$180 Million in Tax Credits Available to Businesses Through the California Competes Tax Credit
By Gil Gonzalez
Is your organization or business moving or expanding to California? If so, you can considerably benefit from the CCTC (California Competes Tax Credit). You should know that the CCTC is an income tax credit program in California that incentivizes businesses and companies to grow in California.
What is California Competes Tax Credit?
We can define the California Competes Tax Credit (CCTC) as an income tax credit that’s available to companies, businesses, and business organizations that would like to locate to California or businesses that want to stay and expand in California while creating quality, full-time jobs in the state.
Did you know that the CCTC was approved by Governor Jerry Brown in 2013? It is worth noting that the main purpose of the CCTC is to attract, as well as retain, employers in various California industries that have high economic multipliers and that offer their employees good benefits and wages.
Note that Go-Biz will negotiate the tax credit agreements. The agreements will be approved by a statutorily created by CCTC Committee. Keep in mind that the committee will comprise the State Treasurer, the Director of Go-Biz, the Director of the Department of Finance, as well as one Appointee by the Speaker of the Assembly and Senate Committee on Rules.
As a business owner, you will be glad to know that any business can easily apply for the CCTC. This is because this tax credit is available statewide to all industries. Note that small businesses of any size are eligible to apply for the CCTC.
California taxpayers and businesses that plan to stay and expand their business in the state through capital investment and job creation can apply for this tax credit which is awarded through a competitive process.
However, it is worth noting that if your business would like to qualify for a portion of this tax credit allocation, you have to show an expansion plan to create jobs in the state in the next 5 years. Did you know that Go-Biz has dedicated about $180 million per the fiscal year 2018-2019 through 2022-2023?
GO-Biz has to consider the degree to which the tax credit will impact the business’s willingness, ability, or both, to create new and full-time jobs in California that may not otherwise be created in California by other taxpayers.
Why Apply for California Competes Tax Credit
Applying for CCTC means that your business can cut its tax bill. In fact, keep in mind that small business tax credits, such as CCTC, are dollar for dollar. This means that every dollar of tax credit can cut your tax bill by a full dollar.
This is huge for your small business because it enables you to recover some of the expenses and costs of running a business in California, while keeping much-needed working capital that will allow your business to grow and prosper.
As a result, the CCTC is an important tool for organizations and businesses to expand and improve the local economy while increasing cash flow during uncertain and turbulent times.
Gil Gonzales' new book on Government Incentives is coming soon, with all the details on Tax Credits, Grants, Cash Reimbursements & Financing! It will be the ultimate "insider's guide to government funding for your small business." Visit www.gilgonzales.com to get notified when the book is available!
Gil Gonzales is a Senior Economic Development and Public Affairs professional with a 15-year track record serving in various strategic capacities within state and local government. At The Grady Firm, Mr. Gonzales helps clients with site selection, fast-tracking permits, incentive implementation, and deal negotiation. His unique knowledge of government offerings and relationships with government officials have helped him negotiate and implement federal, state, and local tax incentives and abatements that save clients substantial capital to use towards their new projects.
If you have any questions about California Competes Tax Credit, we encourage you to contact our office at firstname.lastname@example.org, or call us at (949) 798-6298.
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This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney.