On Tuesday, January 2, 2018, The California Governor’s Office of Economic Development (GO-Biz) began taking applications
California Incentives Update: 
Deadline Nearing to Apply for Share of $100 Million of New CalCompetes Tax Credits​

california-golden-gate-bridge-th.jpg

On Tuesday, January 2, 2018, The California Governor’s Office of Economic Development (GO-Biz) began taking applications for the second round of the FY 2017-2018 California Competes Tax Credit program (“Cal Competes”). The application window is just three weeks, with the deadline to apply on Monday, January 22, 2018. The California Competes Tax Credit is an income tax credit available to businesses who want to come, stay, or grow in California. 

california.png

The CalCompetes program expects to award a total of $230 million of discretionary, non-refundable, corporate income tax credits during the current fiscal year. The tax credits are awarded in three tranches, each of which entails separate applications and approvals. Of this total, $75 million already was awarded on November 16, and another $100 million will be made available during this current round. Companies missing the January 22nd deadline will have one last opportunity to apply for CalCompetes benefits during a final round for which the application window is March 5 – March 26th. 
However, those applicants for the March round will be vying for a significantly smaller pool of tax credits – $55.4 million, plus the carryover of any un-awarded credits from prior rounds.

Regardless of when they apply, all aspiring to obtain CalCompetes tax credits will encounter a 2-phased, competitive application process. During Phase 1, with a few exceptions, only those applications with the most advantageous cost-benefit ratio are likely to be accepted for Phase 2, where they will be subject to additional vetting. This cost-benefit ratio is calculated by dividing (a) the amount of credit requested by (b) the sum of aggregate compensation for employees (new or retained) plus the total capital expenditures being created by a project over a 5-year period. As such, applicants are advised to carefully balance their jobs and investment commitments against their tax credit request to achieve a competitive cost-benefit ratio and maximize prospects of obtaining a tax credit award.
 
The future of the CalCompetes program is uncertain. The non-partisan California Legislative Analyst’s Office has recommended terminating the program after this fiscal year in favor of broad-based business tax relief, and there are yet no signs that any of Governor Jerry Brown’s potential successors will support the program when they take office early next year.

For more information about CalCompetes and other business incentives programs in California please call Andy Shapiro at 925-239-1711 or send an email to ashapiro@BLSstrategies.com. For real-time updates on all state incentive programs please visit the BLS & Co website at www.BLSstrategies.com.
 
Best regards,

Andrew Shapiro
Managing Director 
Biggins Lacy Shapiro & Co.
1255 Treat Boulevard, Suite 300
Walnut Creek, CA 94597 
Direct: 925-239-1711
Mobile: 609-651-7765
ashapiro@BLSstrategies.com
www.blsstrategies.com