Of course there is an enormous uproar and battle over this ruling! Senator Ted Lieu (a Redondo Beach Democrat) said, “When we make a promise, we have to uphold it.” He went on to say that these people relied on the law the way it was written, which was they would receive a tax break if they invested in certain types of businesses. Unfortunately, now the Franchise Tax Board feels that they are due the money that was previously granted in tax deductions. Senator Lieu is in favor of passing a bill that will defend these small business investors.
Some feel that this new court ruling is potentially very damaging to small businesses. Ken DeVore, with the Federation of Independent Businesses, believes that people will naturally become skeptical of government if they comply with existing laws only to be penalized down the road. If this new ruling is upheld, it is calculated that 2,000 small business investors will have to pay back taxes totaling more than $120 million. The saving grace will be if Senator Lieu’s bill passes. As of this date, the Franchise Tax Board has had no comment on the matter.
If your business is seeking business tax or business accounting solutions, our experienced professionals can provide you with the expertise you are looking for. To learn more about our full range of business tax and accounting services, visit us today at http://businesstaxpreparation.com/. Contact us by email at info@businesstaxpreparation.com or by phone at (866) 676-9417 or by to receive a free, no obligation consultation.