California Code of Regulations › Title 18 - Public Revenues › Division 3 - Franchise Tax Board › Chapter 2.5 - Personal Income Tax (Taxable Years Beginning After 12-31-54) › Subchapter 2 - Imposition of Tax › Article 1 - Joint Strike Fighter Wage Credit › Section 17053.37-1 - The Joint Strike Fighter (JSF) Property Credit

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The Joint Strike Fighter (JSF) Property Credit -- (See
						Regulation
						17053.37-0
						for Table of Contents.)
(a) In
					 General. The Joint Strike Fighter (JSF) Property Credit is allowed to any
					 qualified taxpayer in an amount equal to ten percent (10%) of any qualified
					 costs paid or incurred on or after January 1, 2001, and before January 1, 2006,
					 for qualified property that is placed in service in this state and used by a
					 qualified taxpayer in qualified activities to manufacture a product for
					 ultimate use in a Joint Strike Fighter. A qualified taxpayer who leases
					 qualified property for use in qualified activities of the qualified taxpayer
					 may also claim the JSF Property Credit. Qualified property may be either new or
					 used and must be placed in service in this state and used by a qualified
					 taxpayer in qualified activities for more than one year to avoid recapture of
					 the JSF Property Credit. The basis of any qualified property for which the JSF
					 Property Credit is claimed is not required to be reduced by the amount of any
					 JSF Property Credit claimed.
(b)
					 Cross References. Regulation
					 17053.37-2
					 contains definitions applicable to Regulations 17053.37-1 through 17053.37-11,
					 inclusive, Regulation 17053.37-3 contains rules relating to qualified
					 taxpayers, Regulation 17053.37-4 contains rules relating to qualified costs,
					 Regulation 17053.37-5 contains rules relating to qualified property, Regulation
					 17053.37-6 contains rules applicable to leases of qualified property by
					 qualified taxpayers, Regulation 17053.37-7 contains rules relating to contract
					 bidding, Regulation 17053.37-8 contains recapture rules, Regulation 17053.37-9
					 contains rules relating to carryforwards, Regulation 17053.37-10 contains
					 general recordkeeping requirements, and Regulation 17053.37-11 contains other
					 miscellaneous provisions. For rules relating to the JSF Property Credit allowed
					 to taxpayers under the Personal Income Tax Law, see Revenue and Taxation Code
					 section 17053.37 and the regulations
					 thereunder.
(c) General References.
					 For purposes of Regulations 17053.37-1 through 17053.37-11, inclusive, the
					 following general references shall apply:
(1)
					 All citations to the Revenue and Taxation Code are to the California Revenue
					 and Taxation Code.
(2) All
					 citations to the Internal Revenue Code are to the Internal Revenue Code of
					 1986, as amended.
(3) The credits
					 provided for in Revenue and Taxation Code sections
					 17053.37 and
					 23637
					 shall be collectively referred to as the "Joint Strike Fighter Property Credit"
					 or the "JSF Property Credit."
(4)
					 Any reference to sales or use tax shall mean California sales or use tax
					 imposed under Part 1 (commencing with section
					 6001) of Division 2 of the Revenue
					 and Taxation Code. Any discussion of California sales and use tax law in
					 Regulations
					 17053.37-1
					 through 17053.37-11, inclusive, is based upon such law as in effect on the date
					 these regulations become effective, and is generally intended to restate the
					 requirements set forth in Revenue and Taxation Code section
					 17053.37 and to be illustrative
					 of, but have no effect on, the California sales and use tax law and the
					 regulations thereunder. All examples which contain references to an amount of
					 California sales or use tax shall be at an assumed hypothetical sales or use
					 tax rate of eight percent (8%).
(5)
					 Unless otherwise provided, any reference to capitalized labor costs in the
					 examples in this regulation shall mean labor costs that are direct costs, as
					 that term is used in Internal Revenue Code section
					 263 A and defined in the
					 regulations thereunder, that can be identified or associated with and are
					 properly allocable to construction or modification of qualified
					 property.
(6) Unless otherwise
					 provided, any reference to qualified property in the examples in this
					 regulation shall assume that the qualified property is being used primarily to
					 manufacture a product for ultimate use in a Joint Strike Fighter. In addition,
					 unless otherwise provided, all examples in this regulation shall assume that
					 the qualified taxpayer's bid to manufacture property for ultimate use in a
					 Joint Strike Fighter reflected a reduction in the amount of the Joint Strike
					 Fighter credit allowable as provided in Revenue and Taxation Code section
					 17053.37(i)(2)
					 and Regulation 17053.37-7.