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Posts Tagged ‘california tax law’

Dicon Case Set For Oral Argument

Wednesday, February 1st, 2012 | Enterprise Zones, Legislation, Tax News


The California Supreme Court has scheduled oral argument in the Dicon case for Tuesday, March 6, 2012 at 9:00 a.m. in San Francisco.

Brown’s Budget Claims It Will Reform Enterprise Zone Program

Thursday, January 5th, 2012 | Enterprise Zones, Legislation, Tax News


Brown’s budget released today only hints at future reform measures to the Enterprise Zone program.  Perhaps after getting rid of RDAs, the unions are a bit gunshy about outwardly attempting getting rid of another vehicle that has anything to do with jobs while the economy struggles.  Here is what the budget said about Enterprise Zones:

“The resulting stability from a balanced budget will give businesses the certainty and the reassurance they need to invest in California. In addition, the Administration will propose legislation to reform the enterprise zone program and move to a mandatory single sales factor for apportioning multistate business income. Such changes will allow the state to afford investments in manufacturing, business incentives, and other tax relief.”

Governor Brown To Release His Budget Today

Thursday, January 5th, 2012 | Enterprise Zones, Legislation, Tax News


From the Sacramento Bee:

Gov. Jerry Brown will release his budget today at 2:30 p.m. after his administration mistakenly posted the document on the Department of Finance website.
The projected budget deficit is $9.2 billion through June 2013, according to sources who have seen the document.
The Democratic governor was scheduled to release the budget on Tuesday and dismissed reporters’ questions this morning about his plan, saying he wanted to be sure the media would show up for next week’s release.
The budget announcement will be streamed online live at his website.

Start Your Engines

Thursday, January 5th, 2012 | Enterprise Zones, Legislation, Tax News


Let the games begin.  Speaker Perez spoke out about the redevelopment case and what it means to Enterprise Zones.

“A second look will also no doubt be taken at the issue of local economic development in the wake of the California Supreme Court ruling that abolishes more than 400 local redevelopment agencies next month. Speaker Perez dismissed any notion that actual RDAs will be recreated by the Legislature; instead, he emphasized the need for ways to promote job creation and economic stimulus that doesn’t favor one region over another. And he suggested that the scrapping of RDAs could reignite his the effort of many Democrats to revise the state’s enterprise zone program.”

Read the full article.

Knitwear Company Spearheads Hope For New Ventures

Wednesday, January 4th, 2012 | Enterprise Zones, Featured Zone, Tax News


Tala Enterprise, a clothing maker that idled its denim line in China to bring its production back to the United States, officially opened a new knitwear manufacturing plant in the Coachella Valley Enterprise Zone.

“Assemblyman V. Manuel Pérez noted that the plant’s opening in the Coachella Valley Enterprise Zone comes at a critical time when California has frequently been labeled as unfriendly to business.

The very existence of this new business illustrates the importance of the state’s enterprise zones, which provide companies extra benefits to open, the Coachella Democrat said.”

Read the full article.

January’s Tax News

Wednesday, January 4th, 2012 | Enterprise Zones, Tax News


Here is the FTB’s Tax News for January.

Wounded Warriors WOTC

Thursday, December 1st, 2011 | Enterprise Zones, Tax News


The 2011 Heroes Act expands the WOTC to include:

  • Employers that hire veterans who have been looking for employment for more than six months may be eligible for a Returning Heroes Tax Credit of up to $5,600 per employee; employers that hire veterans who have been looking for employment for less than six months may be eligible for a credit of up to $2,400 per employee.
  • Employers that hire veterans with service-connected disabilities who have been looking for employment for more than six months may be eligible for a Wounded Warriors Tax Credit of up to $9,600 per employee.

 The credits apply to individuals who begin work after November 21, 2011 and on or before December 31, 2012. Keep in mind that the Heroes Act does not extend WOTC’s current December 31, 2011 sunset date for all other potentially elilgible WOTC participaants.

San Bernardino EZ Expands

Thursday, December 1st, 2011 | Enterprise Zones, Tax News


Effective November 8, 2011, the SBVEC has expanded by about 4 square miles.  Read the full story.

HCD Alert!

Tuesday, October 11th, 2011 | Enterprise Zones, Legislation, Tax News

Today the HCD issued this press release regarding implementation of new policies, including a moratorium on new zones.  The stated aim of the new policy memorandum is to make the EZ more accountable, efficient and consistent with the Governor’s May budget revise, i.e. a push by the unions to undercut the EZ program from within.  The legal analysis is beginning on the HCD’s claim that the law allows for “up to” 42 zones which if read in the correct light, means phasing out the program.   Read the memo here.

May Budget Revision Significantly Reduces Credit to Businesses

Monday, May 16th, 2011 | Enterprise Zones, Tax News


The Governor’s May budget revision significantly reduces the credit available to businesses.    Essentially, the credit will be reduced to $5,000 per employee.  Below is the section that discusses Enterprise Zones.

Reform Enterprise Zones — The purpose of enterprise zones is to encourage economic activity for particular geographic regions. However, there are two significant failings in the way the current tax incentives are structured. First, the Enterprise Zone hiring credit encourages the hiring of employees. It does not encourage the creation of new jobs. A business that lays off five employees and hires one at $50,000 per year, gets the same credit as a business that expands its number of employees and hires an employee at $50,000 per year. In fact, if the employee in the first case meets one of the vouchering criteria — they live in the area — and the employee in the second case meets none of the vouchering criteria, the firm in the first case will receive a credit while the employer in the second case will not. Enterprise Zone programs should reward employers for creating new jobs. Second, employers can benefit from Enterprise Zone credits even when it is demonstrable that the existence of the credit had nothing to do with the fact that they have hired a new employee. This is evident by the existence of a phenomenon referred to as “retro-vouchering”. “Retro-vouchering” typically occurs when a private tax consultant makes contact with a business located in the zone and offers that business their services, on a contingency-fee basis, to determine if any of the employees hired by this firm within the last several years qualifies to be vouchered for the hiring credit. When this happens, clearly the hiring firm did not act based on the Enterprise Zone hiring credit as they were not even aware of the credit when they did the hiring.

Instead of repealing state tax benefits for Enterprise Zones, the May Revision proposes to reform Enterprise Zone hiring credits so that credits are only available to firms which actually increase their level of employment. Taxpayers would be eligible for a $5,000 credit for each incremental full-time equivalent employee that they hire. These credits would only be allowed if claimed on the taxpayer’s original return. Additionally, the May Revision proposal would not allow any new vouchers to be granted for tax years prior to 2011 when the application for that voucher was made more than 30 days after the date that the employee first begins employment. Additionally, to ensure that credits are creating incentives for relatively profitable, tax-paying businesses, the Enterprise Zone credits will be limited to a five-year carry-forward period.

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