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The Big Picture San Diego Blog


SD receives third highest percentage of Cal Competes tax credits in the state

December 1, 2017

The California Competes Tax Credit (CCTC) is an income tax credit program available to businesses expanding in or relocating to California. Created in 2014 by the California legislature and overseen by Governor Jerry Brown’s Office of Business and Economic Development (GO-Biz), Cal Competes offers variable amounts of tax credits to companies based on commitments to hire full time employees over a span of five years. In 2017, 293 California companies were awarded more than $210 million in tax credits.

Since the CCTC program inception, more than 110 San Diego companies have received $61.1 million in tax credits tied to the creation of more than 8,433 jobs. San Diego consistently ranks among the top three metros in the state for tax credit distribution, with 2017 as no exception. This year, 37 San Diego companies were awarded nearly $24 million (11.35 percent of total) in tax credits in exchange for the creation of 2,000 new jobs, $200 million capital investments and $500 million in wages paid over the next five years. San Diego received the third highest percentage of credits in the state, behind only Los Angeles and San Francisco.

Credit recipients span the region from Oceanside down to Chula Vista, representing businesses large and small across a variety of industries including biotech, software development, manufacturing, defense and more. Of all 37 San Diego companies in 2017, medical device manufacturer NuVasive was awarded the largest credit of $3 million for its commitment to create 245 new jobs over the next five years. Additional recipients in 2017 include Ballast Point spin out Cutwater Spirits ($2M credit for 64 jobs); game developer Psyonix ($1.2M credit for 69 jobs) and LED manufacturer Hyperikon ($975K credit for 75 jobs).

During the CCTC application process, companies are classified as either large or small. Throughout the 2017 rounds, San Diego small companies performed particularly well compared to other metros. Of all credits distributed in the small business category in 2017, 21.2 percent came to San Diego firms – the second highest of all California metros. San Diego small businesses received nearly $8 million in credits, with plans to create 400 jobs in the region over the next five years.

San Diego’s large companies performed admirably as well, receiving $16 million – or 9.2 percent – of the total credits awarded in the large business category, coming in third for highest percent of credits within the category.

The next application round will look to award $100 million in credits and will open January 2, 2018 and close January 22, 2018. Just before the round opens, GO-Biz host a free workshop hosted on Friday, December 8. Businesses interested in applying can register to attend any of the workshops and receive customized technical assistance from GO-Biz staff.

For additional questions about how to complete a competitive application, please feel free to contact Jesse Gipe at jg@sandiegobusiness.org.