Cal. Code Regs. Tit. 18, §§ 23637-0

Current through Register 2024 Notice Reg. No. 40, October 4, 2024

Section 23637-0 - Table of Contents

Table of Contents -- Regulation Sections 23637-1 through 23637-11

Section 23637-1.The Joint Strike Fighter (JSF) Property Credit.

(a) In General

(b) Cross References

(c) General References

Section 23637-2.Definitions.

(a) Capitalized Labor

(b) Fabricating

(c) Joint Strike Fighter

(d) Initial Contract or Initial Subcontract

(e) Joint Strike Fighter Program

(f) Manufacturing

(g) Packaging

(h) Placed in Service

(i) Product For Ultimate Use in a Joint Strike Fighter

(j) Primarily

(k) Process

(l) Processing

(m) Qualified Activities

Section 23637-3.Qualified Taxpayer.

(a) In General

(b) Pass-Through Entities

Section 23637-4.Qualified Costs.

(a) In General

(b) California Sales and Use Tax Payment Requirement

(c) Capitalization Requirement

(d) Capitalized Labor Costs

(1) Capitalized Labor Costs Under Third-Party Contracts

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

(1) Allocation of Costs Actually Paid Prior to January 1, 2001

(2) Binding Contract Bid Amount Reduced by Credit

(3) Binding Contracts

(4) Successor or Replacement Contracts

(5) Option Contracts

(6) Conditional Contracts

Section 23637-5.Qualified Property.

(a) In General

(b) General Requirements for Qualified Property

(1) Tangible Personal Property

(2) Section 1245(a)(3)(A) Property

(3) Used to Manufacture a Product for Ultimate Use in a Joint Strike Fighter

(4) Primarily Used in Qualified Activities

(c) Specifically Excluded Property

(1) Furniture

(2) Facilities Used for Warehousing Purposes

(3) Inventory

(4) Equipment Used to Store Finished Products

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

(d) Movement of Used Property Into This State

Section 23637-6.Leasing.

(a) In General

(1) Lessor Not Entitled to JSF Property Credit

(2) Binding Contract Rules Applicable to Leases

(3) Special Rules Applicable to All Leasing Transactions

(A) Placed in Service

(B) Bid Amount Reduced By Credit

(b) Operating Leases

(1) In General

(2) Applicable Requirements

(A) Lessee Must Be a Qualified Taxpayer

(B) Use of Property in Qualified Activities

(C) Sales or Use Tax Payment Requirement

(D) Qualified Costs

(E) Chargeable to Capital Account

(3) Amount of JSF Property Credit Lessee May Claim

(A) Qualified Cost to Lessor

(B) Exception For Capitalized Labor

(4) Special Rules for Operating Leases

(A) Limitation on Qualified Costs

(B) Reduction in Qualified Cost to Lessor

(C) Qualified Cost to Successor Lessor

(D) 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 Qualified Activities

(C) Sales or Use Tax Payment Requirement

(D) Qualified Costs

(E) Chargeable to Capital Account

(3) Amount of JSF Property Credit Lessee May Claim

Section 23637-7.JSF Contract Bidding.

(a) In General

(b) Bid

(c) JSF Property Credit Reflected Within the Bid

(d) JSF Property Credit Allowable

(e) Pass-Through Entities

(f) Copies Provided to Franchise Tax Board

Section 23637-8.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) Adjustment of Carryforwards when Disposition Occurs

(f) Recapture of JSF Property Credit Allowed to Pass-Through Entities

(1) Partnerships and Partners

(2) S Corporations and Shareholders

(A) Corporate Level Recapture

(B) Pass-through of JSF Property Credit Recapture Amount to Shareholders

Section 23637-9.JSF Property Credit Carryforwards.

(a) In General

(b) Carryforwards for Pass-Through Entities

(c) Carryforwards Permitted After Sunset

Section 23637-10.Recordkeeping Requirements.

(a) In General

(b) Books and Records

(c) Affidavit Regarding Sales and Use Tax

(d) Written Statement by Lessor to Lessee

Section 23637-11.Miscellaneous Provisions.

(a) Effective Dates of the JSF Property Credit

(b) Manufacturers' Investment Credit (MIC)

(c) Enterprise Zone Sales or Use Tax Credit

Cal. Code Regs. Tit. 18, §§ 23637-0

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 23637, Revenue and Taxation Code.

1. New section filed 1-23-2003; operative 2-22-2003 (Register 2003, No. 4).