As a replacement of the California Enterprise Zone Program, companies can now apply for the California Competes Credit ("CC Credit").  EZ Credits can still be claimed on 2013 and amended in the four prior years, and employers can continue to claim hiring credits through 2018 on qualified employees hired before 2014.

In replacement of the EZ Program, various incentives, including the California Competes Credit Program  (“CC Credit”) has been initiated.   This program requires taxpayers to provide detailed information for evaluation and consideration for a pool of credits (discussed below).  25% of the credits will be earmarked for Small Businesses – defined as those with less than $2M of gross revenues.

Ideal businesses are as follows:

  • Planning to add headcount in California any time between 2014 through 2018 in excess of 2013 FTEs and/or
  • Planning to make capital expenditures in California any time between 2014 – 2018

About the Credit

The CC Credit is a negotiated income tax credit available to businesses that want to stay and grow or want to come to California.  Tax credit agreements will be negotiated by GO-Biz and approved by a newly created “California Competes Tax Credit Committee,” consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, one appointee from the Senate, and one appointee of the Assembly. Credits have a carry-forward provision of 6 years.

Amount of Credits Available

California has a fiscal year that runs from July 1 – June 30.  The amount of CC credits by fiscal year budgeted by the Governor  under the Go-Biz program are as follows:

  • Fiscal Year 2013/2014 – $30M
  • Fiscal Year 2014/2015 – $150M
  • Fiscal Year 2015/2016 – $200M
  • Fiscal Year 2016/2017 – $200M
  • Fiscal Year 2017 /2018 – $200M

What To Do?

  • Apply immediatley for the current round of tax incentives
  • Evalaute other existing state and federal incentives
  • Discuss and understand your growth plans between now and 2018.

MGG has significant experience in identifying and documenting various federal, state and local tax incentives and credits and can work with you to determine your tax credit potential.