Tax Notes Newsletter “California Competes” Credit Applications Being Accepted Through April 14 Sandy Weinberg, Principal, Director of State and Local Taxation California has recently revamped its tax incentive and credits opportunities. New items include a sales and use tax exemption for manufacturers and companies conducting scientific research, a new hiring credit, and an income tax credit called “The California Competes Tax Credit” (hereafter “CCC”). To take advantage of the CCC in 2014 taxpayers must move quickly. Though only recently introduced, the California Governor's Office of Business and Economic Development (nicknamed “GO-Biz”) is only accepting applications through April 14, 2014. The CCC is unique because there are no specific criteria leading to its award. In fact, businesses must compete for a portion of the credits made available every fiscal year, and must negotiate credit agreements with GO-Biz for part of the pool. $30 million of tax credits are available this year to reduce business income and franchise taxes for eligible companies. That number increases to $150 million in fiscal 2014-15 and $200 million thereafter through 2017. Credit awards will be based on the following factors, all related to a taxpayer’s California business: Number of jobs created or retained Compensation paid or proposed to be paid (inclusive of fringe benefits) California investment Unemployment or poverty in business location Other incentives available to the business, both in/out of California, including those from state/local governments and other entities Sandy Weinberg Principal sweinberg@odpkf. com 203.323.2400