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Portal -----------

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Future expansion
This year our filing portal will be limited to taxpayers. 

We plan to expand it to tax practitioners and third party transmitters as early as 2002.

Contact your software provider to see if they're going to offer the portal option in 2002.

Look for updates about the filing portal and other E-government initiatives on our E-Government webpage located on the Internet at www.ftb.ca.gov/aboutftb/index  and in Tax News.
MIC -----------

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The MIC regulations provide several examples involving qualified property used in R&D activities for new product development and enhancement. For instance, California Code of Regulations, title 18, section 23649-5(b)(4), example 13, states:
W, a qualified taxpayer, manufactures engines for propeller airplanes in Long Beach. W constructs two engine test stands. The first engine test stand is used to evaluate design enhancements to the engines manufactured by W.

Assuming this first engine test stand is tangible personal property that is defined in IRC Section 1245(a)(3)(A), and assuming W's research activity is described in IRC Section 174 or the regulations thereunder, W may treat the first engine test stand as qualified property because it is used in R&D.

The second test stand is used to evaluate and test assembled engines prior to their shipment to customers. Assuming this second test stand is tangible personal property that is defined in IRC Section 1245(a)(3)(A), W may treat the second engine test stand as qualified property because it is used as part of W's manufacturing process.

In this example, the R&D activity relates to design enhancements to the product manufactured by the taxpayer. This is product-related R&D and to the extent described in IRC section 174, the R&D activity is a qualified activity for the MIC. Accordingly, assuming all of the other requirements for the MIC are satisfied, tangible personal property utilized in the R&D activity constitutes qualified property for purposes of the MIC.

 

January/February 2001

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