Taxes have zero impact on my decision to start a company in California.
How come?
California To Hit Startup Founders with Big Retroactive Tax Bills
121–130 of 318 posts
Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#122A lot of the comments are characterizing this as a money grab by the state. To me, it sounds more like the unintended consequences of a clever lawsuit and/or a poorly-crafted piece of tax-break legislation. People should be advised that California has a lot of clever lawyers who work to find and exploit holes in legislation.
The original provision gave preferential treatment to CA residents, which the courts ruled to be unconstitutional: a violation of the Interstate Commerce Clause. The provisions in California law regarding the 80 percent asset and payroll requirements were found to be unconstitutional in August 2012 by the California Court of Appeal in Cutler v. Franchise Tax Board (FTB). The court's decision made California's entire…
The FTB doesn't write the law, the legislature wrote the law. And it was a California court, not a federal court, that ruled the statute unconstitutional (the "California Court of Appeal" isn't a federal court, its the first-level appellate court in the California state court system.)
Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#123I'm not sure I would recommend Texas either. Use tax means you pay annual taxes on everything you own, plus sales tax on any affiliate deals; franchise tax will hit you hard even if your not making a dime because it's based on 'net worth' and not on profit. It's a tough place to be.
No state income tax, much cheaper housing costs than the national average, and cheap gas make it a pretty good place to live and work. Plus, because of all that, you can pay your employees much less (than California) and still provide them an equally-good standard of living.
And Tex-Mex! I don't see how people in other parts of the country could live without Tex-Mex food.
Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#124Can we just hurry up and address the real problem: California's constitution? We should just burn that flawed thing and start over. As I understand it, one of the major problems with California is that the reasonable-sounding idea that citizens should be allowed to amend the constitution through a ballot proposition has backfired and led to all sorts of special interests amending the constitution to protect their own…
It doesn't sound reasonable though, it sounds moronic. A constitution should be the basis of all law (can someone let Obama's administration know about this?) and therefore should be extremely difficult and rely on vast, widespread consent to change. You're entirely right that until this gets fixed, CA will always be screwy.
Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#125Come to New York! We're rolling in so much finance money we don't need to hit up small businesses.
NYC has the most outrageous taxes in the country. You might as well be in France giving up 75%.
Stop spreading FUD. You will never give up 75%, it was intended as a marginal rate AND it was even dismissed by the constitutional council.
Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#126Come to (western) Michigan. We have new corporate tax reforms that dramatically reduced liabilities (6% rate for C-Corps, flow-through taxation for LLCs and S-Corps, personal income tax rate of 4.3%), we have a 6% sales tax, low property taxes, very cheap housing (compared to much of the nation), well-educated workforce, and liberal gun laws (for the guy who wouldn't move to NY). Our 4.3% income tax rate is still low…
Forgot to mention - it costs $50 to form an LLC in Michigan and takes about a week (I've heard horror stories about forming an LLC in CA). $100 additional for same-day service. And you don't have to publicly disclose the LLC's members, only the registered agent, which can be an attorney or any other resident of the state.
Forming a Michigan corporation is $60 and has a few more public disclosure requirements.
Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#127[deleted]
Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#128Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#129Some people in this world are just plain ridiculous. Who runs the country like this?
I really want to know who really thinks so stupidly while making/amending laws.
Re: California To Hit Startup Founders with Big Retroactive Tax Bills
#130Earlier quoted context omitted.
How about the US Supreme Court: See Carpenter v. Pennsylvania, 58 U.S. 456 (1854): "The debates in the federal convention upon the Constitution show that the terms "ex post facto laws" were understood in a restricted sense, relating to criminal cases only, and that the description of Blackstone of such laws was referred to for their meaning. 3 Mad.Pap. 1399, 1450, 1579. This signification was adopted in this Court sh…
The Court gets things wrong occasionally. They got this wrong. Legislative intent does not trump the clear unambiguous wording of the law. This is why, for example, minting the trillion dollar coin would be legal despite the fact that this was clearly not the intent of the legislation.
"Ex post facto law" was a well-established legal term of art referring to a class of criminal law either imposing new prohibitions or increasing punishments for crimes committed before the law was enacted well before the Constitution was written.
Legislative intent doesn't trump the clear and unambiguous wording of the law, but the clear and unambiguous meaning of "ex post facto law" is the particular class of criminal law that the phrase "ex post facto law" has always referred to.