The California Competes Tax Credit is an income tax credit program available to businesses expanding or relocating to California. Created in 2014 by the California legislature and overseen by Governor Jerry Brown’s Office of Business and Economic Development, the California Competes Tax Credit is divided into three separate rounds for each fiscal year. In FY 15-17, more than 270 companies were awarded more than $204 million in tax credits.
In all three rounds this year combined, 30 San Diego companies earned more than $20 million in income tax credits – claiming 10 percent of the total tax credits awarded in FY 16-17. In return, these San Diego companies have committed to $242 million of investments and 1,408 new jobs totaling more than $340 million in wages by 2021.
In the third and final round that took place this June, San Diego companies were awarded about $3 million in tax credits, making up five percent of the total $59 million awarded across the state. For each round of the program, businesses are categorized as either small or large, with credit amounts distributed to both groups. During the June round, San Diego small businesses made up 1.79 percent of the total tax credits – totaling $1.05 million – while large companies made up 3.73 percent of the total, or $1.9 million.
The Cal Competes program will open its first round of the FY 17-18 on July 24, in which $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 leverage the program as tool to reduce your tax liability. The EDC team stands by to assist with applications, as we have with many other San Diego companies.
Attend an upcoming workshop in Vista or Oceanside to learn how your business can apply for a tax credit, or contact Jesse Gipe for more information.