The California Competes Tax Credit (CCTC) is an income tax credit that is available to companies for a project associated with staying or growing in California. The tentative amount of credits allocated to Go-Biz are $30M for FY 2013-14, $150M for FY 2014-15 and $200M for each FY 2015-16 and 2017-18. Small businesses with gross receipts of less than $2M during the previous taxable year have been specifically allocated to receive 25% of the total credits available each year.
Tax credit agreements must be negotiated and approved by a newly created California Competes Tax Credit Committee. The tax credit awards under this program are for projects involving full-time jobs only (35 hours a week or more; part time jobs are not applicable) and/or investment. Of concern to the CCTC committee will be the number of positions being created or retained, the compensation paid or to be paid, amount of investment, area of California in which the project is going to take place, other incentives received by the applicant company, commitment to stay within California, and strategic importance of the project of business to California. While there is no minimum jobs that must be crated, the awards are competitive.
Applications must be submitted by April 14, 2014. The application information consists of information such as general company background information, employee data, annual gross receipts in last taxable year, corporate structure, the amount of CCTC requested and the period for which the CCTC will be taken, and information about the proposed project, including whether it is for business growth, retention, or relocation, effects on full-time employment (e.g., any loss of full-time employment associated with the project and reasons or number of full-time employees to be hired or employed), permits required, type and source of project financing, working capital available for the project, and expected costs. Awards are limited by applicant to more than 20% of the aggregate amount of tax credit available each fiscal year.
Please not that recipients of an award under CCTC will be posted on the California Go-Biz website, including company name, tax credit allocation, estimated amount of investment, estimated number of employees hired or retained, and, if applicable, any tax credit recapture that may occur.
For more information, contact Walton.