Businesses in California face numerous tax changes in 2014admin
Across California, businesses in a variety of industries are experiencing changes to tax laws that may negatively affect their bottom lines. Here are some of the tax challenges they face.
March 25, 2014 /24-7PressRelease/ — On a quarterly basis, the California Board of Equalization publishes a list of those companies in the state who have the largest tax delinquencies in an attempt to shame them into paying what they owe. This month, two Long Beach businesses made the top 500 list, owing nearly $1.4 million combined in back taxes.
Since the Board of Equalization began publishing their lists, many California businesses are attempting to settle their accounts but the state has a long way to go to collect the nearly $515 million owed. The California lists do not mention the tax debt problems the businesses may have with the Internal Revenue Service (IRS).
Tax troubles rarely begin with a simple failure to pay what is owed. Often, a misunderstanding of allowable business deductions, credits or timing on payments can snare unsuspecting businesses. California businesses should be aware of tax law changes that may affect their bottom line this year.
Expiration of extenders
Many small businesses in California are bemoaning the expiration of “extenders.” Extenders are business expenditure write-offs that are popular among businesses across the nation. The extenders are important for many small companies as they allow certain deductions or credits for such items as:
– Capital expenditures
– Qualified research and development
– Certain new employees
U.S. Congress let the nearly 50 IRS provisions expire at the end of 2013. Typically, it renews the extenders and applies them retroactively, as it did in 2013 for that year and the prior year. However, it did not renew them for this year as Congress intends to revamp corporate tax rates and overhaul the corporate taxation system. However, progress is slow and, in the meantime, business owners, relying on past tax deductions, may inadvertently find themselves subject to audits or involved in tax litigation.
Oil extraction tax
Last month, California Senator Noreen Evans started promoting new legislations that would impose a tax on any oil pumped from the ground in California. Estimates project that the proposed 9.5 percent extraction tax will raise $2 billion for state coffers. In the past, similar bills have been shot down and this proposal is also experiencing marked opposition, according to the Los Angeles Times. Opponents assert that Californian oil and gas production will be priced out of the competitive national market, affecting job rates in the poorest sections of the state.Television and film tax credit program
A number of California businesses rallied earlier this month in support of proposed legislation that would renew and expand the existing California Film and Tax Credit Program. The bill is seen as a critical step in bolstering film and television production rates in California as it increasingly competes with other states that offer attractive tax incentives. Numerous provisions within the proposed bill offer incentives to existing as well as new television shows in the state and create opportunities for more local jobs in both the TV and film industries.
Seek professional tax assistance
The above changes are merely a few of many that affect business owners in California. If you own or operate an entity in the state, consult an experienced tax attorney for your business needs and do not rely your memory of past rules and regulations to keep you out of tax trouble.
Article provided by Brown, PC
Visit us at www.browntaxla.com
Posted: March 25th, 2014 under 24/7 PRESS RELEASE.