Applications for a new tax credit targeting out-of-state businesses and those in California considering relocation will soon become available.
Understanding what the California Competes Tax Credit is about is all in the name, said Brady Bryan, founder and CEO of BRAYN Consulting LLC, a knowledge firm that helps companies take advantage of research and development tax incentives.
“(Gov.) Brown is really trying to show that California can compete, we’re not going to sit here and watch our businesses walk across the state line,” said Bryan, also a member of the Santa Clarita Valley Economic Development Corporation.
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California Competes is meant to contrast the aggressive marketing of tax credits in other states, and will be given to businesses based on a slew of factors that include considering the incentives already offered to the business in California and other states.
Other factors considered include, but are not limited to, the number of jobs the business will create or retain in California and the amount of investment in California by the business.
Bryan said regulations have not been finalized, but businesses could start to apply in April.
“It’s a little different than other tax credits, being multi-phased it’s more complicated, but we (BRAYN Consulting) expect it to be a very lucrative credit,” Bryan said.
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California Competes is not meant to target companies part of a specific industry or geographic location. The multi-phased process will begin with a committee comparing the credit requested by businesses versus the investment those businesses are expected to make. The second stage will be a detailed economic analysis of the benefits of those businesses to their community. Then there will be a negotiation process.
“The applicant really has an opportunity to explain why they are worthy of this credit, that opportunity to voice your value to the state is better than just taking some credits based upon geography,” Bryan said.
Applications will be considered by The Governor’s Office of Business and Economic Development (GO-Biz) and 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.
To learn more about the California Competes Tax Credit you can visit the Governor’s Office of Business and Economic Development website and attend BRAYN Consulting LLC’s presentation on tax incentives available to those in the Aerospace and Defense industry Jan. 17.
More information: Business
Source: Santa Clarita News