Country / Language

California Competes Tax Credit Applications Open through October 27


10/10/14

Synopsis
 
The California Governor’s Office of Business and Economic Development (“GO-Biz”) will be accepting applications for the California Competes Tax Credit, effective September 29 through October 27, 2014.
 
Issue
 
The California Competes Tax Credit (“Tax Credit”) is an income tax credit available to businesses that want to relocate to California or stay and grow in California. The credits are intended to attract and retain high-value employers and are based on a number of factors, including, the number of jobs created or maintained in California, compensation paid relating to such jobs, the industry, the amount of the total investment by the taxpayer, and the location of the investment. Taxpayers looking to relocate to or expand or retain jobs in California should closely review the potential benefits of participating in the Tax Credit program. Taxpayers looking to obtain a Tax Credit are generally required to apply online for such credits. The available California Competes Tax Credit for fiscal year 2014/15 is $151.1 million.
 
Application Periods
On September 10, 2014, Kish Rajan, the Director of GO-Biz released a memorandum notifying taxpayers that for fiscal year 2014/15, applications for the California Competes Tax Credit will be accepted during the following periods:

  1. September 29, 2014 through October 27, 2014 ($45 million available)
  2. January 5, 2015 through February 2, 2015 ($75 million available)
  3. March 9, 2015 through April 6, 2015 ($31.1 million available plus any remaining unallocated amount)
     

What Does CohnReznick Think?
This tax credit program is a bit unique in that it requires potential applicants to compete with each other for a limited pool of funds. GO-Biz grades applicants and awards credits based on a number of different criteria so painting the appropriate picture in the application is essential. In addition to this credit, California offers potential sales tax exemptions and hiring credits – so be sure to understand all potential benefits when comparing jurisdictions.

Contact

For more information please contact Bill Andreozzi, Partner, at 818-205-2620 or Matthew Nick, Senior Manager, State and Local Tax Practice, at 860-271-7933.

To learn more about CohnReznick’s State and Local Tax Practice, please visit our webpage.


Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues.  It is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, CohnReznick, LLP would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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