TweakTown
Tech content trusted by users in North America and around the world
5,914 Reviews & Articles | 38,098 News Posts

California sending out tax bills amounting to $120 million to startup investors

California removes tax deduction, applies it retroactively to 2008

| Business, Financial & Legal News | Posted: Jan 31, 2013 12:07 am

Since 1993, California has had a tax deduction that allowed startup investors who invested in small businesses to not pay taxes on the money made from selling stock, as long as they reinvested that money in more small businesses. This deduction was aimed at encouraging angel investors and others to invest in small businesses.

 

TweakTown image news/2/8/28219_1_california_sending_out_tax_bills_amounting_to_120_million_to_startup_investors.jpg

 

Well, the tax break has been ruled unconstitutional because it benefits companies based in California over other states. This ruling came about when Frank Cutler sued back in 1998. The Franchise Tax Board has agreed to honor the ruling, and removed the deduction this past December, applying it retroactively back to 2008.

 

This means investors who sold their stock in a small business after 2008 will have to pay up taxes that they never thought they would. It's a bit unfair to apply the change retroactively, at least in my opinion, and it should have some consequences and ramifications that extend beyond just this $120 million in back taxes.

NEWS SOURCE
Techcrunch.com

Related Tags

Further Reading: Read and find more Business, Financial & Legal news at our Business, Financial & Legal news index page.

Do you get our news RSS feed? Get It!

Post a Comment about this news

Latest Tech News Posts

View More News Posts

TweakTown Web Poll

Question: Facebook's acquisition of Oculus VR will...

Improve Oculus Rift Development

Hamper Oculus Rift Development

Completely destroy Oculus Rift Development

Let's wait and see, I'm not sure

or View the Results

View More Polls

Forum Activity

View More Forum Posts

Press Releases

View More Press Releases