Cal. Code Regs. Tit. 18, §§ 17053.49-0

Current through Register 2024 Notice Reg. No. 44, November 1, 2024

Section 17053.49-0 - Table of Contents

Regulation Sections 17053.49-1 Through 17053.49-11

§ 17053.49-1. The Manufacturers' Investment Credit (MIC)

(a) In General

(b) MIC for Qualified Costs Paid or Incurred in 1994 Must Be Claimed on Qualified Taxpayer's Return for First Taxable Year Beginning on or After January 1, 1995

(c) Cross References

(d) General References

§ 17053.49-2. Definitions

(a) Biopharmaceutical Activities

(b) Capitalized Labor

(c) Fabricating

(d) Gross Receipts

(e) Manufacturing

(f) Net Assets

(g) Other Biotechnology Activities

(h) Packaging

(i) Placed in Service

(j) Pollution Control

(k) Primarily

(l) Process

(m) Processing

(n) Qualified Activity

(o) Recycling

(p) Refining

(q) Research and Development

(r) SIC Codes

(s) SIC Manual

(t) Small Business

(u) Total MIC

§ 17053.49-3. Qualified Taxpayer

(a) In General

(b) Business Activities Treated as an Establishment

(1) Establishment

A. Activities Conducted at Different Physical Locations

B. Activities Conducted at a Single Physical Location

(2) Auxiliary Establishments

A. Auxiliary Activities Conducted at a Different Physical Location than the Supported Establishment

B. Auxiliary Activities Conducted at the Same Physical Location as the Supported Establishment

(3) Operating Establishments

(4) Determining Whether Employment is Significant

(5) Activities Properly Assigned a SIC Code in an Non-Qualified Activity

§ 17053.49-4. Qualified Costs

(a) In General

(b) California Sales and Use Payment Requirement

(c) Capitalization Requirement

(d) Capitalized Labor Costs

(e) Qualified Costs Paid or Incurred Pursuant to Binding Contracts

(1) Allocation of Costs Actually Paid Prior to January 1, 1994

(2) Binding Contracts

(3) Successor or Replacement Contracts

(4) Option Contracts

(5) Conditional Contracts

§ 17053.49-5. Qualified Property

(a) In General

(b) General Requirements for Qualified Property

(1) Tangible Personal Property

(2) Section 1245(a) Property

(3) Used in an Activity Described in Division D of the SIC Manual

(4) Primarily Used in a Qualified Activity

(c) Special Purpose Buildings and Foundations

(1) Defined

(2) Exclusive Use for a Qualified Purpose

(3) Property Which is not a Special Purpose Building and Foundation

(4) Research Facilities

(d) Specifically Excluded Property

(1) Furniture

(2) Facilities Used for Warehousing Purposes

(3) Inventory

(4) Equipment Used in the Extraction Process

(5) Equipment Used to Store Finished Products

(6) Tangible Personal Property Used in Administration, General Management, or Marketing

(7) Property for Which the California Low-Emission Vehicle Credit is Claimed

(e) Movement of Used Property Into This State

(f) Property Used to Refine Reformulated or Oxygenated Gasoline

§ 17053.49-6. Leasing

(a) In General

(1) Lessor Not Entitled to MIC

(2) Binding Contract Rules Applicable to Leases

(3) Special Rule Applicable to All Leasing Transactions -- "Placed in Service"

(b) Operating Leases

(1) In General

(2) Applicable Requirements

A. Lessee Must Be a Qualified Taxpayer

B. Use of Property in a Qualified Activity

C. Sales or Use Tax Payment Requirement

D. Qualified Costs

E. Chargeable to Capital Account

(3) Amount of MIC Lessee May Claim

A. Qualified Cost to Lessor

B. Exception For Capitalized Labor

(4) Special Rules for Operating Leases

A. Transitional Election

B. Limitation on Qualified Costs

C. Reduction in Qualified Cost to Lessor

D. Qualified Cost to Successor Lessor

E. Acquisition by Lessee of Leased Property

(5) Sale-Leaseback Transactions

A. General Rule

B. Acquisition Sale and Leaseback

(6) Lessor Reporting Requirement

(c) Finance Leases

(1) In General

(2) Applicable Requirements

A. Lessee Must Be a Qualified Taxpayer

B. Use of Property in a Qualified Activity

C. Sales or Use Tax Payment Requirement

D. Qualified Costs

E. Chargeable to Capital Account

(3) Amount of MIC Lessee May Claim

§ 17053.49-7. Reserved

§ 17053.49-8. Recapture Rules

(a) In General

(b) Disposition

(c) Disposition of Qualified Property During the Taxable Year Placed in Service

(d) Disposition of Qualified Property During a Taxable Year Subsequent to the Taxable Year Placed In Service

(e) Adjust of Carryforwards when Disposition Occurs

(f) Recapture of MIC Allowed to Pass-Through Entities

(1) Partnerships and Partners

(2) S Corporations and Shareholders

A. Corporate Level Recapture

B. Pass-through of MIC Recapture to Shareholders

(g) Recapture of MIC Allowed in 1994 or 1995 But Deferred Until Qualified Taxpayer's First Taxable Year Beginning on or after January 1, 1995

§ 17053.49-9. MIC. Carryforwards

(a) In General

(b) Small Business Determination Made as of the Last Day of the Taxable Year for Which the MIC is Allowed

(c) Special Rule for MIC Allowed in 1994 or 1995 But Deferred Until Qualified Taxpayer's First Taxable Year Beginning on or after January 1, 1995

(d) Small Business

(e) Carryforwards for Pass-Through Entities

(f) Carryforwards Permitted After Sunset

§ 17053.49-10. Recordkeeping Requirements

(a) In General

(b) Books and Records

(c) Affidavit Regarding Sales and Use Tax

(d) Written Statement by Lessor to Lessee

§ 17053.49-11. Miscellaneous Provisions

(a) Operative Dates of the MIC

(b) Los Angeles Revitalization Zone (LARZ) Credits

(c) Election to Claim Sales and Use Tax Refund in lieu of MIC under Revenue and Taxation Code Section 6902.2

(d) Sales and Use Tax Exemption under Revenue and Taxation Code Section 6377

(e) Special Rule Applicable for Fiscal Year Taxpayers

Cal. Code Regs. Tit. 18, §§ 17053.49-0

1. New section filed 5-1-96; operative 5-31-96 (Register 96, No. 18).
2. Change without regulatory effect amending table of contents for section 17053.49-2 filed 8-14-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 33).

Note: Authority cited: Section 19503, Revenue and Taxation Code. Reference: Section 17053.49, Revenue and Taxation Code.