Millions in Tax Credits Available for Businesses through Cal Competes Program
The California Governor’s Office of Business and Economic Development (GO-Biz) is now accepting applications for the California Competes Tax Credit program. $236 million in tax credit funds are available for the 2019-2020 fiscal year. Objectively the highest profile and dollar value incentive program offered in the State, the Cal Competes program seeks to offset some of the costs associated with expanding or locating a new business operation in California.
The program is structured as a tax incentive that can be applied against future taxes on earnings up to six years beyond the incentive award allocation date. Evaluation criteria for the application include the number of jobs created (or retained), the amount of investment, the compensation paid to employees, the location of the business, and the likelihood of future growth and expansion. In addition, business sectors considered of strategic importance—including advanced manufacturing, life sciences, and clean energy—receive additional points in their application.
A great feature of Cal Competes is that the program is open to businesses of all sizes, with incentives ranging from $20,000 to $10 million and greater. Last year, Lockheed Martin set a program record when it received $33 million in credits for launching a new fighter jet production line in the State. However, businesses do not need to be major corporations to participate: a full 20 percent of the tax credit allocations are earmarked specifically for small businesses with $2M or less in revenues.
Since the program was launched in June 2014, Fremont businesses have received more than $30 million in incentive credits. These include 3D printing medical device maker PrinterPrezz, supply chain management services provider ALOM, pharmaceutical researcher and manufacturer Boehringer Ingelheim, computer server manufacturer Hyve Solutions, electrical equipment manufacturer IEM, advanced materials manufacturer Materion Electrofusion, electronics manufacturer Excelitas, and well known electric automobile manufacturer Tesla Motors. Collectively, these companies have committed to investing more than $2.6 billion and creating 5,000 new jobs.
For fiscal year 2019-2020, the Governor’s Office of Economic Development (GO-Biz) will accept applications for the California Competes Tax Credit during the following periods:
- July 29, 2019, through August 19, 2019 ($90 million available)
- January 6, 2020, through January 27, 2020 ($75 million available)
- March 9, 2020, through March, 30, 2020 ($71.8 million plus any remaining unallocated amounts from the previous application periods)
The Fremont economic development team is available to assist any businesses that may be interested in taking advantage of this unique program. If you think Cal Competes can benefit your business, please drop us a line!