'Califonria Competes' tax credits now awarded for creating jobs.

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California Competes Tax Credit Program
Presented by Bruce Dobb, Concerned Capital
March 2014
ConcernedCapital(323)8559445

Concerned Capital
• Concerned Capital is a social benefit corporation helping
small business grow and create positive social change.
• Use tax credits & government grants and/or loans to create
jobs & green technology.
• Help companies grow in urban areas
• I’m Bruce Dobb, CEO and founder
• Contact Info: bdobb@concernedcapital.org
323 855-9445
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Disclaimer: Not your accountant or lawyer and
not providing tax or legal advisory services.

Today’s Webinar
• Overview - What is the California Competes Tax
Credit?
• Does it applies to your company and how you
can use it
• The application process - April 14th
deadline
• Questions and Answers as we go
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The Overview
The Governor’s Office of Business and Economic Development (G0 Biz Web
Site) newly created to attract and keep businesses in California
• Financial assistance and loan programs
• Labor availability and education information
• State and local permit assistance
• Transportation and infrastructure information
• Information on incentive programs
• Economic and demographic data
.California Competes Tax Credit – IS TODAY’S FOCUS
FY 13/14 application period is March 19 through April 14
GO-Biz administers
.Manufacturing Partial Sales Tax Exemption - Starts July 1, 2014
Board of Equalization administers along with revised Enterprise Zone Tax
Credit Program – will not be covered today..
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Advantages of New Program over
the Old Enterprise Zone Program
• Go to FBI Webinar TAX INCENTIVES FOR THE FASHION
INDUSTRY to understand old program
• No voucher process -No application cost-voucher charge is
now $75 per voucher application in LA County.
• New program has set-aside for small business with sales less
than $ 2 million per year
• No geographic restrictions
• Credit can be applied to personal outside income
• Old program -
http://www.hcd.ca.gov/fa/ez/enterprise/newmap.html
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California Competes Tax Credit
The California Competes Tax Credit is an income tax credit available to
businesses that want to locate in California or stay and grow in California.
Based on 11 factors:
• # of jobs to be created or retained
•Compensation paid to employees
•Amount of total investment
•Extent of unemployment or poverty in business area
•Other incentives available in California
•Incentives available in other states
•Duration of proposed project and duration of commitment
to remain in this state
•Overall economic impact
•Strategic importance to the state, region, or locality
•Opportunity for future growth and expansion
•Extent the benefit to the state exceeds the amount of the
tax credit
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Dollars Available
California
Competes
Tax Credit -
Tentative
amount of
credits
available:
•$30
million in
fiscal year
2013/14
•$150
million in
fiscal year
2014/15
•$200
million in
each fiscal
year
2015/16 -
2017-18.
•No more than
20% may go
to any one
applicant
•25% of total
amount each
fiscal year
reserved for
small
business
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What’s In Awarded Agreement
Negotiated written agreement between GO-Biz and the applicant
for the credit. Terms and conditions of the agreements to include:
Minimum employee compensation and retention period
Credit distribution period – one to 5 years
Recapture provisions if applicant fails to meet commitments
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Who Can Apply
ENTITY TYPES INCLUDE
•Individual (sole
proprietor)
•C Corporation
•S Corporation
•General
Partnership
•Limited
Partnership
•LLC (treated as a
partnership)
•LLC (treated as a
corporation)
•Other Type
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KEY POINT IS THE CREDIT IS TRANSFERABLE TO PERSONAL TAX LIABLITY

Application – Phase I
On-line
application
submissions ONLY
No fee
needed to
apply
Rolling
application
process
versus
expiration
date set
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Evaluation Process
Applications with the
highest cost-benefit ratio
will move into the second
phase
Applications from
small businesses
will be compared
to applications
from other small
businesses
The first phase is a
quantitative
evaluation
Entire process to
take 90 days
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The Formula for Success
Aggregate Employee Compensation Package +
Aggregate Investment Package
Divided by
Amount of Credit Requested
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What’s in this Formula
• The number of full-time employees is determined on an
“annual full-time equivalent” (AFTE) basis
• One AFTE employee is:
•For full-time employees paid by the hour, 1,750
hours worked for the applicant during the tax year
•For salaried full-time employees, 50 weeks
worked for the applicant during the tax year
• Only employees that work on average 35 hours or more per
week in California are taken into consideration for this
computation
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What Counts as Investment
“Investment” is real and personal property
purchased related to the applicant’s business
that is placed in service in California
Purchases up to one year prior to the date
the applicant files its California Competes
Tax Credit Application
Projected purchases during the 2014-2018
tax years
Use aggregate investment package calculator
at Go Biz Website for final number
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Example of One Ratio
.Amount of credit requested = $300,000 over 5 years - $ 60,000
per year
Aggregate employee compensation = $1,431,384.75 over 5
years
Aggregate investment = $1,050,000 over 5 years
$300,000 Divided by $ 2,481,384 ($1,431,384.75+$1,050,000)
Ratio = .1209
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Ranking Applicants
Fringe Benefits
Provided Employees
Job retention and
unemployment/pove
rty in area
Opportunity for
future growth and
expansion
Economic impact in
California –Strategic
importance
Incentives available
in/out of state
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Phase II of the Process
GO-Biz will contact applicants moved into Phase
II and additional information will be requested,
including:
• Description of benefits/fringe benefits provided to
employees
• Entity relationship chart, parent company, affiliated
corporations
• Financial information and/or related business
documentation to verify information provided in the
application
• Readiness and site control
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Negotiation and Award Phase
GO-Biz and applicant will negotiate terms of the
contract
GO-Biz will recommend fully executed contracts
for Committee approval
Contract will be made public prior to the
Committee meeting
Committee will either approve or deny the
recommendation
Award information will be posted on GO-Biz’s
website upon approval by the Committee within
5 business days
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This Works for You If:
1. You’re creating new jobs and investment
or faced with a choice of staying or
leaving California
2. If you pay State taxes – not everyone
does.
3. You’re not JUST creating jobs but will be
expanding or adding new investments
4. You can demonstrate how your jobs are
critical to the community you’re in
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THANK YOU FOR YOUR TIME
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• Contact Info: bdobb@concernedcapital.org
323 855-9445

Qualifications for New Hires Under
2014 Revised Tax Credit Program
• Unemployed for the six months immediately preceding hire. If the
individual completed a college or similar program and received a
baccalaureate, postgraduate, or professional degree, the completion
date must be at least 12 months prior to hire. For purposes of this
definition, an individual is unemployed for a period if all of the following
circumstances apply:
• Not receiving wages subject to withholding.
• Not self-employed.
• Not a full-time student at a high school, college, university, or
postsecondary education institution.
• Veteran separated from the U.S. Armed Forces in the preceding 12
months.
• Recipient of the Earned Income Tax Credit in the previous taxable year.
• Ex-offender convicted of a felony.
• Current recipient of CalWORKS or general assistance in accordance with
the applicable sections of the Welfare and Institutions Code.
----
• NOT REQUIRED FOR CALIFORNIA COMPETES INITIATIVE
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'Califonria Competes' tax credits now awarded for creating jobs.

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