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State of California Franchise Tax Board

Changes to 2003 Forms

Updates to 2003 FTB 3805Z Booklet

Revision Date: 12/20/2007

Revision Details: Our current instructions instruct the taxpayer to add the amount of sale or use tax credit into income, which results in an incorrect amount of tax liability. This revision will allow the taxpayer to report the correct amount of income, which results in a correct amount of tax liability. R&TC Sections 17053.70 and 23612.2 allows a credit against the tax for the taxable year an amount equal to the sales or use tax paid or incurred during the taxable year by the taxpayer in connection with the taxpayer's purchase of qualified property. Taxpayer means a taxpayer engaged in a trade or business within an enterprise zone. Also, any taxpayer that elects to claim this credit cannot increase the depreciable basis of the property as required by IRC Section 164(a) with respects to sales or use tax paid or incurred in connection with the purchase of qualified property. However, the law does not provide for adding the entire amount of credit back into income. This sentence was placed under the Sale and Use Tax Section in error and should only be under the Hiring Credit Section.

  • This update is located on Page 7, 3rd column, Instructions for Worksheet II, Line 2, column (c)

It should read:

For partnerships, enter the amount from line 2, column (c ), on form FTB 3805Z, Side 1, Part 1, line 1c. Also, include the current year sales or use tax credit amount on Forms 565 and 568, Schedule K, line 14 and the distributive share of the credit to partners and members on Schedule K-1 line 14.

The revised form is available for download.

2003 Updates to Form 3805Z Booklet

Revision Date: 03/15/04

Revision Details: Instructions for Enterprise Zone Deduction & Credit Summary and Package X

The reason for the revision is to ensure the taxpayer understands that the EZ hiring credit is reduced by the LAMBRA credit claimed.

  • FTB 3805Z Booklet, Instructions, Page 5, columns 1 & 2, Line 5 under credit and Page 553 of the Package X

It should read:

(1) The LAMBRA Hiring Credit ..............1___________

The revised internet version is available for download.

Back to Tax Form Changes for 2003

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