics & Appliances Rental

532281

Formal Wear & Costume Rental

532282

Video Tape & Disc Rental

532283

Home Health Equipment Rental

532284

Recreational Goods Rental

532289

All Other Consumer Goods Rental

532310

General Rental Centers

532400

Commercial & Industrial Machinery & Equipment Rental & Leasing

Lessors of Nonfinancial Intangible Assets (except copyrighted works)

533110

Lessors of Nonfinancial Intangible Assets (except copyrighted works)

Professional, Scientific, and Technical Services

Legal Services

541110

Offices of Lawyers

541190

Other Legal Services

Accounting, Tax Preparation, Bookkeeping, and Payroll Services

541211

Offices of Certified Public Accountants

541213

Tax Preparation Services

541214

Payroll Services

541219

Other Accounting Services

Architectural, Engineering, and Related Services

541310

Architectural Services

541320

Landscape Architecture Services

541330

Engineering Services

541340

Drafting Services

541350

Building Inspection Services

541360

Geophysical Surveying & Mapping Services

541370

Surveying & Mapping (except Geophysical) Services

541380

Testing Laboratories

Specialized Design Services

541400

Specialized Design Services (including interior, industrial, graphic, & fashion design)

Computer Systems Design and Related Services

541511

Custom Computer Programming Services

541512

Computer Systems Design Services

541513

Computer Facilities Management Services

541519

Other Computer Related Services

Other Professional, Scientific, and Technical Services

541600

Management, Scientific, & Technical Consulting Services

541700

Scientific Research & Development Services

541800

Advertising & Related Services

541910

Marketing Research & Public Opinion Polling

541920

Photographic Services

541930

Translation & Interpretation Services

541940

Veterinary Services

541990

All Other Professional, Scientific, & Technical Services

Management of Companies (Holding Companies)

551111

Offices of Bank Holding Companies

551112

Offices of Other Holding Companies

Administrative and Support and Waste Management and Remediation Services

Administrative and Support Services

561110

Office Administrative Services

561210

Facilities Support Services

561300

Employment Services

561410

Document Preparation Services

561420

Telephone Call Centers

561430

Business Service Centers (including private mail centers & copy shops)

561440

Collection Agencies

561450

Credit Bureaus

561490

Other Business Support Services (including repossession services, court reporting, & stenotype services)

561500

Travel Arrangement & Reservation Services

561600

Investigation & Security Services

561710

Exterminating & Pest Control Services

561720

Janitorial Services

561730

Landscaping Services

561740

Carpet & Upholstery Cleaning Services

561790

Other Services to Buildings & Dwellings

561900

Other Support Services (including packaging & labeling services, & convention & trade show organizers)

Waste Management and Remediation Services

562000

Waste Management & Remediation Services

Educational Services

611000

Educational Services (including schools, colleges, & universities)

Health Care and Social Assistance

Offices of Physicians and Dentists

621111

Offices of Physicians (except mental health specialists)

621112

Offices of Physicians, Mental Health Specialists

621210

Offices of Dentists

Offices of Other Health Practitioners

621310

Offices of Chiropractors

621320

Offices of Optometrists

621330

Offices of Mental Health Practitioners (except Physicians)

621340

Offices of Physical, Occupational & Speech Therapists, & Audiologists

621391

Offices of Podiatrists

621399

Offices of All Other Miscellaneous Health Practitioners

Outpatient Care Centers

621410

Family Planning Centers

621420

Outpatient Mental Health & Substance Abuse Centers

621491

HMO Medical Centers

621492

Kidney Dialysis Centers

621493

Freestanding Ambulatory Surgical & Emergency Centers

621498

All Other Outpatient Care Centers

Medical and Diagnostic Laboratories

621510

Medical & Diagnostic Laboratories

Home Health Care Services

621610

Home Health Care Services

Other Ambulatory Health Care Services

621900

Other Ambulatory Health Care Services (including ambulance services & blood & organ banks)

Hospitals

622000

Hospitals

Nursing and Residential Care Facilities

623000

Nursing & Residential Care Facilities

Social Assistance

624100

Individual & Family Services

624200

Community Food & Housing, & Emergency & Other Relief Services

624310

Vocational Rehabilitation Services

624410

Child Day Care Services

Arts, Entertainment, and Recreation

Performing Arts, Spectator Sports, and Related Industries

711100

Performing Arts Companies

711210

Spectator Sports (including sports clubs & racetracks)

711300

Promoters of Performing Arts, Sports, & Similar Events

711410

Agents & Managers for Artists, Athletes, Entertainers, & Other Public Figures

711510

Independent Artists, Writers, & Performers

Museums, Historical Sites, and Similar Institutions

712100

Museums, Historical Sites, & Similar Institutions

Amusement, Gambling, and Recreation Industries

713100

Amusement Parks & Arcades

713200

Gambling Industries

713900

Other Amusement & Recreation Industries (including golf courses, skiing facilities, marinas, fitness centers, & bowling centers)

Accommodation and Food Services

Accommodation

721110

Hotels (except Casino Hotels) & Motels

721120

Casino Hotels

721191

Bed & Breakfast Inns

721199

All Other Traveler Accommodation

721210

RV (Recreational Vehicle) Parks & Recreational Camps

721310

Rooming & Boarding Houses Dormitories, & Workers’ Camps

Food Services and Drinking Places

722300

Special Food Services (including food service contractors & caterers)

722410

Drinking Places (Alcoholic Beverages)

722511

Full Service Restaurants

722513

Limited Service Restaurants

722514

Cafeterias and Buffets

722515

Snack and Non-alcoholic Beverage Bars

Other Services

Repair and Maintenance

811110

Automotive Mechanical & Electrical Repair & Maintenance

811120

Automotive Body, Paint, Interior, & Glass Repair

811190

Other Automotive Repair & Maintenance (including oil change & lubrication shops & car washes)

811210

Electronic & Precision Equipment Repair & Maintenance

811310

Commercial & Industrial Machinery & Equipment (except Automotive & Electronic) Repair & Maintenance

811410

Home & Garden Equipment & Appliance Repair & Maintenance

811420

Reupholstery & Furniture Repair

811430

Footwear & Leather Goods Repair

811490

Other Personal & Household Goods Repair & Maintenance

Personal and Laundry Services

812111

Barber Shops

812112

Beauty Salons

812113

Nail Salons

812190

Other Personal Care Services (including diet & weight reducing centers)

812210

Funeral Homes & Funeral Services

812220

Cemeteries & Crematories

812310

Coin-Operated Laundries & Drycleaners

812320

Drycleaning & Laundry Services (except Coin-Operated)

812330

Linen & Uniform Supply

812910

Pet Care (except Veterinary) Services

812920

Photofinishing

812930

Parking Lots & Garages

812990

All Other Personal Services

Religious, Grantmaking, Civic, Professional, and Similar Organizations

813000

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

By Internet

You can download, view, and print California tax forms and publications at ftb.ca.gov/forms.

Access other state agencies’ websites at ca.gov.

By phone

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.

In person

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.

By mail

Write to:

Mail

Tax Forms Request Unit
Franchise Tax Board
PO Box 307
Rancho Cordova, CA
95741-0307

Letters

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:

Mail

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.

Website

www.ftb.ca.gov

Phone

800-852-5711 from within the United States
916-845-6500 from outside the United States
California Relay Service
711 or 800-735-2929 for persons with hearing or speaking limitations

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

www.ftb.ca.gov

Teléfono

800-852-5711 dentro de los Estados Unidos
916-845-6500 fuera de los Estados Unidos
Servicio de Retransmisión de California
711 o 800-735-2929 para personas con limitaciones auditivas o del habla

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:

Mail

Department of Housing &
Community Development
Division of Financial Assistance
Enterprise Zone Programs
2020 West El Camino Avenue Suite 650
Sacramento, CA 95833

Mailing address:

Mail

PO Box 952054
Sacramento, CA 94252-2054

Website

hcd.ca.gov

Phone

916-274-0575

Fax

916-263-2764

or for tax-specific information contact:

Website

www.ftb.ca.gov

Phone

916-845-3464