The California Governor's Office of Business and Economic Development (GO-Biz) adopted emergency regulations implementing the new California Competes tax credit program. The regulations apply from February 20 through August 20 of 2014.
The regulations, require the Franchise Tax Board to review the books and records of businesses to ensure compliance with the tax credit agreement; however, the review is discretionary for small businesses. The reviews are not tax return audits, but they do not prevent the board from auditing any issue in any taxable year, including taxable years covered by the agreement.
In addition, the regulations require GO-Biz to negotiate with taxpayers regarding whether the credit will be provided in full, or in installments based on successful completion of milestones such as hiring the required number of full-time employees and providing certain employee benefits.
The application period for the credit will be listed on the GO-Biz website prior to each new fiscal year.
*Continue the discussion on LinkedIn: Will the mandatory Franchise Tax Board review process affect a business’s decision to seek tax credits under this program?
For more information about the California Competes tax credit program, check out Bloomberg BNA’s Credits and Incentives Portfolios.
In other developments . . .
Michigan recently amended its addback calculation for certain credit amounts claimed under the Michigan Business Tax and the Michigan Single Business Tax for tangible assets sold, transferred out of Michigan, or otherwise disposed of by the taxpayer, according to a Bloomberg BNA Weekly State Tax Reportarticle.
By: Kathleen Caggiano
Follow Kathleen on Twitter at: @katcaggiano .
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