Five California Business Incentives You Need to Know Now!
California has so much to offer – from the beach to the mountains, deserts to farm fields, and a vast array of industries, there’s something for everyone to love. And in the area of business incentives, there are so many opportunities to take advantage of – here are just a few to explore!
This income tax credit is available to businesses who come to, stay, or grow in California, and 25% of the total amount granted each year is reserved for small businesses! It’s 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 next application period is July 24, 2017 through August 21, 2017, with $75 million available, followed by the next application period from January 2, 2018 through January 22, 2018 with $100 million available. Applications will be accepted online at California Competes Tax Credit. Check out the California Competes Tax Credit Application Workshop for more details and assistance.
“The State of California Employment Training Panel is the state’s premier program supporting job creation and retention through training. The panel reimburses employers for the costs of training existing workers, funds training for unemployed workers to re-enter the workforce and helps to ensure California businesses have the skilled workers they need to remain competitive.”1 On June 23, 2017, the ETP awarded 62 contracts worth more than $17,000,000 to train over 18 thousand workers.
The next application for funding deadlines are July 26, 2017 for the September 22, 2017 panel meeting and August 30, 2017 for the October 27, 2017 panel meeting.
The Small Business Certification aims to level the playing field. Certified small businesses (SBs) and micro businesses (MBs) are entitled to a variety of benefits in California, including a five percent bid preference on applicable State solicitations, eligibility for the State’s Small Business Participation Program which sets a goal for the use of small businesses in at least 25% of the State’s overall annual contract dollars, and higher interest penalties for late payment of undisputed invoices under the Prompt Payment Act – just to name a few! Check out the certification requirements and explore the benefits here.
Among California’s industry specific incentives is the Film & Tax TV Credit Program 2.0. This five year $1.55 billion program has a sunset date of June 30, 2020. Each fiscal year (July 1 to June 30), the $330 million funding is categorized in TV Projects, Relocating TV, Indie Features and Non-Indie Features, with Transferable and Non-transferable tax credits of 20% to 25%, and a 5% Credit Uplift depending on the specific project details. Application dates and requirements vary by category, so check out the specific deadlines and application information. Or contact the SCVEDC Business Services team
This can be a significant benefit to manufacturing companies, so don’t let the complexity scare you away – ask for help from the California State Board of Equalization! If your company is engaged in certain, qualified types of business and purchases qualified equipment, it may be eligible for a partial exemption from the California Sales and Use Tax. The current exemption rate is 3.9375% - on a $100,000 qualified equipment purchase, that translates to a savings of $3,937.50. And for a $1,000,000 qualified equipment purchase, a savings of $39,375.00! That’s worth taking some time to explore your eligibility.
These are just a few more reasons to consider relocating or expanding in California, and the Santa Clarita Valley just north of Los Angeles offers even more when it comes to being business-friendly: room to grow and state-of-the-art facilities, cost-advantages, key industry clusters and big names, a supportive network of business and workforce development organizations like SCVEDC and College of the Canyons, and a great lifestyle for employees.
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.