California's Surreal Retroactive Tax On Tech Startup Investors 514
waderoush writes "Engineers and hackers don't think much about tax policy, but there's a bizarre development in California that they should know about, since it could reduce the pool of angel-investment money available for tech startups. Under a tax break available since the 1990s, startup founders and other investors in California were allowed to exclude or defer their gains when they sold stock in California-based small businesses. Last year, a California appeals court ruled that the tax break was unconstitutional, since it discriminated against investors in out-of-state companies. Now the Franchise Tax Board, California's version of the IRS, has issued a notice saying how it intends to implement the ruling — and it's a doozie. Not only is the tax break gone, but anyone who claimed an exclusion or deferral on the sale of small-business stock since 2008 is about to get a big retroactive tax bill. Investors, entrepreneurs, and even the plaintiffs in the original lawsuit are up in arms about the FTB's notice, saying that it goes beyond the court's intent and that it will drive investors out of the state. This Xconomy article takes an in-depth look at the history of the court case, the FTB's ruling, and the reaction in the technology and investing communities."
Re:California (Score:5, Funny)
NO NO! We hate it here! It's terrible! Don't move to California, the weather isn't nearly as nice as you think! And there are all these liberals everywhere! And the GAYS!
By all means move to the East Coast; or Texas! Anywhere else but here.
(wink wink).
signed,
lifelong Californian
Re:Damages to out of state companies (Score:5, Funny)
We can not allow the tarrifists to win!
Re:California (Score:4, Funny)
"Well, this Californian was in Chicago last week and it was 12F. So, that's why."
Yeah, that can get old even for us Illinoisans.
But, on the other hand, it does help persuade the Californians to go back home after visiting. ;)
Re:"Surreal"? (Score:4, Funny)
From what I hear, Californians smoke a joint before doing anything. Which would necessarily include paying taxes...so maybe it really is surreal?