GO-Biz offers an array of programs that support business growth in California
California’s Office of Economic Development otherwise known as “GO-Biz” offers an array of programs that support business growth. Beginning this year, California is offering tax incentives to help support business growth and job creation including the California Competes Tax Credit and Manufacturing and R&D Sales Tax Exemption. In addition, GO-Biz provides permit and other economic development assistance. TMC encourages businesses to learn more and take advantage of the available programs today.
Small Businesses Reap the Rewards of Job Creation in California
The California Competes Tax Credit (CCTC) recently took effect and the committee recently announced the first 29 companies that were approved for $28.9 million in tax credits for fiscal year 2013. Awards were given to the businesses with the best plans for job creation and economic expansion in California. “These credits provide significant incentives for companies to invest, create jobs and strengthen California’s economy,” says State Treasurer Bill Lockyer, a member of the California Competes Tax Credit Committee. The winning companies are projected to create nearly 6,000 jobs and invest over $2 billion in California.
Recent awards ranged from $20 thousand to $6 million and awardees are excused from paying state incoming taxes up to the amount their business was awarded. Any small business can apply and a quarter of all funds are secured for businesses with revenues under $2 million. These small businesses will be judged independently of the larger firms. Businesses that show a great track record of job creation and retention, high compensation paid to employees, positive economic impact, strategic importance to the state or region, and show an opportunity for future growth and expansion are likely candidates to win these credits. For fiscal year 2014 even more money will be available with the award pool increasing to $150 million for tax year 2014 and again to $200 million for 2015.
Small businesses who utilize an SBA 504 loan to expand their operations or take advantage of 504’s low down-payment to hire new employees are already well on their way to becoming a likely candidates for these tax credits. Application to the program is free and businesses can apply every year. TMC highly encourages application to the program at Cal Competes.
To learn more visit CCTC Tax Exemption
New Equipment Tax Exemption for Manufacturers and R&D Firms
Beginning July 1st, 2014, a new California law allows manufacturers and some R&D firms to receive a 4% exemption of state sales and use tax on equipment and machinery purchases. For businesses that file taxes as a manufacturer (NAICS codes beginning in 31, 32 or 33) or as a Research & Development firm (filing under NAICS codes 541711 or 541712), part of the sales tax will be waived by the seller by simply attaching an exemption form to the purchase. Qualified purchases include machinery and equipment integral to the manufacturing process. Even better, these equipment purchases can be financed with either 10 or 20 year SBA 504 loans (terms based on the useful life of the equipment).
The SBA 504 program was designed to enable growing businesses the ability to secure long-term, fixed-rate financing for commercial real estate, machinery and equipment with as little as 10% down. With an SBA 504 loan you can borrow up to $5.5 million in SBA financing with no limit to the total cost of equipment.
For more information visit the Manufacturing and Research & Development Exemption site or Contact TMC.
Go-Biz provides Permit and Other Economic Development Assistance
Even if you are not interested in these tax credits, the Go-Biz site may still be an excellent resource for your business. With permit and other economic development assistance to ease the way for growth in California, we recommend visiting the Go-Biz site.