For such a big state, California has few incentive programs at the state level. Nevertheless, the ones it does have are expensive and wasteful, totaling more than $5 billion dollars, including five megadeals. The infamous Film Tax Credit costs $330 million a year and was extended to 2030 in 2023. Even the redevelopment agencies that were dissolved in 2012 are still paying back their bond debts. On the local level, cities can “share” sales taxes with retail companies; major recipients of this secretive and controversial subsidy scheme include Apple, Gap and Ulta. 

California’s incentives are governed by a mixture of agencies, including the Governor’s Office of Economic Development, the California Film Commission, and the State Treasurer’s Office. At the local level, Enhanced Infrastructure Financing Districts and Community Revitalization Investment Authorities have replaced the now-defunct tax increment financing districts.  

California stands to improve its disclosures of company-specific information. The list of recipients is provided for Employment Training Panel (ETP), the Sales and Use Tax Exclusion (STE) programs, California Competes Tax Credit, among others. 

California’s tax expenditure budget has minimal information. California is one of the few states that do not report tax abatements pursuant to Statement No. 77, claiming that none meet the criteria. Some cities and counties do, but school districts generally don’t, as they do not levy taxes independently. California’s tax expenditure budget also has little detailed information.  

Incentives are evaluated on an ad hoc basis with neither an established body nor an established schedule. As the state has few programs, it should not be onerous to do frequent audits. In fact, it was because of an audit that the expensive and ineffectual Enterprise Zone program (known as redevelopment) was terminated.   

Our database tracking corporate misconduct, Violation Tracker, scours 450 federal, state and local agencies in compiling resolved civil and criminal cases against companies. See the list of state agencies from which we collect information in California.

Last Updated October 2023.

For more information, contact Jacob Whiton at [email protected].