California Code of Regulations › Title 18 - Public Revenues › Division 3 - Franchise Tax Board › Chapter 3.5 - Bank and Corporation Tax › Subchapter 3 - Corporation Income Tax › Article 3 - Tax Credits › Section 23649-1 - The Manufacturers' Investment Credit

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(See Section
						23649-0 for Table of
						Contents.)
(a)
In
					 General.
The Manufacturers' Investment Credit (MIC) is allowed to any
					 qualified taxpayer in an amount equal to six percent (6%) of any qualified
					 costs paid or incurred on or after January 1, 1994, for qualified property that
					 is placed in service in this state. A qualified taxpayer who leases qualified
					 property for use in a qualified activity of the qualified taxpayer may also
					 claim the MIC. Qualified property may be either new or used and must be placed
					 in service in this state and used by a qualified taxpayer in a qualified
					 activity for more than one year to avoid recapture of the MIC. The basis of any
					 qualified property for which the MIC is claimed is not required to be reduced
					 by the amount of any MIC claimed.
(b)
MIC for Qualified Costs Paid or
					 Incurred in 1994 Must Be Claimed
on Qualified Taxpayer's
					 Return for First Income Year Beginning on or
After January 1,
					 1995
. In the case of any qualified costs paid or incurred on or after
					 January 1, 1994, and prior to the first income year of the qualified taxpayer
					 beginning on or after January 1, 1995, the MIC shall be treated as having been
					 allowed as of the date the qualified property is placed in service in this
					 state but shall not be claimed by the qualified taxpayer until the qualified
					 taxpayer files its California tax return for its first income year beginning on
					 or after January 1, 1995. No MIC shall be claimed on any return filed for any
					 income year commencing prior to the qualified taxpayer's first income year
					 beginning on or after January1, 1995. Fiscal year taxpayers who paid or
					 incurred qualified costs on or after January 1, 1994, and during the qualified
					 taxpayer's income year beginning in 1993, shall treat any such income year 1993
					 qualified costs as 1994 qualified costs to be claimed on the qualified
					 taxpayer's 1995 income year return.
(c)
Cross References
.
					 Regulation 23649-2 contains definitions applicable to Regulations 23649-1
					 through 23649-11, inclusive, Regulation 23649-3 contains rules relating to
					 qualified taxpayers, Regulation 23649-4 contains rules relating to qualified
					 costs, Regulation 23649-5 contains rules relating to qualified property,
					 Regulation 23649-6 contains rules applicable to leases of qualified property by
					 qualified taxpayers, Regulation 23649-7 is reserved, Regulation 23649-8
					 contains recapture rules, Regulation 23649-9 contains rules relating to
					 carryforwards, Regulation 23649-10 contains general recordkeeping requirements,
					 and Regulation 23649-11 contains other miscellaneous provisions. For rules
					 relating to the MIC allowed to taxpayers under the Personal Income Tax Law, see
					 Revenue and Taxation Code Section
					 17053.49
					 and the regulations thereunder.
(d)
General References
. For purposes of Regulations 23649-1
					 through 23649-11, 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.
(3) The credits provided for in Revenue and
					 Taxation Code Sections
					 17053.49
					 and
					 23649
					 shall be collectively referred to as the "Manufacturers' Investment Credit" or
					 the "MIC."
(4) Any reference to a
					 taxpayer's income year shall means the income year as defined in Revenue and
					 Taxation Code Section
					 23042.
(5) 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
					 23649-1
					 through 23649-11, 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
					 23649 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%).
(6) Any
					 reference to "Division D of the SIC Manual" shall mean that portion of the SIC
					 Manual which includes Codes 2011 through 3999, inclusive.