1. [OPTIONAL] Cover splash screen that can be displayed at the beginning of an event while people are coming in or logging on. This slide is optional and can be removed if desired.

2. California Competes Tax Credit Program
Notes for LPD/Course Developer(s):
This is the title slide. It should match the official course title and course number exactly.

3. Welcome and Introductions
Annette Fago, West Region Credits & Incentives Leader
(415)
Pat Carney, West Region. State and Local Tax Practice Leader
(213)

4. RSM US LLP
Our State and Local Tax Practice provides tax compliance and tax consulting services including:
Income/Franchise Taxes
Sales and Use Tax
Unclaimed Property
Employment Taxes
Credits and Incentives

5. Credits & Incentives Opportunities
All states compete for jobs and investment
States send representatives to California to meet with companies considering expanding or relocating
Most incentives are offered at the discretion of the state and/or local jurisdiction
Incentives are offered in many forms including tax credits, grants, abatements, utility discounts, and property taxes

6. Incentives Outside California
Arizona Quality Jobs Tax Credit
Tax credit available to companies creating new jobs and making new capital investments
25 net new jobs and $5m in investment, depending on wages paid the investment requirement can be reduced
Up to $9,000 in tax credits/per job over three years
Utah EDTIF
Tax credit rebate for up to 30 percent of new state tax revenues
50 net new jobs, pay above average wages
Benefit period ranges from five to ten years
New Mexico High Wage Jobs Tax Credit
Tax credit rebate for each new high-wage job created
Up to $12,000 per qualified job, per year
Credit is available for four years and can be applied against gross receipts tax, compensating tax and withholding tax

7. California Competes Tax Credit - Overview
Credit against the income tax due the Franchise Tax Board
Non-refundable
6 tax year carryover
Accountability
Tied to achieving contractual (hiring/investment) milestones
Recapture provisions
*The information provided in this presentation may be found on the California Governor’s Office of Business and Economic Development.

8. California Competes Tax Credit – Evaluation Criteria
Credit awards are based on 12 factors
Number of jobs created or retained
Compensation paid to employees
Amount of investment
Duration of proposed project and commitment to remain in this state
Extent of unemployment or poverty in business area
Extent the benefit to the state exceeds the amount of the tax credit
Incentives available in other states
Opportunity for future growth and expansion
Other incentives available in California
Overall economic impact
Strategic importance to the state, region or locality
Training opportunities offered to employees

9. California Competes Tax Credit – Evaluation Criteria
GO-Biz is also required to evaluate the extent to which the credit will influence the applicant’s ability and/or willingness to create new full- time jobs in California that might not otherwise be created by the applicant or another California business
How will this credit and – more specifically – the amount of credit being requested factor into the applicant’s ability or willingness to expand in California?

10. California Competes Tax Credit Availability & Application Periods
Amount of Credits Available
180 million per fiscal year 2018/19 through 2022/23
No more than 20% may go to any one applicant per fiscal year
Application Periods
Fiscal Year
July – August 20, 2019
$70 million available
January 2, 2019 – January 21, 2019
$75 million available
March 2019 – March 25, 2019
Any unallocated remaining amounts

11. Credit Application and Award Process
Phase I
Quantitative analysis
Cost-benefit ratio
Phase II
Comprehensive evaluation based on nine additional factors and the Phase I ratio calculation
Agreements
Must be approved by the California Competes Tax Credit Committee
Post Committee Approval
Information Posting
Required Reporting
Agreement Compliance

12. Amount of Credit Requested
Phase I Evaluation
Cost Benefit Ratio:
Amount of Credit Requested
Aggregate Employee
Compensation
Aggregate Investment
Applications with the most advantageous cost-benefit ratio will be moved to Phase II
There will be a review of the top 200% of applicants

13. Exemptions to the Phase I Calculation
GO-Biz may move an application to Phase II, regardless of ratio the applicant certifies that:
absent award of the credit, the applicant’s project may/will occur in another state, or the applicant may/will terminate or relocate all or a portion of its employees to another state, or
at least 75% of the applicant’s net increase of full time employees work at least 75% of the time in an area of high unemployment or high poverty

14. Phase II Evaluation Phase I information Extent of unemployment/poverty
Economic impact
Number of retained employees
Opportunity for growth/expansion
Other incentives available
Wages/benefits
Strategic importance
Training opportunities offered to employees
Other information requested

15. Terms and conditions of the agreements include:
Minimum employee compensation and retention period
Credit distribution period
Recapture provisions if applicant fails to meet commitments
Tax credit agreements must be approved by California Competes Tax Credit Committee
Committee Members: State Treasurer, Director of the Department of Finance, two legislative appointees, and the Director of GO-Biz (Chair)

16. Agreements

17. Oversight/Accountability
Franchise Tax Board (FTB)
Access to application and all documentation
Must review books/records for agreement compliance*
Material Breach
FTB informs GO-Biz
Committee approves or denies recapture
* Discretionary for businesses with base year gross receipts under $2 million

18. Notes for Course Developer(s):
If including a question and answer session, this is the preferred splash screen to denote that. This slide can be removed if desired.

19. Notes for Course Developer(s):
This should be the final slide of the presentation.