Section 23637-1 - The Joint Strike Fighter (JSF) Property CreditThe Joint Strike Fighter (JSF) Property Credit (See Regulation 23637-0 for Table of Contents.)
(a) In General. The Joint Strike Fighter (JSF) Property Credit is allowed to any qualified taxpayer in an amount equal to ten percent (10%) of any qualified costs paid or incurred on or after January 1, 2001, and before January 1, 2006, for qualified property that is placed in service in this state and used by a qualified taxpayer in qualified activities to manufacture a product for ultimate use in a Joint Strike Fighter. A qualified taxpayer who leases qualified property for use in qualified activities of the qualified taxpayer may also claim the JSF Property Credit. Qualified property may be either new or used and must be placed in service in this state and used by a qualified taxpayer in qualified activities for more than one year to avoid recapture of the JSF Property Credit. The basis of any qualified property for which the JSF Property Credit is claimed is not required to be reduced by the amount of any JSF Property Credit claimed.(b) Cross References. Regulation 23637-2 contains definitions applicable to Regulations 23637-1 through 23637-11, inclusive, Regulation 23637-3 contains rules relating to qualified taxpayers, Regulation 23637-4 contains rules relating to qualified costs, Regulation 23637-5 contains rules relating to qualified property, Regulation 23637-6 contains rules applicable to leases of qualified property by qualified taxpayers, Regulation 23637-7 contains rules relating to contract bidding, Regulation 23637-8 contains recapture rules, Regulation 23637-9 contains rules relating to carryforwards, Regulation 23637-10 contains general recordkeeping requirements, and Regulation 23637-11 contains other miscellaneous provisions. For rules relating to the JSF Property Credit allowed to taxpayers under the Personal Income Tax Law, see Revenue and Taxation Code section 17053.37 and the regulations thereunder.(c) General References. For purposes of Regulations 23637-1 through 23637-11, inclusive, the following general references shall apply: (1) All citations to the Revenue and Taxation Code are to the California Revenue and Taxation Code.(2) All citations to the Internal Revenue Code are to the Internal Revenue Code of 1986, as amended.(3) The credits provided for in Revenue and Taxation Code sections 17053.37 and 23637 shall be collectively referred to as the "Joint Strike Fighter Property Credit" or the "JSF Property Credit."(4) Any reference to sales or use tax shall mean California sales or use tax imposed under Part 1 (commencing with section 6001) of Division 2 of the Revenue and Taxation Code. Any discussion of California sales and use tax law in Regulations 23637-1 through 23637-11, inclusive, is based upon such law as in effect on the date these regulations become effective, and is generally intended to restate the requirements set forth in Revenue and Taxation Code section 23637 and to be illustrative of, but have no effect on, the California sales and use tax law and the regulations thereunder. All examples which contain references to an amount of California sales or use tax shall be at an assumed hypothetical sales or use tax rate of eight percent (8%).(5) Unless otherwise provided, any reference to capitalized labor costs in the examples in this regulation shall mean labor costs that are direct costs, as that term is used in Internal Revenue Code section 263 A and defined in the regulations thereunder, that can be identified or associated with and are properly allocable to construction or modification of qualified property.(6) Unless otherwise provided, any reference to qualified property in the examples in this regulation shall assume that the qualified property is being used primarily to manufacture a product for ultimate use in a Joint Strike Fighter. In addition, unless otherwise provided, all examples in this regulation shall assume that the qualified taxpayer's bid to manufacture property for ultimate use in a Joint Strike Fighter reflected a reduction in the amount of the Joint Strike Fighter credit allowable as provided in Revenue and Taxation Code section 23637, subsection (i)(2), and Regulation 23637-7.Cal. Code Regs. Tit. 18, §§ 23637-1
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).