SAN DIEGO—There are a number of federal and state tax-incentive programs that are often overlooked by both small and large businesses in California, but they can provide tenants significant savings, Lee & Associates' SVP Kelly Nicholls tells GlobeSt.com. It behooves owners and property managers to learn about these programs in order to help their tenants reap tax benefits they may not have even known existed.

These tax benefits are especially relevant now that rental rates have risen and look to continue rising in the near term. "As America's current economic anatomy thrives, boasting record strength across the board, it is not surprising that 2015's Q3 reports show industrial-sector lease rates and sale values trending upward while vacancy rates plummet in the same sector," says Nicholls. "Currently, industrial-sector vacancy is trending at a rate of 5.5% in San Diego County. The current condition of rising real estate values is welcomed by property owners, but is less than welcomed by occupiers of space."

California's expensive real estate costs are often endearingly referred to as the "sunshine" tax, Nicholls adds. "While we watch the rest of country plunge into winter, we tend to accept, without much complaint, the real estate premium we all pay for one of the nation's largest metro markets. Companies who elect to stay in California—and more specifically, in San Diego County—may want to investigate a series of alternative cost-saving measures to help off-set the 'sunshine' taxes."

Finding these hidden gems and/or navigating through the incentives procurement process can be challenging, Nicholls says, but, with the guidance of specialists, may yield large cost savings for businesses that put forth the effort. "Finding incentives to leverage may be the best present a business can receive during this holiday season. Application deadlines exist, so start your investigation now if you're interested in California programs in 2016."

Here, a list of some of the exemptions Nicholls recommends both small and large businesses consider:

• (Partial) Sales & Use Tax Exemption provides a partial exemption of sales and use tax for companies primarily engaged in manufacturing, biotech and R&D activities. The partial exemption applies only to the state sales and use tax-rate portion.
• (Full) Sales & Use Tax Exclusion provides a sales tax exclusion from both state and local sales-tax collection on equipment purchases for qualifying businesses that conduct qualifying activities.
• California Competes Tax Credit is focused on helping businesses grow and stay in California. Companies are exempted from paying state income taxes in the amount awarded. Since the inception of the program in June 2014, GO-Biz has allocated approximately $129 million to 178 companies that are projected to create more than 24,100 jobs and make more than $6 billion in investments.
• Industrial Development Bond (IDB) is a financing incentive option for acquisitions of manufacturing facilities and equipment; giving them access to private capital markets at tax-exempt rates. The benefits of IBD include long-term financing, interest rates below comparable commercial alternatives, assumable and no prepayment penalty in some cases.

For more tax incentives, exceptions, and credits, Nicholls recommends clicking on California Business Incentives for a full list.