The Franchise Tax Board (FTB) today announced that effective Monday, August 3, it will change its call center hours of operation to 8 a.m. to 5 p.m., Monday through Friday, except for state holidays.

Currently, general taxpayer assistance phones lines are open from 7 a.m. to 6 p.m. The change stems from budget constraints.

Taxpayers with general questions can call FTB at 800.852.5711. FTB responds to more than 2.6 million taxpayer calls per year. Taxpayers can also access FTB’s website for state tax information, forms, e-services, and answers to frequently asked tax questions at ftb.ca.gov.

On May 7, 2009, the California Court of Appeals ruled in the Dichon case that the burden is on the FTB if they want to audit behind a voucher. The voucher itself is considered prima facie evidence that the employee is qualified. James Dudley, who took over for Frank Luera at the FTB, stated that the FTB is appealing the Dichon case to the Supreme Court. For now, Dichon is the law of the land, but stay tuned to see if the Supremes decide to take it up.

For previous coverage on the case, please click here.

Jim Costa, the congressman representing the Fresno area, announced that $1.7 million dollars has been awarded to the Fresno Area Hispanic Foundation in order to help stimulate the local economy. Specifically the funds will help to expand a local commercial building which assists local businesses to take advantage of the Fresno enterprise zone. The US Department of Commerce was the government division that designated the funds. “Small businesses are the backbone to the City of Fresno’s local economy,” Costa said. “This funding will be a shot-in-the-arm to our enterprise zone, encouraging entrepreneurship and furthering the important work of the Fresno Area Hispanic Foundation”

From micro-loans to business advice, this expanded location will help local members of the hispanic community to develop new businesses as well as enhance pre-exisiting enterprises. Estimates currently suggest that 900 new jobs will be created by this project.

With the need for economic development, certain regions in California are strongly pushing for Enterprise Zone designation.  Most recently, Bruce Stenslie and Steve Kinney, of the Ventura County Star, had this to say about the value of the California Enterprise Zone program:

To understand why cities seek an enterprise-zone designation, and to evaluate its merits, it’s important to understand how it works. Enterprise zones are tied to areas that suffer higher-than-average unemployment and poverty. Businesses within an enterprise zone may receive tax credits for hiring new workers, but only for workers who reside within the enterprise zone or who face serious barriers to employment. The benefits for Oxnard are unique. We have high levels of joblessness in neighborhoods near the city’s industrial and commercial districts, but a disconnect between employers and residents. An enterprise-zone designation will place a premium on the skills developed by workers in the city, by rewarding business with a tax incentive for training and hiring local workers.

If you have a business in an Enterprise Zone, please contact us directly for a free consultation to see the tax credits that are available to you.

Below is a news release from the Franchise Tax Board:

(Sacramento) – The Franchise Tax Board (FTB) announced it accepts California registered warrants (IOUs) as payment of current and past due personal and corporate tax obligations.

To pay a tax liability with an IOU, endorse the IOU on the reverse side with the phrase “Pay to the order of Franchise Tax Board” and your signature then mail it with the tax bill or estimated tax voucher. By law, FTB cannot deposit the IOU until it is payable, but FTB will credit the taxpayer’s account on the date the IOU is received to stop the accrual of interest. If the IOU is not sufficient to pay the outstanding balance, taxpayers should send an additional payment for the difference. Otherwise, the taxpayer will receive a bill reflecting the new balance due.

On October 2, 2009, FTB will redeem the IOUs it has received with the Treasurer. If a taxpayer submits an IOU after October 2, FTB will deposit it and then credit the account with the face value of the warrant plus applicable interest.

Taxpayers wanting to receive the accrued interest from their IOUs must hold them until October 2, 2009, the date IOUs are redeemable.

A registered warrant is a “promise to pay,” with interest, that is issued by the State when there is not enough cash to meet all of the State’s payment obligations. If there is sufficient cash available, registered warrants will be paid by the State Treasurer on October 2, 2009. For more information, see the Treasurer’s website STO Registered Warrant Informationor the Controller’s website California State Controller’s Office: Frequently Asked Questions about Registered Warrants (IOUs).

Rebecca Matt from the HCD announced that several zones now have final TEAs including Kings County, LA East, Yuba Sutter and Siskiyou County. The HCD is close to finalizing Richmond, Delano, San Joaquin, Santa Ana, Merced, Oakland and West Sacramento. This will allow these newly designated Enterprise Zones to qualify employees for the credit.

The law firm Skin Gump Strauss Hauer & Feld LLP on behalf of Charles Young have filed suit challenging the two-thirds vote on tax issue currently being debated in California.  In 1978, Proposition 13 was voted on by the public and passed, cutting property taxes and requiring a two-thirds majority in the legislature to raise taxes – it is this proposition that is currently being discussed.

With approximately $1 billion dollar tax shortfall, the majority of local representatives are pushing for increased taxation, however with the current makeup of the legislature, a two-thirds majority looks to be doubtful.

Despite the fact that several republican represantatives have gone against party lines and voted for increased taxes, the majority of conservatives, including Governor Schwarzenegger suggest that state spending cuts and not increased taxation, is the key to stabilizing California’s economy.

Salinas Valley is moving forward with the city’s Enterprise Zone efforts.  From increasing employment opportunities to making the region more attractive to large businesses, the EZ program can help make the entire process as efficient as possible.

Andrew Myrick, the Salinas Valley Enterprise Zone manager wrote the following:

Professor Charles Swenson from the University of Southern California Marshall School of Business confirms that enterprise zones work. His research found that California’s enterprise zone program decreases unemployment rates, boosts wage, salary and household incomes and decreases poverty rates. Another study by the California Department of Housing and Community Development found that poverty rates and unemployment declined and incomes increased more in enterprise zones than in the rest of the state.

Yesterday was the CAEZ quarterly meeting where a host of new faces were introduced to the EZ world. First, replacing Frank Luera at HCD will be Tom Bettencourt and John Nunn. Both men seem to be well suited for the role. Replacing Jeanne Harriman will be Jayme Mora and James Dudley. They have years of Enterprise Zone experience under their belt and seemed very inviting and helpful. James was even brave enough to give the group his email address. We look forward to a very supportive and beneficial relationship with both groups.

Toni Symonds, chief consultant for California State Assembly Committee on Jobs, Economic Development, and the Economy briefed the group regarding AB 1139. Looks like there will be a public hearing on August 18, 2009 and the bill will likely reach the Committee on January 5, 2010. The discussion will focus on what is the purpose and goals of the EZ and whether the program achieves these goals.

Also, AB 1554, a little known bill, should be garnering support by the CAEZ. AB 1554 aligns the reporting period with the period that HCD was actually administering the program. There will be much more to come, especially regarding AB 1139.

Last, the CAEZ annual conference is coming up on November 4-6 in Fresno.

As California companies continue to experience the benefits of the California Enterprise Zone program, other states from the around the nation are re-evaluating their own corporate tax break programs.  The latest state to review the program is Colorado.  Miles Moffeit, from the Denver Post reports:

“Colorado lawmakers started shining a flashlight into the dense state tax code earlier this year, looking for special-interest loopholes they could plug to prevent the budget crisis from deepening.  They found dozens of industry tax breaks that could potentially be nixed or scaled back, according to a report circulating at the Capitol.  Some are shallow pools of potential revenue, such as exemptions on bull-semen sales — estimated to cost the state $3.2 million this year. Others are deeper, such as $600 million worth of breaks expected to go to manufacturing companies for the purchase of component parts.”

The key that these states needs to be reminded of is the total importance of attracting and retaining businesses.  New companies migrating to a state not only creates jobs and tax sales revenue, it also benefits the economic ecosystem of the region.  Real estate, retail sales and the service industries are simply a few of the sectors positively effected by new businesses moving into a city/state.