Three key points for Cal Competes
Unlike calculation-based tax incentives, California Competes applicants vie against one another for a limited pool of available funds. The online-only applications undergo a two-phase review and approval process by a newly created California Competes Tax Committee. Fierce competition is expected for this lucrative program.
Awards are granted on a case-by-case basis, with applicants requesting award amounts and negotiating final credit agreements with GO-Biz.
The two-phase analysis is designed to award tax credits to companies that create the highest number of jobs and deliver the greatest economic benefit to the state. Factors evaluated include:
- The number of new full-time jobs added
- Employee compensation and benefits
- How many jobs the company will create in poverty-stricken areas with high unemployment
- The company’s overall investment in the state
- How long the business commits to remaining in California
- The company’s potential for growth/expansion
- The business’ strategic importance to the state, region, and/or locality
- The extent of the state’s anticipated benefit weighed against the company’s tax-credit benefit
- Other quantitative and qualitative factors, including competition from other states