California’s Governor’s Office of Business and Economic Development has announced the dates for three new rounds of California Competes tax credits. The application rounds will take place: 1. July 25, 2016, through August 22, 2016 ($75 million available) 2. January […]
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The Sacramento Business Journal interviewed Madeline Janis, a member of the California Competes Tax Credit Committee about some of her recent stances on tax credit applications:
According to the Sacramento Business Journal: A Sacramento judge has thrown out a state rule that bars site-selection consultants from claiming a share of incentives awarded by the California Competes program. Sacramento Superior Court judge Timothy Frawley on Thursday sided […]
GO-Biz has announced the application deadlines for the next year of California Competes Credits: July 20, 2015, through August 17, 2015 ($75 million available) January 4, 2016, through January 25, 2016 ($75 million available) March 7, 2016, through March 28, […]
GO-Biz updated its FAQ for the California Competes Credit on April 29. Of interest is their update to the table listing historical credit to investment ratios for applications accepted into the second round of the application process: In addition, the […]
BNA Incentives Watch on California Competes
BNA’s “Incentive Watch” on the next round of California Competes credit and the ongoing legal controversy regarding regulating consulting fees:
As the deadline looms for another round of California Competes tax credit applications, demand is certainly going to outpace the supply of available credits. With recently issued final regulations for the credit, taxpayers have new considerations in submitting their applications, including a divisive requirement that applicants must disclose contingency fee arrangements.
The California Competes tax credit, first available to taxpayers in 2014, is aimed at fostering business relocation and expansion in California, and replaces the Enterprise Zone Tax Credit in California, which has been phased out. It gives credits to businesses based on several criteria, including job creation. For the most recent application period that closed Feb. 2, the California Competes program received 253 applications, requesting a total of $289 million. Unfortunately for applicants, the Governor’s Office of Business and Economic Development (GO-Biz) will only award $75 million in tax credits during the February application period. California will also award $31.1 million in credits, plus any unallocated funds from previous applications periods, for the final round of applications, which are being accepted starting March 9.
In the January application round, GO-Biz received 286 applications requesting $329 million in credits. Ultimately, 56 companies received $31 million in tax credits. This brought the total amount of credits awarded through the program up to $60 million.
In February, final regulations governing the California Competes credit took effect. Although the final regulations are similar to emergency regulations adopted last year, there are a few changes, including a provision that allows companies to apply for the credit multiple times, provided they meet additional investment and employment requirements.
One of the more controversial regulations is the requirements regarding contingency fee arrangements between applicants and third parties that prepare the credit application. Not only are applicants required to disclose these fee arrangements, but the arrangements will be reviewed by GO-Biz to ensure that fees are reasonable. This regulation led to a lawsuit by Ryan LLC, a tax services firm headquartered in Dallas, Texas, challenging the contingency fee disclosure requirements.
This is not the first time that California has tried to restrict contingency fees. According to the complaint in the Ryan case, California has twice introduced legislation that restricts contingency fee arrangements in tax-related matters, but neither was enacted into law. On the federal level, the DC District Court, in Ridgely v. Lew, invalidated the I.R.S. Circular 230 contingency fee ban on tax practitioners.
The Ryan complaint alleges that GO-Biz abused their rulemaking powers by adopting regulations which conflict with California law. The complaint alleges that California law specifies the factors used in determining which businesses receive California Competes credits and that consideration of the contingency fee arrangement imposes an additional condition on tax credit applicants. California issued an answer to the complaint on Feb. 20.
GO-Biz updated its FAQ for the California Competes Credit on Feb. 6. Among the changes is an updated table of investment to tax credit ratios that were accepted into the second round: In addition, final regulations were approved on 2/5/2015, […]
California’s GO-Biz just sent out the following press release: Sacramento, Calif. – Building on the state’s effort to help businesses expand and create new jobs, the Governor’s Office of Business and Economic Development (GO-Biz) today announced that it received a […]
On January 15, the California Competes Tax Credit Committee met to make final determinations on the second ever round of California Competes applications. All 56 agreements considered were awarded for a total of about $31 million. A 57th applicant who […]
The largest ever <a href=”http://www.business.ca.gov/Programs/CaliforniaCompetesTaxCredit.aspx” target=”_blank”>California Competes</a> tax credit application round starts today with $75 million available. This is the second of three rounds anticipated for the 2014/2015 fiscal year. GO-Biz recently updated their <a href=”http://www.business.ca.gov/Portals/0/CA%20Competes/Docs/CCTC_FAQ.pdf” target=”_blank”>FAQ</a> with updated information […]
The FTB has posted a notice explaining its procedures for reviewing the books of taxpayers who are awarded California Competes Credits.
On October 31, GO-Biz released a set of emergency regulatory changes which can be found here. For the application period ending October 27, GO-Biz received 286 applications. According to their press release: For fiscal year 2014-15, GO-Biz is authorized to […]
The Sacramento Business Journal examines the recent regulatory limitations GO-Biz has placed on consulting fees: Is the Brown administration hurting California by banning commissions for consultants who help companies win tax credits? Some consultants themselves disagree on that question. In […]
The Sacramento Business Journal reports that the Dallas-based tax consulting firm Ryan is suing GO-Biz over newly enacted emergency regulations that seek to limit the fee arrangements allowable for the California Competes Credit: In August, the agency known as GO-Biz […]
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