Advocating for the profession: CalCPA sends letter to legislature on the retroactive denial of the QSB tax incentive.

• Position: New&trends

In August 2012, the California Court of Appeals ruled that the Qualified Small Business Tax Incentive that the Legislature had granted to California taxpayers violated the U.S. Constitution by interfering with interstate commerce in Cutler v. Franchise Tax Board. The tax break had allowed individual taxpayers to exclude half of the profits from their income taxes when they sold their interest in small business with at least 80 percent of its payroll and assets located in California.

CalCPA has since learned that the FTB is retroactively pursuing the recalculated back taxes and interest of individuals who benefited from the tax break dating back to 2008. This means that many taxpayers, who in good faith...