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Monday, May 20, 2024

California Revokes Tax Credits

Companies fall short on reaching hiring milestones.

A number of manufacturing companies and one tech company from the greater Valley region had their California Competes tax credit recaptured as they were in breach of the agreement to create jobs. 

Additionally, one Valley area company, Viking River Cruises Inc., received nearly $4 million from the Governor’s Office of Business and Economic Development, or GO-Biz, for a CalCompetes tax credit for expansion at its Woodland Hills headquarters.

CalCompetes plays a role in attracting and retaining startups and established companies alike, who in turn create good-paying jobs and increase economic opportunity for California workers, according to a release from GoBiz.

Among the companies that had their tax credits recaptured were Wynstan USA Inc., a Carson-based manufacturer and retailer of security screens, blinds, shutters and awnings with a showroom in Encino. 

According to the release from GoBiz, the agency found that Wynstan was in material breach of its agreement and recommended that its full $300,000 tax credit be taken back. 

“In consideration for the credit, taxpayer agrees to hire full-time employees and invest in manufacturing equipment, vehicles, computer equipment, furniture and fixtures, manufacturing equipment, and tenant improvements as part of its expansion in Carson, Encino and Pasadena,” the agreement said.

The agreement also stated that a material breach was one in that includes, but is not limited to, failure to provide paperwork regarding successful completion of employment milestones; making misstatements to GoBiz as part of its application; failure to materially satisfy employment milestones; or failure to maintain employment milestones for three years. 

Other businesses that were recommended to have their tax credits recaptured include Martin Materials Solutions Inc., a Camarillo aerospace component manufacturer for the full amount of its tax credit of $100,000; Sierra Technical Services Inc., a Tehachapi aerospace parts manufacturer for the full amount of its tax credit of $600,000; and Siteserver Inc., a web hosting services firm in Simi Valley for its full tax credit of $250,000. 

In the cases of Martin Materials and Siteserver, the reason for the recapture was that the companies had not met milestones when the agreement ended last year. For Sierra Technical, the reason given for the recapture was that the Antelope Valley company had notified GoBiz “that it will not be carrying out its business as contemplated in its approved California Competes Tax Credit Agreement and has requested the termination of its agreement to allow the credit to be made available to other California businesses,” according to the agency’s release. 

As for Viking River Cruises, the company will receive $3.9 million “to hire full-time employees and invest in tenant improvements, furniture and fixtures, and computer equipment as part of its expansion in Woodland Hills,” according to the agreement. 

Viking has agreed to add 181 new employees at its Valley office through the 2026 tax year and invest $9 million of its money during the same time. 

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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