California Competes Tax Credit Application Now Open

It’s no secret the government uses tax policy to affect behavior. To what degree has behavior changed due to current tax policy? Well, the Internal Revenue Code, which started out as a 400-page document, now stands at almost 74,000 pages. We would have a hard time quantifying the effect of that many pages, so let’s look at something simpler. Tax breaks also provide incentives for people and organizations to act in a certain way, and one such program is called the California Competes Tax Credit.

Every state wants more jobs. Companies create jobs, so what can California do when Texas Gov. Rick Perry can wave around 0% personal income tax, while California’s richest pay 13.3%? They have put their hope in the Governor’s Office of Business and Economic Development’s (GO-Biz) California Competes Tax Credit. Applications are now open, with $30 million of income tax credits available the first year. Better hurry though, the deadline to apply for this year’s allotment is April 14th.

Some more information about the program:

-$380 million in credits available over the next three years

-No single company can claim more than 20% of the total credits available

-25% of the total available credits have been reserved for small businesses with less than $2 million in annual gross revenue

-The credit is nonrefundable and will offset California income tax with carryover provisions for 5 years

GO-Biz has a great FAQ about the credit, and they have done a great job on making a usable web application. You can tell they really want to give out all this money, so go get it, before we revert back to using Arnold billboards…

I can be reached at jmw@johnmarkwendler.

 

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