2017 - Bigfoot and the California Technology Transfer Agreement ‘Physical Usefulness Test’

By Jeffery L. Morris

In this viewpoint, Jeffery Morris discusses what he describes as a mythical physical usefulness test prescribed in a California State Board of Equalization discussion paper and draft regulations. He writes that the underpinnings of the regulations are built on an incorrect reading of Lucent Technologies Inc. v. State Board of Equalization and should be revised. Failing to do so could result in higher sales and use tax on some qualifying asset purchases.
Read Full Article

2017 - Misconceptions of a Federal Interest Recovery & Review

By Jeffery L. Morris

Many companies do not consider a Federal Interest Recovery & Review. They simply think the subject matter will not be applicable to them or the potential refund will be too small to pursue. The calculation of the correct amount of interest resulting from overpayments and underpayments is a highly complex area. In addition, the amounts computed by the IRS and/or state taxing authorities are typically not done in an optimal manner for the taxpayers.
Read Full Article

2017 - Frankencredit: California New Employment Credit

By Jeffery L. Morris

Making California Employment Credits Great Again

After stitching together various parts of human corpses to create his new being, scientist Victor Frankenstein succeeds in reanimating the dead but is immediately repulsed by his creation and its “ugliness.” Dr. Frankenstein falls into a deep depression and shuns his creation. After numerous well-intentioned incongruous statutory requirements were stitched together so that one could qualify for the California New Employment Credit (NEC), the Golden State’s creation was nearly impossible to earn and has been similarly shunned by businesses.
Read Full Article

R&D Tax Credit = Cash for Start-Up Companies

By Philip Dottavio and Greg Elias
The Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) created significant opportunities for “startup” companies who previously could not utilize the Research & Development (“R&D”) tax credit. During their early years, these companies frequently do not generate taxable income and the R&D credits go unused and are carried forward to future years when the Companies become taxable. This creates a disincentive to expend the time and effort to adequately document their qualifying research expenditures (QREs). Despite not generating taxable income, however, they still spend a considerable amount of expenditures on R&D and a majority of those expenditures are wages which are subject to payroll tax.
Read Full Article