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IPFS News Link • TAXES: State

California: Remember the Taxes You Didn’t Owe? Surprise!

• by Wendy McElroy (Future of Freedom Foundation)

Shortly before the Christmas holidays and oh so quietly, the California Franchise Tax Board (FTB) rescinded a tax break that dated back to 1993. The Qualified Small Business Stock (QSBS) exclusion allowed small businesses and investors who met certain conditions to exclude or to defer 50 percent of the profits of sold stock from their personal income taxes. The incentive was intended to lure startup companies of under $50 million into the state.

Now those who were ensnared have not only lost that tax break for the future; many are also being taxed retroactively back to 2008. Plus interest. Plus possible penalties.