09.17.14 |
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First Round California Competes Tax Credits of $45 Million and Application Window Announced

CaliforniaEarlier in the year, we talked about the California Competes Tax Credit, which is designed to benefit companies that are considering an expansion in, or relocation to, the State of California. Now, the first California Competes opportunity for fiscal years 2014 and 2015 is drawing near.

On September 10, 2014, the State of California announced that it would be accepting applications for the California Competes Tax Credit during the timeframe of September 29, 2014 through October 27, 2014. The State has allocated $151.1 million in total, with $45 million available in this round. Note that no one application is eligible to receive more than 20% of the total program allocation.

With the State readying to accept applications in a matter of days, it is important to start the process now!

The basis of eligibility is on the creation of new employment positions and/or retaining incumbent positions and incurring capital investment in California. When evaluating a project, the California competes tax credit committee will consider a variety of factors, including, but limited to the following:

  • U.S. Census Unemployment & Poverty Rates for potential project locations
  • Demonstrate that receipt of the tax credit is a material factor in decision to expand or relocate
  • Availability and value of economic incentives in competing states
  • Number of jobs to be created and/or retained
  • Employee wages and total compensation
  • Amount of capital investment
  • Potential for company’s long-term growth in California

Companies that are about to undertake the following activities/actions in the State of California may be in position to take advantage of this opportunity:

  • Creating net new jobs
  • Facility consolidations
  • Job retention efforts
  • Purchase of machinery and equipment
  • Facility construction
  • Facility expansion or renovations

This is the first of three rounds for the program. The second round, to take place in January/February 2015, will make another $75 million available. The third and final round, to take place in March/April 2015 timeframe, will bring an additional $31.1 million to the program1.







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