California businesses fuming over retroactive $120M tax grab

[WestVirginiaRebel]

Fox News:

California's top-end taxpayers -- already steamed over a recent hike in the nation's highest state income tax -- are now fuming over a new $120 million retroactive tax grab on small business owners.

In December, the state's tax authority determined that a tax break claimed over the past few years by 2,500 entrepreneurs and stockholders of California-based small businesses is no longer valid and sent out notices of payment.

"How would you feel if you made a decision, which was made four years ago, (and) you absolutely knew was legally correct and four years later a governing body came in and said, 'no, it's not correct, now you owe us a bunch more money. And we're going to charge you interest on money you didn't even know you owed'," Brian Overstreet told Fox News from his office north of San Francisco.

Last year, Overstreet and his fellow investors sold Sagient Research Systems and immediately reported the sale to the California Franchise Tax Board, the state's version of the IRS. "It was good for the shareholders, it was good for the employees and good for those of us who founded it," Overstreet said about the sale of the data mining company. "We paid the tax based on the law at the time."

But the FTB changed its interpretation of the law after a state appeals court ruled unconstitutional a qualifying provision of the break requiring companies to maintain 80 percent of their workforce in California. Instead of asking the legislature for guidance on what to do, the FTB suspended the break in its entirety and ordered anyone who's claimed it in the last five years to pay up.

"What that translates into is tens of thousands, if not literally hundreds of thousands, of potential jobs," Overstreet contends.

Overstreet said he's learned more about the workings of state government in the last two months than he ever knew before and he's become the point person for others like him who were surprised by the FTB's decision. "It's going to cause not only significant financial hardship but real personal stress on a lot of people who shouldn't be worried about this," he said. "They did what is right. They paid their taxes. They should be off working away at their next business -- instead they're having to spend their time fighting this stuff."

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It's not as bad as Cyprus-but state government liberals want to steal your money all the same...