Local firms receive $29 million in tax credits
California lost hundreds of jobs to Texas over the past few months. The state awarded nearly $29 million in income tax incentives/credits for companies that have agreed to expand their operations and retain jobs within the state. The official announcement was made on Thursday.
The income tax credits approved by the newly-created California Competes Tax Credit Committee ranged from $20,000 for a Novato-headquartered stem cell biotech research firm to $6 million for Samsung Semiconductor. The stem cell research firm has promised to generate 8 new jobs, Samsung has promised to generate 400 jobs in the state.
San Diego-based Petco, which promised to create 263 full-time jobs, received $2.6 million; while Samsung Information Systems America received $2 million in exchange for its promise to generate 210 new jobs in Mountain View.
Amazon retail warehouse & distribution received $1.58 million. The retailer promised that it would create 1,550 jobs in Moreno Valley, Newark, San Bernardino and Tracy. Novartis Pharmaceuticals and Gilroy-based pet cremation service Animal Memorial Service Inc. were awarded $1 million and $40,000 by the committee.
The new tax credit program was created after the abolition of the state’s Enterprise Zone program. Governor Jerry Brown administration abolished the old program, calling it inefficient and wasteful.
Will Koch, deputy director of the new program, said applicants were assessed using a formula that weighed the number of jobs to be created and retained by a company; employees’ salaries; the rates of unemployment and poverty in the area where the company is situated; and the strategic significant of the business.
Nearly 400 companies had applied for more than $500 million in credits, but the committee awarded just around $29 million for this year. However, the total is expected to rise to $150 million in the next fiscal year that will start on July 1.
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