May 26, 2013 Sacramento Seeks to Breathe Life into the Dying QSBS Exemption
The fiscal cliff deal extended the 100% qualified small business stock exemption for federal purposes. California tax authorities, however, have taken a restrictive and limiting view and have announced that the exemption will not be allowed for state income tax purposes. Under recently proposed SB 209, (1) taxpayers who did not already claim the QSBS exclusion between 2008 and 2012 could do so, (2) the FTB would be prohibited from issuing notices of proposed assessments or seeking interest for taxable years 2008 through 2011, (3) the QSBS exclusion would be suspended for taxable years 2013 through 2015, and (4) the QSBS exclusion would resume beginning January 1, 2016. As originally proposed, the fix dumps the two provisions of the recently struck down version of the QSBS that required 80% of assets and payroll expense be located in California during the holding period. It keeps the provision that requires 80% of the payroll of the company be located in California at issuance. The bill is still undergoing revision and change in the Senate, and the final version may not include the provisions described above.Disclaimer: This blog and website are public sources of general information concerning our firm and its lawyers, as well as the information presented. They are intended, but not promised or guaranteed, to be correct, complete, and up-to-date as of the date posted. This blog and website are not intended to be, and are not, sources of legal opinion or advice. The materials, information, and communications on this blog and website do not apply to any particular person, entity, or situation, and do not apply to you or to your specific situation. You will need to consult with an attorney and/or other appropriate professional about your specific situation. Thank you.