California Court of Appeal Holds that Expensed Assets Do Not Qualify for Enterprise Zone Sales and Use Tax Credit
In its recent decision Taiheiyo Cement U.S.A., Inc. v. Franchise Tax Board, 2012 Cal. App. LEXIS 282 (Mar. 13, 2012), the California Court of Appeal for the Second District held that expensed assets do not qualify for the Enterprise Zone Sales and Use Tax (“EZSUT”) credit under California Revenue and Taxation Code section 23612.2 (“Section 23612.2”). The taxpayer, Taiheiyo Cement U.S.A., Inc., is a manufacturer of hydraulic cement with a manufacturing plant in Colton, California. Colton is located within an economically depressed area that has been designated as an “enterprise zone” by the legislature. The EZSUT credit is one of several tax incentives that is available to businesses located within an enterprise zone. The EZSUT provides for a tax credit against California income or franchise tax in an amount equal to the sales or use tax paid on “qualified property.”
If you have any questions regarding the contents of this newsletter, please contact the following attorneys in the firm’s State and Local Tax Practice Group.
Text WSTopics to 21534 from your mobile phone to receive a message with a video about Winston & Strawn LLP. Includes link that functions only if your phone has internet access. Msg&Data rates may apply. Text STOP to 21534 to stop (conf. Msg will be sent) or email us. Text HELP to 21534 for help.
Attorney advertising materials.
These materials have been prepared by Winston & Strawn LLP for informational purposes only and are not legal advice. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code. Receipt of this information does not create an attorney-client relationship. No reproduction or redistribution without written permission of Winston & Strawn LLP.
Along with this briefing, a library of all the Winston & Strawn LLP briefings published to date can be accessed by visiting the Publications Library section of Winston & Strawn LLP's Web site www.winston.com.