California Competes Tax Credit
Did you know about the California Competes Tax Credit? It’s an income tax credit available to businesses who want to come to, stay in, or grow in California. Through a two-phase process, businesses apply and compete for this credit during three application periods each year. It’s just one of the many business services the Santa Clarita Valley Economic Development Corporation (SCVEDC) supports in the Santa Clarita Valley, another great reason to explore relocating to the SCV.
Phase I is an online application process, where businesses submit information on their 5-year growth plans including new hires and wages, projected amount of investment equipment and facilities, and their requested tax credit. A cost-benefit ratio is then calculated, and companies with the most advantageous cost-benefit ratio move on to Phase II for final negotiation.
The next application period is July 24, 2017 through August 21, 2017 with $75 million available, followed by two additional application periods; January 2, 2018 through January 22, 2018 with $100 million available, and March 5, 2018 through March 26, 2018 with $55.4 million plus any remaining unallocated amounts from the previous application periods. Applications will be accepted online at California Competes Tax Credit. Check out the California Competes Tax Credit Application Workshop for more details and assistance.
25% of the total amount each fiscal year is reserved for small businesses!
The California Competes Tax Credit awards are based on 11 factors:
This is a business service oriented credit against the income tax due to the Franchise Tax Board, which is non-refundable and includes a six tax year carry-over provision. Also, it’s tied to achieving contractual milestones (such as hiring and/or investment) and is subject to recapture provisions.
The California Competes Tax Credit agreements are negotiated by GO-Biz and approved by a statutorily created “California Competes Tax Credit Committee,” which consists 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 the Senate Committee on Rules.
By ensuring businesses in the SCV or those considering the move to the SCV have current information regarding the various resources available, the SCVEDC helps maintain and expand a vibrant business community in the SCV. It’s just one of the business services provided by the SCVEDC for businesses in the Santa Clarita Valley. Contact the SCVEDC today and learn more.
The Santa Clarita Valley Economic Development Corporation (SCVEDC) is a unique private / public partnership representing the united effort of regional industry and government leaders. The SCVEDC utilizes an integrated approach to attracting, retaining and expanding a diversity of businesses in the Santa Clarita Valley, especially those in key industry clusters, by offering competitive business services and other resources.