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CA Wants To Be Repaid For $120M In Tax Breaks

From CBS News Sacramento affiliate, KOVR:

California Wants Small-Business Owners To Pay Back $120 Million In Tax Breaks

August 19, 2013

SACRAMENTO (CBS13) — Small-business investors in California were promised big breaks five years ago, but now they’re being told to pay up, instead after a court ruling.

After following the law, many of them are getting hit with tax bills as high as $250,000.

What ‘War On Small Business’?

“When we make a promise, we have to uphold it,” said Sen. Ted Lieu, D-Redondo Beach.

But that is not what the state government appears to be doing. Small-business owners are getting hefty tax breaks for tax credits they already got five years ago.

“They relied on California law as it was written, that they would get a tax break if they invested in certain kinds of businesses,” Lieu said.

How much you want to be these were breaks for investing in ‘green technology’ and other leftist causes.

But a court ruled in December that practice by the state was unconstitutional. Now, the Franchise Tax Board wants its money.

And it’s killing small businesses, says Ken DeVore, with the National Federation of Independent Businesses.

“It sends a message that you can’t trust government. If you comply in good faith with the rules, they can go back and penalize you.”

There is a lesson in here for all of us. Never trust the government. What any government gives, it can easily take away.

It’s estimated that 2,000 small-business investors will have to pay these retroactive taxes. If the senator’s bill doesn’t pass, they’ll be out up to $120 million.

“A lot of them don’t have that money anymore. Its been reinvested,” DeVore said.

Lieu says it’s not as if the state is counting on the case. The $120 million would be a surprise windfall for the state.

“They obviously can’t go backwards 5 years in time and change their investment or change what they did.” he said. “They are stuck with what they did and its unfair to penalize them.”

Investors who could be hit by the retroactive taxes did not want to go on camera, fearing they would become an easy target for the Franchise Tax Board…

They are wise.

This article was posted by Steve on Wednesday, August 21st, 2013. Comments are currently closed.

2 Responses to “CA Wants To Be Repaid For $120M In Tax Breaks”

  1. GetBackJack says:

    Ricky Jay explains Elected Representatives and Taxation


  2. bousquem25 says:

    Go figure that California would pull this crap. They’ll go back on deals and demand more taxes retroactively from businesses that followed the law but now their courts don’t like it and the state needs the money so the businesses get royally screwed over.

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