The CA Competes Tax Credit program is provided by the State of California to award tax credits to businesses that plan to hire workers or invest in the state and any company can apply. In the most recent round of applications ALTIUS was among 87 companies to be awarded CA Competes Tax Credits and we can help your business secure these credits as well.
While technically a competitive credit program, there is actually little competition for small businesses. In fact, in the recent application period, every small business that applied for the credit was automatically moved on to the second phase of the process. That relative lack of competition means opportunity for California small businesses.
Windows For Application
Tax credits totaling $200 million are available for the state’s 2017-2018 fiscal year. Following are the open application periods for the upcoming fiscal year:
July 24, 2017, through Aug. 21, 2017
Jan. 2, 2018, through Jan. 22, 2018
March 5, 2018, through March 26, 2018
The value of the credit awarded is determined by a number of different factors, including the number of jobs that will be created or retained in the state, the amount of competition for the jobs in question, the amount of total investment in the state and the unemployment rate in the area where the business plans to locate.
During the first phase of the evaluation process, the businesses vying for the tax credits are ranked on a number of important factors.
Some of those factors include:
The total number of jobs that will be created or retained in the state of California
The wages and benefits associated with those new or retained positions
The amount of investment the company is planning to make in the state
The current rates of unemployment and poverty in the area where the business is located
Other available tax incentives, including incentives at the state and local level
The duration of the proposed investment project
The overall economic impact the project is expected to have on the state
The strategic importance of the business to the state in total, as well as the region or locality in particular
Opportunities for future growth by the company in question
The extent by which the anticipated benefit to the state of California exceeds the benefit of the tax credit
Businesses, that are successful in Phase 1 will move on to Phase 2 of the tax credit awarding process. During Phase 2, an evaluation is conducted by state representatives to assess the overall value of the proposals and award the tax credits based on their established criteria.
In Phase 2 of the program, a number of important factors are considered, including:
The local unemployment rate
Competitive incentives in other states or jurisdictions
The economic impact on the state of California and its residents
The outlook for business and industry
Businesses who are awarded the tax credits can use those credits to offset taxes in the current year, and any award beyond the current income tax due can be carried forward and applied to taxes due for the following five years.
ALTIUS is proud to be to be a recipient of California Competes Tax Credits in previous application windows and can help your company be awarded credits as well.