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 17053.36-2 - Definitions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Definitions -- (See Regulation 17053.36-0 for Table of
						Contents.)
For purposes of Regulations 17053.36-1 through
						17053.36-9, inclusive, the following definitions shall apply:
(a) Joint Strike Fighter. The term "Joint
					 Strike Fighter" shall mean the next-generation air combat strike aircraft
					 developed and produced under the Joint Strike Fighter program of the United
					 States government.
(b) Initial
					 Contract or Initial Subcontract. The term "initial contract" shall mean the
					 contract awarded by the United States government to a prime contractor for any
					 phase, including the Engineering and Manufacturing Development Phase, of the
					 Joint Strike Fighter Program to produce the Joint Strike Fighter. The term
					 "initial subcontract" shall mean a contract between a prime contractor and any
					 other contractor, or between two contractors where one of those contractors is
					 under contract with the prime contractor or where the prime contractor or a
					 contractor under contract with the prime contractor has consented to the
					 contract in writing, to produce a product that is designed to be physically
					 attached to or installed in a Joint Strike Fighter under the initial
					 contract.
(c) Joint Strike Fighter
					 Program. The term "Joint Strike Fighter Program" shall mean the multiservice,
					 multinational project conducted by the United States government to develop and
					 produce the next generation of air combat strike aircraft.
(d) Manufactured. The term "manufactured"
					 shall mean the process of developing, converting or conditioning stock in trade
					 or other property properly includible in the inventory of the taxpayer for
					 ultimate use in a Joint Strike Fighter by changing the form, composition,
					 quality, or character of the property, and includes any improvements to
					 property that result in a greater service life or greater functionality than
					 that of the original property. The term "manufactured" shall include the
					 design, engineering and testing activities necessary to develop the property.
					 Property shall be treated as having a greater service life if such property can
					 be used for a longer period than such property could have been used prior to
					 the conversion or conditioning of such property. Property shall be treated as
					 having greater functionality if it has been improved in such a manner that it
					 can be used to perform new or different functions.
(e) Product for Ultimate Use in a Joint
					 Strike Fighter. The term "product for ultimate use in a Joint Strike Fighter"
					 shall mean a product that is properly treated as inventory in the hands of the
					 taxpayer and is designed to be physically installed in or attached to a Joint
					 Strike Fighter. The term "product for ultimate use in a Joint Strike Fighter"
					 shall not include any product that is not designed to form a part of the Joint
					 Strike Fighter. For this purpose, the term "product" shall include any studies,
					 drawings, pilot model or prototype used in connection with the development of
					 the product. For this purpose, the term "inventory" includes any property which
					 is required to be included in the qualified taxpayer's inventory costs under
					 Internal Revenue Code section
					 263 A or that is described in
					 Internal Revenue Code section
					 1221(1).
1. New
						section filed 1-23-2003; operative 2-22-2003 (Register 2003, No.
						4).
Note: Authority cited: Section
						  19503,
						  Revenue and Taxation Code. Reference: Section
						  17053.36,
						  Revenue and Taxation Code.