1. (a) In General
2. (b) Cross References

3. (c) General References

   Section 17053.37-2. Definitions.

4. (a) Capitalized Labor
5. (b) Fabricating
6. (c) Joint Strike Fighter
7. (d) Initial Contract or Initial Subcontract
8. (e) Joint Strike Fighter Program
9. (f) Manufacturing
10. (g) Packaging
11. (h) Placed in Service
12. (i) Product For Ultimate Use in a Joint Strike Fighter
13. (j) Primarily
14. (k) Process
15. (l) Processing

16. (m) Qualified Activities

    Section 17053.37-3. Qualified Taxpayer.

17. (a) In General

18. (b) Pass-Through Entities

    Section 17053.37-4. Qualified Costs.

19. (a) In General
20. (b) California Sales and Use Tax Payment Requirement
21. (c) Capitalization Requirement

22. (d) Capitalized Labor Costs

    1. (1) Capitalized Labor Costs Under Third-Party Contracts

23. (e) Qualified Costs Paid or Incurred Pursuant to Binding Contracts

    1. (1) Allocation of Costs Actually Paid Prior to January 1, 2001
    2. (2) Binding Contract Bid Amount Reduced by Credit
    3. (3) Binding Contracts
    4. (4) Successor or Replacement Contracts
    5. (5) Option Contracts

    6. (6) Conditional Contracts

       Section 17053.37-5. Qualified Property.

24. (a) In General

25. (b) General Requirements for Qualified Property

    1. (1) Tangible Personal Property
    2. (2) Section 1245(a)(3)(A) Property
    3. (3) Used to Manufacture a Product for Ultimate Use in a Joint Strike Fighter
    4. (4) Primarily Used in Qualified Activities

26. (c) Specifically Excluded Property

    1. (1) Furniture
    2. (2) Facilities Used for Warehousing Purposes
    3. (3) Inventory
    4. (4) Equipment Used to Store Finished Products
    5. (5) Tangible Personal Property Used in Administration, General Management, or Marketing

27. (d) Movement of Used Property Into This State

    Section 17053.37-6. Leasing.

28. (a) In General

    1. (1) Lessor Not Entitled to JSF Property Credit
    2. (2) Binding Contract Rules Applicable to Leases

    3. (3) Special Rules Applicable to All Leasing Transactions

       1. (A) Placed in Service
       2. (B) Bid Amount Reduced By Credit

29. (b) Operating Leases

    1. (1) In General

    2. (2) Applicable Requirements

       1. (A) Lessee Must Be a Qualified Taxpayer
       2. (B) Use of Property in Qualified Activities
       3. (C) Sales or Use Tax Payment Requirement
       4. (D) Qualified Costs
       5. (E) Chargeable to Capital Account

    3. (3) Amount of JSF Property Credit Lessee May Claim

       1. (A) Qualified Cost to Lessor
       2. (B) Exception For Capitalized Labor

    4. (4) Special Rules for Operating Leases

       1. (A) Limitation on Qualified Costs
       2. (B) Reduction in Qualified Cost to Lessor
       3. (C) Qualified Cost to Successor Lessor
       4. (D) Acquisition by Lessee of Leased Property

    5. (5) Sale-Leaseback Transactions

       1. (A) General Rule
       2. (B) Acquisition Sale and Leaseback
    6. (6) Lessor Reporting Requirement

30. (c) Finance Leases

    1. (1) In General

    2. (2) Applicable Requirements

       1. (A) Lessee Must Be a Qualified Taxpayer
       2. (B) Use of Property in Qualified Activities
       3. (C) Sales or Use Tax Payment Requirement
       4. (D) Qualified Costs
       5. (E) Chargeable to Capital Account

    3. (3) Amount of JSF Property Credit Lessee May Claim

       Section 17053.37-7. JSF Contract Bidding.

31. (a) In General
32. (b) Bid
33. (c) JSF Property Credit Reflected Within Bid
34. (d) JSF Property Credit Allowable
35. (e) Pass-Through Entities

36. (f) Copies Provided to Franchise Tax Board

    Section 17053.37-8. Recapture Rules.

37. (a) In General
38. (b) Disposition
39. (c) Disposition of Qualified Property During the Taxable Year Placed in Service
40. (d) Disposition of Qualified Property During a Taxable Year Subsequent to the Taxable Year Placed In Service
41. (e) Adjustment of Carryforwards When Disposition Occurs

42. (f) Recapture of JSF Property Credit Allowed to Pass-Through Entities

    1. (1) Partnerships and Partners

    2. (2) S Corporations and Shareholders

       1. (A) Corporate Level Recapture

       2. (B) Pass-through of JSF Property Credit Recapture Amount to Shareholders

          Section 17053.37-9. JSF Property Credit Carryforwards.

43. (a) In General
44. (b) Carryforwards for Pass-Through Entities

45. (c) Carryforwards Permitted After Sunset

    Section 17053.37-10. Recordkeeping Requirements.

46. (a) In General
47. (b) Books and Records
48. (c) Affidavit Regarding Sales and Use Tax

49. (d) Written Statement by Lessor to Lessee Section

    Section 17053.37-11. Miscellaneous Provisions.

50. (a) Effective Dates of the JSF Property Credit
51. (b) Manufacturers' Investment Credit (MIC)
52. (c) Enterprise Zone Sales or Use Tax Credit

(Table of Contents -- Regulation Sections 17053.37-1 through 17053.37-11)

Section 17053.37-1. The Joint Strike Fighter (JSF) Property Credit.

Note: Authority cited: Section 19503, Revenue and Taxation Code. Reference: Section 17053.37, Revenue and Taxation Code.

History

1. New section filed 1-23-2003; operative 2-22-2003 (Register 2003, No. 4).