RBZ Tax Alert eNews


2009 California Budget: Bills Signed and Major Tax Changes Enacted On February 20, Governor Schwarzenegger signed a series of bills to address the state's budget process, make changes to the current budget, and increase revenues by, in part, making changes regarding corporate and personal income tax, sales and use tax, property tax, and the vehicle license fee. These changes will be effective for the 2009 tax year, unless specifically stated otherwise. The tax changes include: Personal income tax rates will increase by a maximum of 0.25%; however, the increase may only be 0.125% depending upon how much money California receives under the economic stimulus measure recently signed by the President. Sales and use tax rates will increase by 1.00% starting April 1, 2009. Vehicle license fees will increase from 0.65% to 1.15% starting May 19, 2009. A one-time homebuyer credit for a newly constructed home purchased after February 28, 2009 and before March 1, 2010 is now available. The credit is equal to 5% of the residence's purchase price, up to a maximum of $10,000, and is claimed over a three-year period beginning with the taxable year the residence is purchased. There is now a non-refundable jobs credit for employers with 20 or fewer employees at the end of 2008. The credit is applicable for a new employee hired in 2009 and equal to $3,000 for each new hire. Beginning with the 2011 taxable year, a motion picture production credit will be available. Taxpayers must apply to the Film Commission and the application will only be approved from July 1, 2009 through June 30, 2014. Beginning with the 2011 taxable year, taxpayers apportioning income in California will have an irrevocable election alternative to apportion their business income utilizing a single sales factor apportionment formula. Currently, most taxpayers must apportion their business income utilizing a three factor formula comprised of a payroll factor, a property factor, and a double-weighted sales factor. On the federal side, the President signed the the American Recovery and Reinvestment Act (ARRA) of 2009 on February 13, 2009. Click here to read our eNews release about the ARRA. If you have any questions about how the 2009 California Budget may impact income and other taxes, please contact your RBZ representative or other appropriate advisor. We would be glad to answer any questions you may have. RBZ, LLP is one of the largest public accounting and strategic consulting firms in Los Angeles and has been providing tax services for over 33 years. We are located at 11755 Wilshire Blvd., Ninth Floor, Los Angeles, CA 90025. Phone: 310.478.4148 \| Fax: 310.312.0358 \| Web site: www.rbz.com

2009 California Budget: Bills Signed and Major Tax Changes Enacted

On February 20, Governor Schwarzenegger signed a series of bills to address the state's budget process, make changes to the current budget, and increase revenues by, in part, making changes regarding corporate and personal income tax, sales and use tax, property tax, and the vehicle license fee. These changes will be effective for the 2009 tax year, unless specifically stated otherwise.

The tax changes include:

Personal income tax rates will increase by a maximum of 0.25%; however, the increase may only be 0.125% depending upon how much money California receives under the economic stimulus measure recently signed by the President.
Sales and use tax rates will increase by 1.00% starting April 1, 2009.
Vehicle license fees will increase from 0.65% to 1.15% starting May 19, 2009.
A one-time homebuyer credit for a newly constructed home purchased after February 28, 2009 and before March 1, 2010 is now available. The credit is equal to 5% of the residence's purchase price, up to a maximum of $10,000, and is claimed over a three-year period beginning with the taxable year the residence is purchased.
There is now a non-refundable jobs credit for employers with 20 or fewer employees at the end of 2008. The credit is applicable for a new employee hired in 2009 and equal to $3,000 for each new hire.
Beginning with the 2011 taxable year, a motion picture production credit will be available. Taxpayers must apply to the Film Commission and the application will only be approved from July 1, 2009 through June 30, 2014.
Beginning with the 2011 taxable year, taxpayers apportioning income in California will have an irrevocable election alternative to apportion their business income utilizing a single sales factor apportionment formula. Currently, most taxpayers must apportion their business income utilizing a three factor formula comprised of a payroll factor, a property factor, and a double-weighted sales factor.

On the federal side, the President signed the the American Recovery and Reinvestment Act (ARRA) of 2009 on February 13, 2009. Click here to read our eNews release about the ARRA.

If you have any questions about how the 2009 California Budget may impact income and other taxes, please contact your RBZ representative or other appropriate advisor. We would be glad to answer any questions you may have.

RBZ, LLP is one of the largest public accounting and strategic consulting firms in Los Angeles and has been providing tax services for over 33 years. We are located at 11755 Wilshire Blvd., Ninth Floor, Los Angeles, CA 90025.

Phone: 310.478.4148 | Fax: 310.312.0358 | Web site: www.rbz.com