Deadline Approaching for CA Competes Tax Credit

Deadline Approaching for California Competes Tax Credit 

What it is and why you should act fast

The high cost of doing business in California can be challenging. Lucky for California businesses, a tax incentive is available to businesses looking to come, stay or grow their operations within the state. For small and medium-sized businesses with recent headcount increases or property investments, or those who have planned investments over the next five years, the California Competes Tax Credit will be particularly enticing.

Overview

The California Competes Tax Credit (CCTC) is open to businesses of all sizes and industries and aims to offset state income tax. Applicants of the grant may request up to 20% of the $230 million the CCTC Committee has to award to California businesses. 25% of that $230 million is reserved for small businesses.

The first grant application period was July 24, 2017 – August 21, 2017. The next, and notably largest, grant period is quickly approaching in January, followed by another period in March.

January 2, 2018 – January 22, 2018: $100 million available

March 5, 2018 – March 26, 2018: $55.4 million available

The amount of the credit is negotiated by the Governor’s Office of Business and Economic Development (GO-Biz) and is ultimately approved by a committee consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, and one appointee each by the Speaker of the Assembly and Senate Committee on Rules.

Application details

The application process includes an in-depth analysis of your business operations, therefore it’s important to begin examining the information as early as possible. Expect the application process to take 3-6 weeks as it will require business owners’ input (and likely consulting from outsourced providers).

The credit awards are based on 11 factors, including:

    • Number of jobs created or retained
    • Compensation paid to employees
    • Amount of investment
    • Duration of proposed project and commitment to remain in this state
    • Extent of unemployment or poverty in business area
    • Extent the benefit to the state exceeds the amount of the tax credit
    • Incentives available in other states
    • Opportunity for future growth and expansion
    • Other incentives available in California
    • Overall economic impact
    • Strategic importance to the state, region, or locality

Once a business applies for the credit, GO-Biz will calculate and compare the cost-benefit ratio of each applicant, followed by a more in-depth analysis of the top applicants. From there, selected applicants will begin negotiating terms and conditions with GO-Biz — which ultimately awards and allocates the credit to the businesses.

How SSF can help

If you are interested in applying for CCTC, SSF can help guide you through the entire process. From pre-application planning and analysis through application submission, our team can help you make the most of this significant opportunity.

Additionally, there are several State sponsored workshops available to learn more about the application process and requirements. If you are interested in attending any of these workshops, SSF can help you register for the event. We are also happy to answer any questions you may have before and after the presentation, or attend the workshop with you.

December 13 – Concord, CA

December 13 – San Francisco, CA

December 14 – Salinas, CA

December 18 – San Mateo, CA

Interested in attending a workshop or discussing your application with us? Click here to select your workshop and we will register you.

Click here for a full list of cities and workshop dates.

For those who are unable to attend any of the workshops, there are also webinars available. Click here for more information.

Want to learn more about the California Competes Tax Credit? Contact us at 925.271.8700 or at info@ssfllp.com.

By | 2017-12-13T11:45:47+00:00 December 1st, 2017|Categories: Blog, Tax|Tags: , |0 Comments

Leave A Comment