State awards a $5 million tax credit for job creation. Who’s hiring, and how many people?
The expansion of Fresno-based Bitwise Industries is not simply limited to its growing physical footprint across Central California.
In addition to its own operations, the technology company serves as a landlord to technology firms and entrepreneurs in Fresno and Bakersfield and is adding a location in Merced. Now it’s receiving $5 million in tax credits from the state of California over the next five years to support its plans to add more than 800 employees to its staff and invest $24 million in the business by 2024.
GoBIZ, the Governor’s Office of Business and Economic Development, announced that Bitwise is among 22 companies across the state to receive more than $73.5 million in California Competes tax credits for job creation and spur investments in the businesses.
The tax credit agreement between the state and Bitwise calls for a staggered increase in employees over five years: from 95 full-time employees in the 2019 tax year, to 181 in 2020, 297 in 2021, 459 in 2022, 660 in 2023, and 902 in 2024. The minimum yearly pay for those positions will be $41,600, and the average wage will be $64,000 a year, according to the tax agreement.
Bitwise is required to invest $4 million in its business in the 2020 tax year, and $5 million each year in 2021, 2022, 2023 and 2024. The new investments may include office space, tenant improvements, furniture and fixtures, computer equipment and vehicles for Bitwise expansion plans in Fresno, Bakersfield, Merced and possibly Oakland. Under the terms of the agreement, at least 75% of the new employees will work in Fresno, which is “an area of high unemployment and/or an area of high poverty” under the state’s award criteria.
In exchange, Bitwise will receive a tax credit that increases each year, as long as it abides by the employment and investment milestones, escalating from $250,000 in the 2020 tax year to $1.5 million in 2024.
The California Competes Tax Credit Committee approved the awards for Bitwise and the other companies in its meeting last week in Sacramento.
The agreements awarded last week are intended to generate almost 6,000 new jobs in the state, as well as almost $435 million in new business investment.
The committee also voted to terminate tax credit agreements with Valley businesses and take back previously awarded credits for “material breach” of their agreements.
- Carter & Co. Communications, a Fresno public relations firm, won $250,000 in tax credits in 2015 based on an agreement to add 30 employees and invest $480,000 in the company by 2019. The company’s president, Holly Carter, died last year after a decade-long fight against cancer.
- Dockstader & Dockstader Inc., an automotive repair business in Fresno and Clovis, was awarded $280,000 in tax credits starting in 2017, based on an agreement to add 37 new employees and invest $1.9 million in the business by 2021.
- Helios Document Solutions, an office equipment company operated by Geraldine A. Santellano-Bartsch, was awarded $20,000 in tax credits in 2015 based on an agreement to add nine new employees and invest $115,000 in the business by 2018.
Another Valley company, CenCal Solar Inc. of Clovis, requested the termination of its 2017 CalCompetes agreement for $100,000 in tax credits because its business plans had changed and it would not be carrying out business as indicated in the agreement. The request allows the tax credits to be made available to other businesses.
