With a sagging economy, businesses located in the United States are utilizing every means possible to improve their bottom lines.? One under-used resource available to California-based corporations are California tax incentives.? You may be able to take advantage of a California tax credit, other tax incentives and even personal tax credits if your business operates in one of California’s Enterprise Zones. ?

The good news is that Enterprise Zones are located throughout the state of California.? These forty-two zones are in economically disadvantaged areas of the state, and by being classified as an Enterprise Zone, they qualify for a number of different corporate tax incentives. ?

One of these corporate tax credits can come in the form of hiring credits.? If you have what the state calls a “qualified” employee, your company in the Enterprise Zone may be eligible for up to $12,500 in California tax credit.??? Anywhere from fifteen percent to fifty percent of your worker base may make your business eligible for this California tax credit.? Employees that qualify include those who are veterans, physically or economically challenged, American Samoans, Pacific Islanders, Native Americans and those who have been recently laid off.? Another part of this California tax credit that many business owners are unaware of is that these corporate tax credits can go back for up to four years prior if amended returns are submitted, giving small and mid-sized business a much-needed financial gain of up to $200,000.

There are other California tax incentives available in the area of sales tax credit offered to businesses in the Enterprise Zones.? Partnerships, LLCs and S Corps can earn corporate tax credits of up to $100,000 annually, and C Corps over $200,000 annually for those businesses that add energy saving equipment, air and water pollution control equipment, equipment for processing and manufacturing as well as research and development.? This welcome California tax credit alone can save your business up to ten percent of the after-tax cost of capital expenditures.

There are other California tax incentives that may be helpful to your employees.? Both employees and lenders may qualify for additional corporate tax incentives that lend another boost to the local economy.? Because of these generous tax incentives, businesses are encouraged to hire those who have been unemployed or are veterans, which helps individual employees tremendously and helps to reduce unemployment throughout the state while at the same time helping the company as well.

Your professional CPA can help explain corporate tax incentives and determine your company’s eligibility.

With over 35 million residents, California is ranked as the sixth largest economy in the world. It exhibits great demographic and economic variation and has various substantial demands in areas such as health care, education and infrastructure. Similar to other governments, California depends mainly on taxes to fund the public services. The California tax system is composed of a wide range of taxes that are managed and collected by different states and local agencies. Tax plays a significant role in the state and local fiscal system of California.
Taxes levied in California: There are a number of taxes that are levied in California, such as state tax and local tax. The bank and corporation tax, personal tax, sales and use tax along with the major motor vehicle-related levies are the main sources of the own-source revenue of the state. Around 80% of the state expenditure is supported by the sales and use tax, bank and corporation tax and personal income tax. Personal income tax is considered to be the largest single tax that accounts for over half of the entire General Fund revenues.
The remaining 20% of the total expenditure of the state is supported by special funds for certain allotted purposes, including more than half for transportation funded by motor vehicle-related levies. Many taxes such as taxes on tobacco and sales also go into special funds that support health programs and local governments, respectively. In addition to this, local tax revenues come from the property tax that is eventually followed by the local portion of the SUT, utility user charges, business license taxes, as well as other miscellaneous revenues. Local governments, especially counties also depend on the state aid.
Change in the Tax Structure: Over the years, the tax structure of California has changed tremendously. The fundamental elements of the current state tax system were put in place in the late 1920s and early 1930s. Before this, an insurance tax, fuel tax and utility tax used to raise the revenue of the state. Major fiscal disruptions that came along with the depression led to the adoption of both personal income tax as well as the state SUT.
Since then, the tax system in California has remained intact, despite a number of significant statutory and constitutional alterations. By far, the adoption of Proposition 13 in 1978 is considered to be one of the most important of these modifications. It has led to a considerable reduction in the property taxes and changed the state and local fiscal relations.
Adoption of Tax Laws and their modification: Statutory and constitutional are the general types of California tax provisions. Statutory tax provisions reside in the California Revenue and Taxation Code and accounts for a number of tax laws. The legislature or a voter-sponsored initiative can be used to place them on the ballot. A two-thirds vote of the legislature is needed for the application of measures that lead to a net increase in tax revenues. However, in other cases, a plain majority vote suffices. Only the subsequent votes of the people can alter the statutory tax provisions that are approved.

We are always in search of some easy ways to pay our tax. It may involve quicker submissions, improved accuracy and up-to-date methods.
Initially, when technology was not so advanced, you might have sent the required documentation to the IRS by the US Postal Service. But things have changed today and you can make use of the available technology and file the returns electronically, by downloading and retrieving information from the IRS. IRS e-file is an excellent service that provides the facility of electronic filing.
Before you file your tax return please remember the points listed below:
. First understand your state taxes.

. Check the due date.

. Check on the required documentation.

. Enquire about the tax form applicable.

. Choose an appropriate tax professional.

. Keep in mind that tax law changes for individuals.

. California conformity to federal law.
Paying your tax
. You can pay tax online

. Pay tax by credit card

. For banks and corporation use electronic funds transfer.

. You can request for an installment agreement

Once the tax return is filed
. Check the account balance

. Check the refund status

. Check the e-file return status
Electronic payment options for Individuals and Businesses
This is the most convenient, secure and safe method for paying taxes or user fees. Those who like to pay tax by this method can use their credit card and enroll in the Electronic Federal Tax Payment System of the US Treasury. Taxpayers can pay by check or money order. Payments can be made 24 hours a day, 7 days a week. Paying through electronic funds and EFTPS options are free.
IRS E-Filling
The IRS e-file program provides you some easy and adequate alternatives to file your returns on paper.
Choose the method of e-filing that works for you:
Try a Tax Professional
When you choose a tax professional in order to prepare your returns, always remember to ask for IRS e-file. Refunds are fast and in case of direct deposit, they are even faster. These tax professionals may charge you for the tax preparation and sometimes they may also ask for additional fees to provide the IRS e-file.
Make use of a Personal Computer
You can always choose your computer with a modem or Internet access and tax preparation software in order to file your taxes. It is very convenient to e-file from home 24 hours a day, 7 days a week.
Free File
It is possible to prepare and e-file your federal income tax returns free of charge. Commercial tax software companies provide these online free file services. But, you need to know the criteria for the option.
Income Tax Payments for Individuals
Federal (Internal Revenue Service)
In this case, as you earn or receive income during the year, you also need to pay the tax. You can pay in two ways.
Withholding: In case you are an employee, your employer withholds tax from your pay. Tax is also applied to certain other income like gambling winnings, commissions, pensions and bonuses. The amount withheld in these cases is paid to IRS in your name.
Estimated Tax: Generally people who are in business need to pay estimated tax. Also those who receive income from dividends, rents, capital gains and royalties may have to pay estimated tax. It includes not just income tax, but also self-employment tax and alternative minimum tax.

Often it is believed that simply purchasing an aircraft outside of California eliminates the sales and use tax liability.  There is a half truth here; properly purchasing an aircraft outside of California does eliminate the sales tax obligation, however, it does not eliminate the use tax. 

Many people do not know how, or where to begin when going through the California sales and use tax exemption process.  The simple answer is that you must take delivery of the aircraft outside of California.  However, there is more detail behind the simple answer.  For example, the contract of sale (purchase agreement) must specifically reference the location where the aircraft will be delivered to the purchaser outside the state.  

As standard practice, we advise that the delivery occur in Oregon.  Oregon is the closest, non-sales tax state in proximity to California that will not have a jurisdictional claim for sales or use taxes simply because the sale occurs there.  Therefore, Oregon is often times the most convenient location.  However, it may not be convenient in every situation.  There are a total of five non-sales tax states:  Oregon, Alaska, Montana, New Hampshire, and Delaware.  Many other states have guidelines for non-resident purchasers taking delivery within their state without fearing tax repercussions.  Be sure you know the rules.

To properly evidence the delivery outside of California, you must maintain a clear separation between the seller and the buyer.  To accomplish this, the seller will be solely responsible for transporting the aircraft to the out of state delivery location, and the buyer will be solely responsible for getting to the delivery location independent of the aircraft they are purchasing.  It is recommended that the buyer travel via commercial airlines to generate and obtain confirmation of the travel to the out of state delivery location.  In addition, the buyer must not exercise any right or control over the property until after it is delivered (test flights are ok, but insuring the property prior to delivery could pose a problem). 

Once the seller and buyer have converged upon the delivery location, it is now time to execute the paperwork.  They will execute the FAA Bill of Sale, FAA Registration, any delivery receipts prepared by the seller and a proper delivery document for California sales and use tax purposes.  This is referred to by many in the industry as a “6247 statement.”  Beware, some tax representatives will charge you for this form.  This form when properly and completely executed and notarized will evidence the out of state delivery.  The insurance on the property can become effective as of this day.

Upon completion of the delivery, it is recommended that you immediately purchase fuel for the aircraft, using a credit card.  Doing so will generate a receipt that will contain the date, location, tail number, and the buyers signature.  Keep copies of all your documentation; you will need it to support your exemption.

The out of state delivery is only a small part of the exemption process.  There are many factors which come into play when the Board of Equalization is determining where the “place of sale” was.  They will look at the contract of sale, insurance binder, evidence of delivery, evidence how the parties converged upon the delivery location, FAA Bill of Sale, FAA Registration, and other pertinent information to develop their conclusion as to where the delivery occurred.  If there are conflicting dates, locations, or details, they may conclude that the delivery occurred somewhere other than where you intended, and classify your delivery as “ceremonial.”  This means your delivery may jeopardize the availability of the sales and use tax exemption from the onset.