LARGE TAX CREDITS FOR CALIFORNIA COMPANIES
Three DCI Clients Awarded $100,000, $125,000 and $275,000
DCI Solutions, Inc. (www.DCISolutions.net) announced today that three of their clients, Chief Digital Advisors, North Star Sensors and EW Corporation Industrial Fabricators received substantial tax credits as participants in the Cal Competes round of awards that closed March 27, 2017. Chief Digital Advisors will receive $275,000, North Star Sensors will receive $100,000 and EW Corporation Industrial Fabricators will receive $125,000to help accelerate their growth.
Chief Digital Advisors (CDA, www.ChiefDigitalAdvisors.com ) was formed just a few years ago, but anticipates hiring more employees in the upcoming years. Their $275,000 award was based on their future headcount growth in California. “We plan on being one of the nation’s premier companies to help businesses build e-commerce capabilities and results,” says CEO Bill Parkes, chief executive officer, CDA. “This tax credit allows us to reinvest $275,000 right back into our company’s growth. This will help us to hire the best talent in the state.”
One of the areas DCI focused on when preparing CDA’s application was their emphasis on accelerating their clients’ ecommerce growth. According to Parkes, it is likely that CDA received such a high award because the state of California likes CDA’s growth potential and also how it can help CDA clients with their development.
North Star Sensors is a sensor manufacturer in Oceanside, California. “The $100,000 in state credits is a phenomenal way to offset the high cost of tax in California,” says Gregg Lavenuta, chief executive officer, North Star Sensors. “This award will be a tremendous help in these early years, and will make all the difference in our ability to manufacture and operate in San Diego.”
Though North Star Sensors is an early stage company, DCI highlighted North Star’s application to show the opportunity to keep this manufacturer in-state and to promote job growth and innovation.
EW Corporation Industrial Fabricators is a custom fabrication and machining corporation in El Centro, California that has been in business since 1973. “EW received the award in part because they are a manufacturer, as well as because of their location in an economically depressed part of the state,” stated Kirk Conole, partner, DCI Solutions.
Most companies applying for the Cal Competes tax credit are declined. “From our long experience and success in getting these credits for other clients we knew that Chief Digital Advisors, North Star Sensors, and EW all had a good chance of receiving sizable awards if presented strategically,” continued Conole. “The demonstration of qualifications, growth potential and positive impact to the State of California were pivotal components that were addressed.”
The California Competes program was enacted in 2013, and while any business can apply, awards are most likely to go to companies with high economic multipliers that are creating new jobs, investing in equipment or buildings, and/or provide good wages and benefits. Other factors considered include the extent of joblessness in the area where the business is located, as well as other incentives that may be available to the company in other states. The $200 million in tax credits being awarded are based on commitments to job creation over a five-year period.
“The tax credits are not well known or understood by most businesses,” said Conole. “Since an award can range from a $100,000 to a $10 million credit it would make sense for these companies to pay attention to this competition or hire a specialist who can help with the process.”
The Cal Competes tax credit is a great opportunity for certain small businesses in California to save large amounts of money on their state income tax. If the company is an S Corp then the tax credit will flow through to the personal S Corp shareholders. The window for the final Cal Competes application of the year opens July 24, 2017. Growing companies that are adding 2-10 employees per year should contact DCI in June in order to maximize their chances of winning an award and getting the optimum amount.