Section 23649-0 - Table of ContentsRegulation Sections 23649-1 Through 23649-11
§ 23649-1.The Manufacturers' Investment Credit (MIC)(b) MIC for Qualified Costs Paid or Incurred in 1994 Must Be Claimed on Qualified Taxpayer's Return for First Income Year Beginning on or After January 1, 1995§ 23649-2.Definitions(a) Biopharmaceutical Activities(g) Other Biotechnology Activities(q) Research and Development§ 23649-3.Qualified Taxpayer(b) Business Activities Treated as an Establishment(1) Establishment A. Activities Conducted at Different Physical LocationsB. Activities Conducted at a Single Physical Location(2) Auxiliary Establishments A. Auxiliary Activities Conducted at a Different Physical Location than the Supported EstablishmentB. Auxiliary Activities Conducted at the Same Physical Location as the Supported Establishment(3) Operating Establishments(4) Determining Whether Employment is Significant(5) Activities Properly Assigned a SIC Code in a Non-Qualified Activity§ 23649-4.Qualified Costs(b) California Sales and Use Tax Payment Requirement(c) Capitalization Requirement(d) Capitalized Labor Costs(e) Qualified Costs Paid or Incurred Pursuant to Binding Contracts(1) Allocation of Costs Actually Paid Prior to January 1, 1994(3) Successor or Replacement Contracts(5) Conditional Contracts§ 23649-5.Qualified Property(b) General Requirements for Qualified Property (1) Tangible Personal Property(2) Section 1245(a) Property(3) Used in an Activity Described in Division D of the SIC Manual(4) Primarily Used in a Qualified Activity(c) Special Purpose Buildings and Foundations(2) Exclusive Use for a Qualified Purpose(3) Property Which is not a Special Purpose Building and Foundation(d) Specifically Excluded Property (2) Facilities Used for Warehousing Purposes(4) Equipment Used in the Extraction Process(5) Equipment Used to Store Finished Products(6) Tangible Personal Property Used in Administration, General Management, or Marketing(7) Property for Which the California Low-Emission Vehicle Credit is Claimed(e) Movement of Used Property Into This State(f) Property Used to Refine Reformulated or Oxygenated Gasoline§ 23649-6.Leasing(a) In General (1) Lessor Not Entitled to MIC(2) Binding Contract Rules Applicable to Leases(3) Special Rule Applicable to All Leasing Transactions -- "Placed in Service"(b) Operating Leases (2) Applicable Requirements A. Lessee Must Be a Qualified TaxpayerB. Use of Property in a Qualified ActivityC. Sales or Use Tax Payment RequirementE. Chargeable to Capital Account(3) Amount of MIC Lessee May ClaimA. Qualified Cost to LessorB. Exception For Capitalized Labor(4) Special Rules for Operating LeasesB. Limitation on Qualified CostsC. Reduction in Qualified Cost to LessorD. Qualified Cost to Successor LessorE. Acquisition by Lessee of Leased Property(5) Sale-Leaseback TransactionsB. Acquisition Sale and Leaseback(6) Lessor Reporting Requirement(c) Finance Leases (2) Applicable Requirements A. Lessee Must Be a Qualified TaxpayerB. Use of Property in a Qualified ActivityC. Sales or Use Tax Payment RequirementE. Chargeable to Capital Account(3) Amount of MIC Lessee May Claim§ 23649-8.Recapture Rules(c) Disposition of Qualified Property During the Income Year Placed in Service(d) Disposition of Qualified Property During an Income Year Subsequent to the Income Year Placed in Service(e) Adjustment of Carryforwards when Disposition Occurs(f) Recapture of MIC Allowed to Pass-Through Entities(1) Partnerships and Partners(2) S Corporations and Shareholders A. Corporate Level RecaptureB. Pass-through of MIC Recapture to Shareholders(g) Recapture of MIC Allowed in 1994 or 1995 But Deferred Until Qualified Taxpayer's First Income Year Beginning on or after January 1, 1995§ 23649-9.MIC Carryforwards(b) Small Business Determination Made as of the Last Day of the Income Year for Which the MIC is allowed(c) Special Rule for MIC Allowed in 1994 or 1995 But Deferred Until Qualified Taxpayer's First Income Year Beginning on or after January 1, 1995(e) Carryforwards for Pass-Through Entities(f) Carryforwards Permitted After Sunset§ 23649-10.Recordkeeping Requirements(c) Affidavit Regarding Sales and Use Tax(d) Written Statement by Lessor to Lessee§ 23649-11.Miscellaneous Provisions(a) Operative Dates of the MIC(b) Los Angeles Revitalization Zone (LARZ) Credits(c) Election to Claim Sales and Use Tax Refund in lieu of MIC under Revenue and Taxation Code Section 6902.2(d) Sales and Use Tax Exemption under Revenue and Taxation Code Section 6377(e) Special Rule Applicable to Fiscal Year TaxpayersCal. Code Regs. Tit. 18, §§ 23649-0
1. New article 3 (sections 23649-0 --23649-11) and section filed 5-1-96; operative 5-31-96 (Register 96, No. 18). For prior history of article 3, see Register 82, No. 37.
2. Change without regulatory effect amending table of contents for section 23649-2 filed 8-14-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 33).
3. Editorial correction moving article 3 heading to precede section 23636-0 (Register 2004, No. 6). Note: Authority cited: Section 19503, Revenue and Taxation Code. Reference: Section 23649, Revenue and Taxation Code.
1. New article 3 (sections 23649-0 - 23649-11) and section filed 5-1-96; operative 5-31-96 (Register 96, No. 18). For prior history of article 3, see Register 82, No. 37.
2. Change without regulatory effect amending table of contents for section 23649-2 filed 8-14-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 33).
3. Editorial correction moving article 3 heading to precede section 23636-0 (Register 2004, No. 6).