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The California Competes Tax Credit is a program created by the California legislature and managed by the Governor’s Office of Business and Economic Development (GO-Biz). The tax credits are awarded by the state to companies who are looking to move to, or stay and grow in, California. In the 2015-16 round, the state awarded more than $150 million in tax credits to 259 companies who pledged to create almost 20,986 jobs over the next five years.
Within each year of the Cal Competes program credits are awarded over three separate rounds. In the last round of the 2015-16 fiscal year of the program, which closed in June, San Diego companies captured $7 million in tax credits – the largest amount of tax credits in the state and 16 percent of the total allotted credits. San Diego received more than $1 million more in tax credits than the second-place region, El Centro – San Diego’s neighbor to the east.
Throughout the entire 2015-16 program (encompassing three rounds), the California Competes program granted 38 San Diego companies more than $19.7 million in tax credits – 13 percent of the total tax credits awarded and the second highest of all regions in the state. With this, local companies committed to the creation of 2,070 jobs over the next five years, which will result in more than $369 million in wages. Those same companies will be investing $214 million in a variety capital projects over that same period.
The program divides companies into either the small or large business category where companies compete separately for a tax credit. In San Diego, large businesses received 7.6 percent – or $11.6 million – of all tax credits for the 2015-16 year. The region’s small businesses were awarded $8 million in tax credits, or 5.32 percent of the year’s pool.
The Cal Competes program will open its first round of the 2016-17 fiscal year on Monday, July 25 where $75 million of this year’s $250 million is up for grabs. If your business is considering relocating to, or expanding in, California, we encourage you to look at the program as tool to reduce your tax liability. Our team stands by to assist with applications, as we have with many other San Diego companies including Hunter Industries, Taylor Guitars and more.
The California Competes Tax Credit is an income tax credit available to businesses that want to locate in or expand in California. Since its launch in 2014 as part of Governor Jerry Brown’s economic development initiative, the California Competes Tax Credit will award close to $380 million in credits to California companies.
On April 14, 103 companies were awarded more than $68 million in tax credits, creating close to 9,370 jobs over the next five years. In total, these companies will invest more than $1.3 billion over the next five years, aiding the state’s long term growth.
San Diego boded especially well in this round. Eighteen San Diego companies are receiving more than $11.2 million in tax credits, ranking second among all metropolitan regions in the state. San Diego also ranked second in the amount of jobs created among all metros, with more than 1,330 jobs. Some of the companies that will be will awarded the credits include: Hunter Industries and Sentek Global, and many more. These funds will help the 18 San Diego companies invest more than $139.7 million into the community and pay more than $252.8 million in wages over the next five years.