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 17053.49-2 - Definitions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(See Regulation Section
						17053.49-0 for Table of
						Contents.)
For purposes of Regulations 17053.49-1 through
						17053.49-11, inclusive, the following definitions shall apply:
(a)
Biopharmaceutical
					 Activities.
The term "biopharmaceutical activities" shall mean those
					 activities, including research, development, production, or provision of
					 biotechnology, which use organisms or materials derived from organisms, and
					 their cellular, subcellular or molecular components, in order to provide
					 pharmaceutical products or processes for human or animal therapeutics,
					 diagnostics, medical, pharmaceutical, nutritional, or other health-related
					 purposes. Biopharmaceutical activities use recombinant DNA technology and
					 living organisms to make commercial products, as opposed to pharmaceutical
					 activities which make use of chemical compounds to produce commercial
					 products.
(b)
Capitalized
					 Labor
. The term "capitalized labor" shall mean all direct costs of
					 labor that can be identified or associated with and are properly allocable to
					 the construction, modification, or installation of specific items of qualified
					 property. For this purpose, labor encompasses full-time and part-time
					 employees, as well as contract employees and independent contractors.
(1) Direct labor costs shall include all
					 elements of compensation, such as basic compensation, overtime pay, vacation
					 pay, holiday pay, sick leave pay (other than payments pursuant to a wage
					 continuation plan under Internal Revenue Code Section
					 105(d) as it
					 existed prior to its repeal in 1983), shift differential, payroll taxes, and
					 payments to a supplemental unemployment benefit plan, but shall not include any
					 indirect labor costs.
(2) Indirect
					 labor costs are costs that cannot be identified or associated with the
					 construction, modification, or installation of specific items of qualified
					 property. Indirect labor costs include, but are not limited to, training costs,
					 officers' compensation, pension and other related costs, and employee benefit
					 expenses (including payments pursuant to a wage continuation plan under
					 Internal Revenue Code Section
					 105(d) as it
					 existed prior to its repeal in 1983).
(3) In determining whether direct costs of
					 labor are properly allocable to the construction, modification, or installation
					 of a specific item of qualified property, the qualified taxpayer shall be
					 required to use the same method of allocation that is required to be used by
					 the qualified taxpayer for California income tax purposes under the uniform
					 capitalization allocation rules specified in Treasury Regulation Section
					 1.263 A-1 (as in effect on the
					 date Regulation 17053.49-2 is effective).