What’s new with the California Competes Tax Credit program? As we explained several months ago, the program had three different application periods for the 2014-15 fiscal year:
- September 29, 2014, through October 27, 2014 ($45 million available)
- January 5, 2015, through February 2, 2015 ($75 million available)
- March 09, 2015, through April 6, 2015 ($31.1 million available plus any unallocated amounts from the previous application periods)
Now that all three application periods have passed and we wait for the State’s office of economic development, Go-Biz, to release data for the upcoming fiscal year, we thought this would be a good time to look at the program and provide a quick update. As we previously explained, “The program was implemented to offer California-based businesses an income tax credit if they’re looking to expand, or for non-California organizations looking to relocate to the Golden State.”
Curious who ended up taking advantage of and benefiting from the program? Here are some interesting numbers:
- On January 15, $31 million was awarded to 94 taxpayers as tax credits.
- For the first application period, the credit awards ranged from $20,000 to more than $3 million.
- For the second application period, over 250 applicants requested $289 million of credits. However, only $75 million was authorized to be awarded during this period. Every period has had many more applications than companies awarded the tax credit.
What about the third application period? The publicly posted April 16 California Competes Tax Credit Program Committee Meeting agenda shares the details:
- The total recommended tax credits for 67 larger companies totaled more than $53 million.
- The total recommended tax credits for 27 small businesses totaled more than $14 million.
When we first reported on this credit, we said that the “jury was still out” on whether it would prove to be beneficial. While the program has helped many businesses by providing tax credits, we think it could be better funded and also be more transparent. There are many companies expanding within the state and it’s still quite difficult to get a piece of this pie. Companies have to be very thoughtful in how they complete the application and in how much money they request in order to be successful in obtaining funds. We can help with that!
Want to know how you can take advantage of the California Competes Tax Credit program for the 2015-16 year and get a share of the estimated $200 Million that will be available beginning in July? Contact us to learn more and stay tuned for additional details which will be coming soon!
Miles Consulting Group, Inc. is a professional service firm in San Jose, California specializing in multi-state tax solutions. Our firm addresses state and local tax issues for our clients, including general state tax consulting, nexus reviews, tax credit and tax incentive maximization, income tax and sales/use tax planning and other special projects, including the new California Competes Tax Credit. To learn more, contact us today at www.MilesConsultingGroup.com.
