California Tax Credits and Incentives

To continue economic growth, California administers several incentive programs that could apply to both local businesses and out-of-state expansions into the state. Below is an overview of California’s most widely used incentive program.

What is the California Competes Program

The California Competes Tax Credit is an income tax credit available to businesses that want to locate or stay and grow in California. A total of $492,129,004 in California Competes Tax Credit is available for allocation in the 2023-2024 fiscal year. It’s open to businesses of all sizes

What are the evaluation factors?

  1. Number of jobs created or retained Compensation paid to employees, including wages and fringe benefits

  2. Strategic importance to the state, region, or locality

  3. The extent of unemployment and poverty in current or proposed site location

  4. Economic impact

  5. Training opportunities offered to employees

  6. Incentives available from in-state, out-of-state, and federal government sources

  7. Duration of the proposed project and applicant’s commitment to remain in California

  8. Opportunity for future growth and expansion

  9. Amount of investment

Explore the California Competes Most Frequently Asked Questions.

California Employee Training Panel Incentives Program

What is the California Employee Training Program (ETP)?

The California Employment Training Panel (ETP) operates a program to incentivize vocational training through performance-based contracts. It aims to help California employers train their workforce effectively and maintain a skilled labor pool. The program is financed by the Employment Training Tax paid by California employers, to stimulate job growth and assist employers impacted by out-of-state competition. Since its inception in 1982, the ETP has reimbursed over $1 billion to employers for training over 800,000 workers in California. 

Summary of Program

The ETP provides $8 to $26 (per hour/per eligible employee trainee) as reimbursement for employer training expenses. Contracts generally have a two-year time frame and allow for up to 200 hours of training per trainee. Minimum wage, retention periods, and employer contribution are required to receive ETP funds. Eligible training includes most job-related skills courses provided by an employer or outside vendor.

The following priority industries receive preferential treatment:

Manufacturing/Food Production

  • Biotech/Life Sciences

  • Information Technology

  • Multimedia/Entertainment

  • Goods Movement and Transportation/Logistics

  • Agriculture

  • Allied Healthcare

  • Construction/Green/Clean Technology

Download our informational guide to learn more!