Tax News

CCH (cch.taxgroup.com) reports:

In a nonprecedential letter decision, the California State Board of Equalization (SBE) held that an S corporation and its shareholder were eligible to claim an enterprise zone hiring credit against California personal income tax and corporation franchise and income taxes on behalf of employees who were neither economically disadvantaged nor hard-to-serve individuals but who were otherwise eligible to participate in the Job Training Partnership Act (JTPA) program.
The Franchise Tax Board had argued that the enterprise zone hiring credit could only be claimed on behalf of those individuals who were specifically listed as eligible participants in the JTPA provisions. However, the taxpayers successfully countered that the enterprise zone hiring credit statute enables employers to claim the credit on behalf of any individual eligible to participate in the JTPA program. The statutes governing the JTPA program allow a 10% exception to the program eligibility requirements that limit participation in the program to economically disadvantaged or hard-to-serve individuals. Because the employees at issue fell within the 10% exception applicable to those individuals with serious employment barriers, the taxpayers claimed that the employees were eligible to participate in the JTPA program and therefore were qualified employees for purposes of the enterprise zone hiring credit. The SBE ruled in favor of the taxpayers, allowing the taxpayers to claim the credit on behalf of employees who were older workers, high school drop outs, and veterans, but who did not meet the JTPA's statutory definition of "economically disadvantaged" or "hard-to-serve" individuals.
Letter Decision, Appeal of McClintock , Nos. 304497 and 304512, California State Board of Equalization, August 14, 2007, ¶404-440
Other References:
Explanations at ¶12-061
Explanations at ¶16-855