As always, Laura Mahoney provides detailed clarity on California’s tax incentive programs:
Demand for a new tax credit aimed at business expansion in California continues to outstrip supply as state regulators iron out details for awarding the credit and recouping it if businesses don’t live up to their promises.
About 250 businesses asked for $289 million in credits from a pool of $75 million to be awarded by the Governor’s Office of Business and Economic Development (GO-Biz) April 16. It’s the third application round since the program was created in 2013, and the application window closed Feb. 2.
In the first two rounds, 400 companies asked for $500 million in credits from a pool of $29 million awarded to 29 companies in June 2014, and 286 companies asked for $329 million from a pool of $31 million awarded to 56 companies in January 2015.
A total of $151.1 million is available in the 2014-15 fiscal year, with one more round of applications and award of the final $31.1 million scheduled for June 18. In the next fiscal year, $200 million will be available for the credit.
In exchange for the credit, companies commit to creating and retaining jobs, and investing in equipment, intellectual property and other business development tools. It helps if they plan to invest in areas with high poverty and unemployment rates.
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