Category: California

California Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in California, and their state economic development professionals gave us some details (CA business portal site click here).
California offers a narrow selection of credits and incentives for new and existing businesses.  CNBC ranked California #32 in their 2016 America’s Top States for Business survey (Georgia was #8 in the same survey).  Predictably, California was ranked #49 in Cost of Doing Business! 
Incentives and Credits include:
California Competes –  The California Competes Tax Credit is an income tax credit available to companies that want to come to California or stay and grow in California.
New Employment Credit – The New Employment Credit is an income tax credit available to companies that hire full-time employees within designated geographic areas.
Employment Training Panel – – The Employment Training Panel (ETP) provides funding to employers for training associated with upgrading the skills of their workers.
Other Incentives — Some local exemptions and credits, Green Business, and other special and assorted incentive programs.
Compared to Georgia, California has:
  • Much higher corporate and higher personal income tax rates.
  • Higher combined state and local tax burden
  • A far narrower range of incentives.
  • Pre-approval required for all incentives
To summarize, California is below average for business tax incentives, but you can’t beat the West Coast location!