June 11, 2018 | CIG Tax Insights
Similar to a professional athlete working on a new contract, the California Competes Tax Credit (CCTC) administered by the Governor’s Office of Business and Economic Development (GO-Biz) is on the cusp of inking a five year, $900M extension.
Earlier today, SB-855 (Taxation) received what should likely be its final amendment language for the extension to be included in the Legislature’s 2018-19 Budget. The Budget is expected to be signed into law by the Governor later this week.
Although it is unfortunate that the small business category was removed, the state did not leave them behind as they were able to shift the $20M reduction to other small businesses specific programs. For larger businesses, the reduction in total annual CCTC funding should have minimal impact as small businesses no longer receive 25 percent of the available funds.
Having awarded nearly $700M to more than 900 businesses since the program’s inception in 2014, this extension is evidence that California would like to continue to incentivize businesses to come to and remain in the Golden State.
As a firm with experience in representing more than 40 businesses to over $35M in CCTC awards, we at CALincentives believe that some of the subtle changes included in this extension will have an impact on how businesses will need to evaluate this tax incentive. Please reach out to us if you’re interested in learning about how California can support your business through a California Competes Tax Credit award.