U.S. Chamber of Commerce
California’s Franchise Tax Board is apparently unfamiliar with the old playground rule of “no take backs.”
In 2008, the state government promised big tax breaks and incentives for specific small business startups. Approximately 2,000 investors and startups took the state up on its generous offer and received in return tax breaks to the tune of about $120 million over the last five years.
But in December, a court ruled the practice unconstitutional. And now, like a petulant child on a school playground, the state’s Franchise Tax Board wants the money back. Some businesses will face a retroactive tax bill of as much as $200,000.
Sen. Ted Lieu (D-Torrance) is taking on the schoolyard bullies, and has introduced a bill aimed at preventing investors from losing millions. “Our goal is to fix this problem. Since it can’t be done administratively, we’ll fix it legislatively. Californians planned and based their actions on the language of the law as it existed. Going backward in time and changing the rules innocent taxpayers relied upon violates the very essence of the rule of law.”
As we used to say on the playground: oooooh, burn.
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