How is that even possible, you may find yourself asking. By treating investors like so:
“They relied on California law as it was written, that they would get a tax break if they invested in certain kinds of businesses,” Lieu said.
But a court ruled in December that practice by the state was unconstitutional. Now, the Franchise Tax Board wants its money.
And it’s killing small businesses, says Ken DeVore, with the National Federation of Independent Businesses.
“It sends a message that you can’t trust government. If you comply in good faith with the rules, they can go back and penalize you.”
It’s estimated that 2,000 small-business investors will have to pay these retroactive taxes. If the senator’s bill doesn’t pass, they’ll be out up to $120 million.
“A lot of them don’t have that money anymore. Its been reinvested,” DeVore said.
What Sacramento gives with one hand, it takes with the other. “Business climate” means something, and California’s is craptaculent.