SACRAMENTO, Calif. (AP) — A state audit concludes California lawmakers should end a $780 million business tax credit program because it isn't bringing broad economic benefits and may be harming small businesses.
A Tuesday report from the Legislative Analyst's Office examines the California Competes tax credit program launched in 2013. It provides income tax credits to companies that promise to add jobs in California.
Nearly 200 companies won tax credits this year ranging from $20,000 to $8 million. They include giant companies such as General Motors and Hulu as well as small businesses.
The audit says the program awards one-third of credits to companies that primarily compete with other California businesses, which does not produce overall economic benefits and harms businesses that don't win the credits.
It suggests lawmakers end the program in 2018.