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Archive for the ‘Tax News’ Category

FTB Publishes FAQ Regarding The Caliornia Competes Tax Credits and the Winding Down of the EZ Program

Monday, September 16th, 2013 | Enterprise Zones, Legislation, Tax News


Here is the link to the FTB’s FAQ page.

Vouchering Expected to Continue Through 2014

Monday, September 16th, 2013 | Enterprise Zones, Legislation, Tax News


Both houses of the California legislature passed AB106 which provides that vouchering will continue through the end of 2014.  The bill also clarifies that the ten year limitations period begins in 2014.  The governor is expected to sign the bill.

Governor Brown Will Sign AB93 Into Law Today

Thursday, July 11th, 2013 | Enterprise Zones, Legislation, Tax News


Governor Brown is expected to sign AB93 into law today in San Diego.  Along side him will be Republican Senator Anthony Cannella.

The New Rules Under AB93

Tuesday, July 9th, 2013 | Enterprise Zones, Legislation, Tax News

Under A.B. 93, the California EZ program will be replaced with a hiring credit with significant limitations, and will impose stricter qualification requirements, such as:

  • Demonstration of a net increase in new full time employees;
  • Wages must be between 150-350% of California’s minimum wage; and
  • The employee must qualify under one of four criteria:
    • Unemployed/displaced worker;
    • A U.S. military veteran:
    • An ex-offender; or
    • Recipient of the Earned Income Credit.

The new hiring credit may only be claimed on a timely-filed, original return, and is subject to a competition process, based on the limited availability of funds within a respective fiscal year set by the newly-created California Competes Tax Credit Committee, which will be responsible for establishing limits on the aggregate amount of credits available to taxpayers. Businesses seeking to claim these credits must request a tentative credit reservation with the Franchise Tax Board within 30 days of the employee’s date of hire, and must submit an annual certification of employment for each full-time employee to remain eligible for the credit during the 60-month credit period.  The credit may be recaptured if the employer terminates the employment relationship within three years of hire, absent a statutorily enumerated exception.

Qualified employees hired before December 31, 2013, may be vouchered and will continue to generate credits for the five year period.  The carry forward has been limited to 10 years.  There is much clean up work going on which is slated for late summer.

CA Legislature Votes to Eliminate EZ

Monday, July 8th, 2013 | Enterprise Zones, Tax News


Under the disguise of reform, the CA legislature voted to eliminate the EZ program that has existed since 1984.  In it place is a greatly modified EZ program that has yet to be fully explained and will be subject to significant revision before it is enacted.

Senate Votes Tomorrow On Brown’s Proposal To Eliminate Enterprise Zones

Monday, June 24th, 2013 | Enterprise Zones, Legislation, Tax News


Governor Brown is scrambling for votes ahead of tomorrow’s vote on AB93 which eliminates EZs in lieu of….nothing really.  Click here to indicate opposition to the bill.

Budget Deal Leaves Enterprise Zones Alone

Tuesday, June 11th, 2013 | Enterprise Zones, Legislation, Tax News


From today’s Sacramento Bee regarding whether the budget includes any changes to the Enterprise Zone program:

The budget agreement did not resolve Brown’s proposal to eliminate the state enterprise zone program and to use the money instead for sales tax exemptions for manufacturing and biotech research companies.

Brown said today that the enterprise zone negotiation remains “out in front of us.” The issue would not have to be resolved before a budget vote this week.

Governor’s Go-”Away” Biz Tees Up Its “New and Improved” Enterprise Zone Tax Credit

Tuesday, June 4th, 2013 | Enterprise Zones, Legislation, Tax News


Today, the Governor’s Go “Away” Biz think tank offered up a version of its new and improved tax credit.  The Governor proposes to eliminate the current Enterprise Zone program and replace it with a program so chock full of limitations and strings attached that surely the only person smiling today is Rick Perry.  Here is a link to the proposed new credit.  Here is a link to the short version of what the Go-”Away” Biz credit actually provides.

Go Biz Pushing New Credit

Sunday, June 2nd, 2013 | Enterprise Zones, Legislation, Tax News


Go Biz is touting the benefits of the Governor’s proposed new tax breaks.  Here is a bit of detail about how the new credit will affect the current EZ:

“The Governor’s Office of Business and Economic Development today issued an informational briefing today “NEW TOOLS FOR A NEW ECONOMY” on the Governor’s newly proposed business incentives. The incentives, part of Governor Brown’s revised May Budget, include a sales and use tax exemption for manufacturing equipment and biotech R&D, a long-term unemployed tax credit for areas of high unemployment and poverty, and a recruitment and retention incentive to attract new companies to California and expand existing companies.  Also included is a side by side comparison of the proposed program compared to current enterprise zone incentives. GO-Biz Deputy Director for Business Investment Services Leslie McBride pointed to the wider application of the proposed incentives as an overall benefit.

“Two of the three incentives are statewide,” said McBride, “meaning all of California gets to be an Enterprise Zone.”

The new programs would redirect roughly $750 million annually from the inefficient Enterprise Zone program to statewide business incentive programs. While exact details are still being developed and are subject to legislative approval, all three programs are proposed to start in the first quarter of 2014. Current earned Enterprise Zone credits would stay in place for 5 years. Additional state economic incentives such as the Employment Training Panel, the Research and Development tax credit will continue to be available to businesses – even in combination with the new incentives.

5 of 37 “Job Killer” bills make it out of Session

Sunday, June 2nd, 2013 | Enterprise Zones, Legislation, Tax News


The Sacramento Bee reports that despite a heavy Democratic majority, only 5 bills labeled by the California Chamber of Commerce as “job killers” made it through the legislative session.  Only one of them deals with tax credits, Senate Bill 365 by Sen. Lois Wolk, D-Davis, to sunset business tax breaks.

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