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California

Forms & Instructions This booklet contains:

3809 Form FTB 3809, Targeted Tax Area Deduction and Credit
Summary

1999
Targeted Tax Area Business Booklet

Members of the Franchise Tax Board


Kathleen Connell, Chair
Johan Klehs, Member
B. Timothy Gage, Member

STATE OF CALIFORNIA
FRANCHISE TAX BOARD
Instructions for Targeted Tax Area Businesses — Form FTB 3809
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 1998, and to the California Revenue and Taxation Code (R&TC).

Contents Conformity. In general, California tax law Note: Be sure to keep all completed
conforms to the Internal Revenue Code (IRC) worksheets and supporting documents for
General Information . . . . . . . . . . . . . . . . . . 2 as of January 1, 1998. However, there are your records.
Hiring Credit . . . . . . . . . . . . . . . . . . . . . . . . 3 continuing differences between California and
Hiring Credit & Recapture Worksheet . . . . 5 federal tax law. California has not conformed C Targeted Tax Area
Sales or Use Tax Credit . . . . . . . . . . . . . . . . 6 to most of the changes made to the IRC by
Sales or Use Tax Credit Worksheet . . . . . . . 7 the federal Internal Revenue Service (IRS)
Designation
Business Expense Deduction . . . . . . . . . . . 8 Restructuring and Reform Act of 1998 (Public The TTA was established in California to
Business Expense Deduction & Recapture Law 105-206) and has not conformed to any stimulate development in a selected
Worksheet . . . . . . . . . . . . . . . . . . . . . . . . 9 of the changes made by the Tax and Trade economically-depressed area. Special tax
Doing Business Totally Within the Relief Extension Act of 1998 (Public incentives are available to entities and
Targeted Tax Area or Within and Law 105-277). individuals that operate or invest in a
Outside the Targeted Tax Area . . . . . . . . 10 business located within the designated TTA.
Expiration of the Los Angeles Revitalization
Apportionment Worksheet . . . . . . . . . . . . . 11 Businesses operating within the TTA do not
Zone. The Los Angeles Revitalization Zone
Net Operating Loss (NOL) Computations need to qualify or receive prior approval to
(LARZ) expired on December 1, 1998. No new
and Loss Limitations . . . . . . . . . . . . . . . 13 take advantage of these special tax incentives.
LARZ tax incentives may be generated.
Income or Loss Worksheet . . . . . . . . . . . . . 15
However, LARZ credit carryovers and LARZ All of the incorporated cities in Tulare County
NOL Worksheet . . . . . . . . . . . . . . . . . . . . . . 16
NOL carryovers can be utilized to the extent of and portions of the unincorporated areas of
Computation of Credit Limitations . . . . . . . 18
business income apportioned to the former Tulare County received final designation as the
S Corporations . . . . . . . . . . . . . . . . . . . . 18
LARZ. Get FTB 3806, Los Angeles Revitaliza- TTA effective November 1, 1998. The eight
Principal Business Activity Code Chart . . . . 21
tion Zone Business Booklet, for more incorporated cities in Tulare County are:
Form FTB 3809, Targeted Tax Area
information. • Dinuba
Deduction and Credit Summary . . . . . . . 25
Computation of Credit Limitations • Exeter
Worksheet . . . . . . . . . . . . . . . . . . . . . . . . 26
A Purpose • Farmersville
How to Get California Tax Information . . . . 29 Use this booklet to determine the correct • Lindsay
Automated Toll-Free Phone Service . . . . . . 30 amount of deductions and credits that a • Porterville
business may claim for operating or investing • Tulare
General Information in a trade or business within the TTA. • Visalia
Complete the worksheets in this booklet for • Woodlake
California has established four types of each deduction or credit for which the Caution: The special tax incentives available
economic development areas (EDAs) that have business is eligible. Then enter the total to businesses operating within the TTA can
related tax incentives: deductions and credits on form FTB 3809. only be taken for costs paid or incurred on or
• Enterprise Zones; after November 1, 1998 and before the
• Local Agency Military Base Recovery Areas B How to Claim Deductions designation expires.
(LAMBRAs); and Credits
• Manufacturing Enhancement Areas To claim any TTA deduction or credit, the D Important Considerations
(MEAs); and business must attach form FTB 3809 TTA tax incentives apply only to:
• The Targeted Tax Area (TTA). (included in this booklet) to its California tax • Qualified assets purchased and placed in
A business may qualify for special deductions return. service on or after November 1, 1998;
and credits if it operates or invests in a trade Attach a separate form FTB 3809 for each • Qualified employees hired after
or business located within the geographic business you operate or invest in that is November 1, 1998; and/or
boundaries of one of these EDAs. located within the TTA. • Net operating losses (NOLs) for taxable or
California statutes require the Franchise Tax To assist with the processing of the tax return, income years beginning on or after
Board (FTB) to provide information to the indicate that the business operates or invests November 1, 1998.
California Legislature and the Trade and within the TTA by doing the following: Eligibility
Commerce Agency (TCA) regarding the In order to qualify for any of the tax incentives
number of businesses using the EDA tax Form 540 and Write “TTA” in the top left
Form 540NR margin of Form 540 or described above, a taxpayer must meet both
incentives, types of EDA tax incentives being of the following requirements:
used, and the EDAs in which the businesses filers: Form 540NR, Side 1.
are claiming the tax incentives. Note: In order Form 100 filers: Claim TTA tax incentives 1. Be engaged in a trade or business within
to help us meet this requirement, please be on Form 100, line 14, the TTA; and
sure to complete items A through J on form line 20, and line 24 2. Be engaged in a line of business described
FTB 3809, Targeted Tax Area Deduction and through line 27, as in Standard Industrial Classification (SIC)
Credit Summary, as applicable. applicable. Codes 2000 to 2099, inclusive; 2200 to
Form 100S filers: Claim TTA tax incentives 3999, inclusive; 4200 to 4299, inclusive;
For information about: on Form 100S, line 12, 4500 to 4599, inclusive; and 4700 to
• Enterprise zone incentives, get FTB 3805Z, line 19, and line 23 5199, inclusive, of the Standard Industrial
Enterprise Zone Business Booklet; through line 26, as Classification Manual published by the
• LAMBRA tax incentives, get FTB 3807, applicable. United States Office of Management and
Local Agency Military Base Recovery Area Form 109 filers: Check the “yes” box for Budget, 1987 Edition.
Business Booklet; or the enterprise zone, Note: Although the FTB implemented the new
• The MEA hiring credit, get FTB 3808, LARZ, LAMBRA, MEA, principal business activity (PBA) code chart
Manufacturing Enhancement Area or TTA question on the that is based on the North American Industry
Business Booklet. top of Form 109, Side 1. Classification System, 1997 Edition, for
purposes of qualifying for the TTA tax

Page 2 FTB 3809 Booklet 1999


incentives, refer to the SIC. The PBA and Schedule P Alternative Minimum Tax and Wages that qualify for the hiring credit are
North American Industry Classification Credit Limitations those wages paid to a qualified employee for
System (NAICS) codes cannot be used. Get Schedule R Apportionment and Allocation the consecutive 60-month period beginning
FTB Pub. 1157, Guidelines for Targeted Tax of Income on the first date the employee commenced
Area Tax Incentives (available March 2000), employment with the employer. For an
for a list of qualified SIC codes. Part I Hiring Credit employer that operates a business that has
In the case of any pass-through entity, the regularly occurring seasonal or intermittent
Qualified employers conducting a trade or employment decreases and increases,
determination of whether a taxpayer is a
business within the TTA may claim the hiring reemployment of an employee does not
qualified taxpayer for the business expense
credit for a new employee who: constitute commencement of employment for
deduction, hiring credit, and sales or use tax
credit, is made at the entity level. Any • Was hired after November 1, 1998 (see the qualified wages test.
business expense deduction, hiring credit, or General Information C, Targeted Tax Area The credit is based on the smaller of the
sales or use tax credit that is allowed to the Designation); following:
pass-through entity is also passed through to • Spends at least 90% of his or her work
• The actual hourly rate paid or incurred by
the partners or shareholders. For purpose of time (for the qualified employer) on
the employer for work performed by the
this paragraph, the term “pass-through entity” activities directly related to the conduct of
employee during the taxable or income
means any partnership, S corporation, estate, a trade or business located within the TTA;
year; or
or trust. • Performs at least 50% of the work (for the
• 150% of the minimum hourly wage
qualified employer) within the boundaries
established by the Industrial Welfare
E Geographic Boundaries of the TTA; and
Commission.
• Was at the time of hire:
The geographic boundaries of the TTA are Where the California minimum wage is higher
used to determine whether tax incentives are 1. A person receiving or eligible to
than the federal minimum wage, the California
available to a business in a specified location. receive subsidized employment,
minimum wage is used for purposes of
Further information about the geographic training, or services funded by the
computing the TTA hiring credit. The estab-
boundaries of the TTA, Form TCA EZ1 federal Job Training Partnership Act
lished minimum wage after March 1, 1998, is
(Enterprise Zone and Targeted Tax Area Hiring (JTPA) or its successor;
$5.75 per hour. For purposes of computing the
Voucher), or other information not related to 2. A person eligible to be a voluntary or
TTA hiring credit, 150% of the minimum wage
the tax incentives is available from: mandatory registrant under the
is $8.62.
Greater Avenues for Independence
ENTERPRISE ZONE PROGRAMS Example:
Act of 1985 (GAIN) or its successor;
CA TRADE AND COMMERCE AGENCY
3. A member of a targeted group as Ray Smith was hired January 1, 1999.
801 K STREET SUITE 1700
defined in the federal Work Opportu- Ray's hourly rate for Month 1 was $7.00. At
SACRAMENTO CA 95814
nity Tax Credit (WOTC) or its the beginning of Month 2, his hourly rate
Telephone: (916) 324-8211 successor;
FAX: (916) 322-7214 increased to $8.00. For Month 3, Ray's hourly
4. An economically disadvantaged rate increased to $9.00. The hourly rate that
Website: commerce.ca.gov individual 14 years of age or older; qualifies for the credit is limited to 150% of
If your business is located within and outside 5. A qualified dislocated worker; the minimum wage, or currently $8.62 per
the TTA, see Part IV for instructions on how 6. A disabled individual eligible for, hour.
to apportion income. enrolled in, or who completed a state
rehabilitation plan; Month(s) Hours x Hourly = Qualified wages
per month rate per month
F Forms Table 7. A service-connected disabled veteran;
1 175 $7.00 $1,225.00
The titles of forms referred to in this booklet 8. A veteran of the Vietnam era;
9. A veteran who recently separated 2 170 8.00 $1,360.40
are:
from military service; 3 170 8.62 $1,465.40
Form 100 California Corporation 10. An ex-offender;
Franchise or Income Tax Credit Limitations
11. A person eligible for or a recipient of:
Return • Federal Supplemental Security • The amount of hiring credit claimed may
Form 100S California S Corporation Income (SSI) benefits; not exceed the amount of tax on the TTA
Franchise or Income Tax • Aid to Families with Dependent business income in any year. Use
Return Children (AFDC); Worksheet VI on Side 2 of form FTB 3809
Form 109 California Exempt Organization • Food stamps; or to compute the credit limitation.
Business Income Tax Return • State and local general assistance; • In the case where the business is qualified
Form 540 California Resident Income Tax 12. A Native American; or to take the TTA hiring credit as well as
Return 13. A resident of the TTA. another hiring credit (e.g., enterprise zone,
Form 540NR California Nonresident or Part- MEA, or LAMBRA) for the same wage
Year Resident Income Tax Employers hiring qualified employees should expense, the business may only claim one
Return get Form TCA EZ1 from the local agency credit.
Form 541 California Fiduciary Income Tax responsible for verifying employee eligibility. • The business may carry over any unused
Return Contact the local TTA coordinator for more hiring credit to future years until the credit
Form 565 Partnership Return of Income information on the local agency and verifica- is used. In the case of an S corporation,
Form 568 Limited Liability Company tion process. 2/3 of the credit is lost and the remaining
Return of Income The percentage of wages used to calculate the 1/3 can be carried over if it cannot be used
Schedule CA California Adjustments — credit depends on the number of years the in the current year.
(540) Residents employee works for the employer in the TTA. For additional information about the treatment
Schedule CA California Adjustments — The applicable percentage begins at 50% and of credits for S corporations, see Part VI.
(540NR) Nonresidents or Part-Year declines 10% for each year of employment.
Residents After the fifth year of employment, no credit is
allowed.

FTB 3809 Booklet 1999 Page 3


Recordkeeping Section B – Credit Recapture Line 1, column (a) – Enter the name of the
Retain a copy of Form TCA EZ1 to substanti- terminated employee(s). Attach an additional
ate an individual's eligibility as a ‘’qualified The employer must recapture the amount of schedule(s) if necessary.
employee’’. In addition, for each qualified credit attributable to an employee’s wages if
the employer terminates the employee at any Line 1, column (b) – Enter the amount of
employee, keep a schedule of the first 60 credit recapture for each employee listed in
months (five years) of employment showing time during the longer of:
column (a).
(at least): • The first 270 days of employment
(whether or not consecutive); or Line 2 – Enter the amount from line 2,
• Employee’s name; column (b) on form FTB 3809, Side 1, Part V,
• Date the employee was hired; • 90 days of employment plus 270 calendar
days. line 5.
• Number of hours the employee worked for
each month of employment; Employers of seasonal employees must Also, include the amount of hiring credit
• Smaller of the hourly rate of pay for each recapture the amount of credit attributable to recapture on your California tax return or
month of employment or 150% of the a seasonal employee’s wages if the employer schedule as follows:
minimum wage; terminates employment before the completion • Form 100, Schedule J, line 5;
• Location of the employee’s job site and of 270 days of employment during the • Form 100S, Schedule J, line 5 and
duties performed; and 60-month period beginning the day the Schedule K-1 (100S), line 23;
• Total qualified wages per month for each employee commences employment with the • Form 109, Schedule K, line 4;
month of employment. employer. • Form 540, line 36;
A “day of employment” means any day for • Form 540NR, line 45;
Instructions for Worksheet I — which the employee receives wage compensa- • Form 541, line 21b and Schedule K-1
(541), line 11e;
Hiring Credit & Recapture tion (including a paid sick day, holiday, or
• Form 565, Schedule K, line 22 and
vacation day).
Schedule K-1 (565), line 22; or
Section A – Credit Computation The employer must add to the current year’s • Form 568, Schedule K, line 22 and
tax the amount of credit claimed in the year of Schedule K-1 (568), line 22.
Line 1, column (a) – Enter the name of each termination and all prior years in which the
qualified employee. Attach an additional credit was claimed for the terminated Indicate that you included the hiring credit
schedule(s) if necessary. employee. recapture on your tax return by writing
Line 1, columns (b) and (c) – Enter in the “FTB 3809” in the space provided on the
Note: The credit recapture does not apply if schedule or form.
appropriate column, the qualified wages paid the termination of employment was:
or incurred during the taxable or income year Partnerships and limited liability companies
to each employee listed in column (a). • Voluntary on the part of the employee; (LLCs) taxed as partnerships must identify the
• In response to misconduct of the recapture amounts for their partners and
Line 2, columns (b) and (c) – Add the employee;
amounts in each column. members on Schedule K-1 (565 or 568).
• Caused by the employee becoming
Line 3, columns (b) and (c) – Multiply the disabled (unless the employee was able to S corporation shareholders must recapture
total in each column of line 2 by the percent- return to work and the employer did not the portion of credit that was previously
age in each column. offer to reemploy the individual); claimed, based on the terminated employee’s
• Carried out so that other qualified wages. S corporations must also identify the
Line 4 – Enter the amount from line 4 on recapture amount for shareholders on
form FTB 3809, Side 2, Worksheet VI, as individuals could be hired, creating a net
increase in both the number of qualified Schedule K-1 (100S). This amount will differ
follows: from the amount recaptured by the
employees and the number of hours
• Part II, line 8B, column (b) for corpora- S corporation on Form 100S, Schedule J.
worked; or
tions, individuals, and estates and trusts;
• Due to a substantial reduction in the
• Part III, line 10, column (b) for S corpora-
employer’s trade or business operations.
tions; or
• Part IV, line 12, column (b) for corpora-
tions and S corporations subject to paying
only the minimum franchise tax.

Page 4 FTB 3809 Booklet 1999


Worksheet I Hiring Credit & Recapture — Targeted Tax Area
Section A Credit Computation
Qualified wages paid or incurred for year of employment
(a) (b) (c) (d) (e) (f)
Employee’s name 1st year 2nd year 123456789012345678901234567890121234567890
3rd year 4th year 5th year
123456789012345678901234567890121234567890
1 123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
2 Total. See instructions . . . . . . . . . . . . . . . . . 123456789012345678901234567890121234567890
.50 .40 123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
.30 .20 .10
3 Multiply line 2 by the percentage for each 123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
column. See instructions . . . . . . . . . . . . . . .
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890

4 Enter the amount on line 3. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


Note: You cannot take the TTA hiring credit as well as another credit for the same wage expense.

Section B Credit Recapture


(a) (b)
Terminated employee’s name Recapture amount
1

2 Total amount of credit recapture. Add the amount in column (b). See instructions for where to
report on your California tax return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

FTB 3809 Booklet 1999 Page 5


Part II Sales or Use Tax Credit Credit Limitations • The amount of sales or use tax paid on its
• The amount of sales or use tax credit purchase;
Individuals, estates or trusts, partnerships, claimed may not exceed the amount of tax • The location where it is used; and
and LLCs taxed as partnerships may claim a on the TTA business income in any year. • If purchased from a manufacturer located
credit equal to the sales or use tax paid or After completing Worksheet II, use outside California, records to substantiate
incurred to purchase up to $1 million of Worksheet VI on Side 2 of form FTB 3809 that property of comparable quality and
qualified property. to compute the credit limitation. price was not available for purchase in
• Any unused credit may be carried over and California.
Corporations may claim a credit equal to the
sales or use tax paid or incurred to purchase applied against the tax on TTA income in Example:
up to $20 million of qualified property. future years. XYZ Inc., an S corporation, purchases
Individuals who are S corporation sharehold- • In the case where the business is qualified qualified property for $20 million ($20 m.).
ers may claim their pro-rata share of pass- to take the TTA sales or use tax credit as The sales tax rate is 6% (.06) and the entity-
through credit to the extent the S corporation well as another credit (e.g. enterprise zone level tax rate is 1.5% (.015).
paid or incurred sales or use tax to purchase sales or use tax credit, manufacturers’ The credit allowed XYZ Inc. and the depre-
up to $1 million of qualified property. See the investment credit, or LAMBRA sales or use ciable basis of the qualified property for
example in the third column of this page. tax credit) for the same piece of property, XYZ Inc. are figured as follows:
the business may only claim one credit. Depreciable
Qualified property is the machinery or
machinery parts used to: Depreciation basis
Any taxpayer that claims this credit cannot Qualified property $20 m. $20 m.
• Manufacture, process, fabricate, or increase the basis of the qualified property Sales tax paid
otherwise assemble a product; with respect to the sales or use tax paid or ($20 m. x .06) 1.2 m. +1.2 m.
• Produce renewable energy resources; or incurred in connection with the purchase of Sales or use tax credit
• Control air or water pollution. qualified property. allowed XYZ Inc. 1.2 m. (1.2 m.)
In addition, qualified property is: To compute the difference between California Depreciable basis of qualified
• Data processing and communications and federal depreciation, use the following property for XYZ Inc. $20 m.
equipment including, but not limited to, forms or schedules: Credit allowed to offset the
computers, computer-automated drafting • Form 100 filers – FTB 3885, Corporation entity-level tax ($1.2 m. x 1/3) $0.4 m.
systems, copy machines, telephone Depreciation and Amortization;
systems, and fax machines; and XYZ Inc. has two 50% shareholders. The
• Form 100S filers – Schedule B (100S), credit allowed the shareholders and the
• Motion picture manufacturing equipment S Corporation Depreciation and
central to production and postproduction depreciable basis of the qualified property for
Amortization; the shareholders are figured as follows:
including, but not limited to, cameras, • Form 109 filers – Form 109, Schedule J,
audio recorders, and digital image and Depreciation. Note: Exempt trusts use Depreciable
sound processing equipment. FTB 3885F, Depreciation and Amortization; basis
The business must use the property • Form 540 and Form 540NR filers – Qualified property
exclusively within the boundaries of the TTA. FTB 3885A, Depreciation and Amortization (purchased by
Adjustments; XYZ Inc.) $20 m. $20 m.
Use tax paid on purchases of property outside
• Form 541 filers – FTB 3885F, Depreciation Sales tax
California qualifies for the credit only if
and Amortization; (paid by XYZ Inc.) 1.2 m. +1.2 m.
property of a comparable quality and price
• Form 565 filers – FTB 3885P, Depreciation Maximum qualified costs
was not available in California at the time it
and Amortization; or for sales or use
was purchased.
• Form 568 filers – FTB 3885L, Depreciation tax credit 1 m.
Leased Property Sales or use tax credit
and Amortization.
The sales tax paid on qualified property being allowed the share-
purchased using a financial (conditional sales) Recordkeeping holders
contract qualifies for the sales or use tax In order to support the sales or use tax credit ($1 m. x .06) .06 m. (.06 m.)
credit. claimed, keep all records that document the
purchase of the qualified property, such as the Depreciable basis of qualified
To determine whether the lease qualifies as a property for the
sales receipt and proof of payment. Addition-
purchase rather than a true lease, see shareholders $21.14 m.
ally, keep all records that identify or describe:
Revenue Ruling 55-540, 1955-2 C.B. 39 and
• The property purchased (such as serial Total amount of credit allowed
FTB Legal Ruling 94-2, March 23, 1994.
numbers, etc.); the shareholders $.06 m.
Note: Each shareholder is allowed a $30,000
(.06 m. ÷ 2 = .03 m.) sales or use tax credit.

Page 6 FTB 3809 Booklet 1999


Instructions for Worksheet II Line 1, column (c) – Enter the amount of Line 2, column (c) – Add the amounts in
sales or use tax paid or incurred on the line 1, column (c). Enter the total here and on
— Sales or Use Tax Credit property listed in column (a). form FTB 3809, Side 2, Worksheet VI, as
Line 1, column (a) – List the items of Line 2, column (b) – Add the amounts in follows:
qualified property purchased during the year. line 1, column (b). • Part II, line 9B, column (b) for corpora-
For each item, provide the location (street Caution: This amount cannot exceed tions, individuals, and estates and trusts;
address and city) of its use. Attach an $1 million for individuals, estates or trusts, • Part III, line 11, column (b) for S corpora-
additional schedule(s) if necessary. partnerships, or LLCs taxed as partnerships tions; or
Line 1, column (b) – Enter the cost of the or $20 million for corporations. When • Part IV, line 13, column (b) for corpora-
property listed in column (a). computing the amount of credit to pass tions and S corporations subject to paying
through to S corporation shareholders, use only the minimum franchise tax.
$1 million. Caution: Only the sales or use tax paid or
incurred on the cost of qualified property up
to the limitations in column (b) previously
stated, may be claimed as a credit.

Worksheet II Sales or Use Tax Credit — Targeted Tax Area


(a) (b) (c)
Property description and location Cost Sales or use tax

2 Total the amounts in column (b) and column (c). See instructions . . . . . . . . . . . . . . . 2

FTB 3809 Booklet 1999 Page 7


Part III Business Expense Depreciation • Form 109, Part II, line 24;
If the business elects to deduct the amount • Schedule CA (540), column B, on the
Deduction computed in Worksheet III, Section A, as a applicable line for your business activity;
business expense, the depreciable basis of the • Schedule CA (540NR), column B, on the
Certain businesses conducting a qualified
property must be reduced by the deduction. applicable line for your business activity;
trade or business within the TTA may elect to
Subtract the amount claimed as a business • Form 565, Schedule K, line 9 and
treat 40% of the eligible cost of qualified
expense from the basis or cost of the property Schedule K-1 (565), line 9; or
property as a business expense rather than a
and depreciate the remaining basis or cost. • Form 568, Schedule K, line 9 and
capital expense. For the year the property is
Schedule K-1 (568), line 9.
placed in service, the business may deduct Normal depreciation is allowed on the cost of
the cost in the current year rather than the property in excess of the expensed Note: If filing Form 540 or Form 540NR,
depreciate it over several years. amount, starting with the taxable or income indicate that you are claiming the business
year following the taxable or income year the expense deduction by writing “FTB 3809”
Note: The TTA business expense deduction is
property was placed in service. above the dotted line to the left of the amount
not allowed for estates or trusts.
entered on Form 540, line 14 or Form 540NR,
Qualified property is any recovery property Corporations may not claim the additional line 14.
that is IRC Section 1245 property which first-year depreciation allowed under R&TC
includes, but is not limited to, tangible Section 24356 on any item of property if any Section B – Deduction
personal property (excluding buildings) and portion of it was deducted as a business
most equipment and furnishings acquired by expense. All other taxpayers cannot claim the Recapture
purchase for exclusive use within the TTA. deduction allowed under IRC Section 179 on The deduction is subject to recapture (added
Office supplies and other small nondepre- any item of property if any portion of it was back to income) if, before the close of the
ciable items are not included. deducted as a business expense. second taxable or income year after the
The maximum aggregate cost applicable to To compute the difference between California property was placed in service, the property is
the 40% deduction the business may claim in and federal depreciation, use the following sold, disposed of, or no longer used exclu-
any taxable or income year is determined by forms: sively in the TTA trade or business. In that
the number of years that have elapsed since case, add to current year income the amount
• Form 100 filers – FTB 3885, Corporation
the TTA received its final designation. The TTA previously deducted for that property.
Depreciation and Amortization;
received final designation on • Form 100S filers – Schedule B (100S), Line 1, column (a) – Enter a description of
November 1, 1998. S Corporation Depreciation and the property. Attach an additional schedule(s)
The applicable cost is: Amortization; if necessary.
• Form 109 filers – Form 109, Schedule J, Line 1, column (b) – Enter the amount of the
Taxable or income year of
Depreciation; business expense deduction claimed for each
designation . . . . . . . . . . . . . . . . . . $100,000
• Form 540 and Form 540NR filers – property listed in column (a).
1st taxable or income year
FTB 3885A, Depreciation and Amortization Line 2 – Enter the total on form FTB 3809,
after designation . . . . . . . . . . . . . . $100,000
Adjustments; Side 1, Part V, line 6, and on your California
2nd taxable or income year
• Form 565 filers – FTB 3885P, Depreciation tax return or schedule as follows:
after designation . . . . . . . . . . . . . . . $75,000
and Amortization; or
3rd taxable or income year • Form 100, line 14, as a negative amount;
• Form 568 filers – FTB 3885L, Depreciation
after designation . . . . . . . . . . . . . . . $75,000 • Form 100S, line 12, as a negative amount,
and Amortization.
Each remaining taxable or Form 100S, Schedule K, line 6, and
income year after designation . . . . . $50,000
Instructions for Worksheet III Schedule K-1 (100S), line 6;
Election • Form 109, Part I, line 12;
The business must elect to treat the cost of — Business Expense Deduction • Schedule CA (540), column C, on the
qualified property as a business expense in & Recapture applicable line for your business activity;
the year the property is first placed in service. • Schedule CA (540NR), column C, on the
However, the TTA business expense deduction applicable line for your business activity;
is not allowed if the property was:
Section A – Deduction • Form 565, Schedule K, line 7 and
• Transferred between members of an Computation Schedule K-1 (565), line 7; or
affiliated group; Line 2, column (a) – Enter a description of • Form 568, Schedule K, line 7 and
• Acquired as a gift or inherited; the property and the location (street address Schedule K-1 (568), line 7.
• Traded for other property; and city) of its use. Attach an additional Note: If filing Form 540 or Form 540NR,
• Received from a personal or business schedule(s) if necessary. indicate that you are recapturing the business
relation as defined in IRC Section 267 or Line 2, column (b) – Enter the cost of the expense deduction by writing “FTB 3809”
707(b); or property listed in column (a). above the dotted line to the left of the amount
• Described in IRC Section 168(f). entered on Form 540, line 16 or Form 540NR,
Line 5 – Enter the amount from line 5, line 16.
The TTA business expense deduction must be column (b) on form FTB 3809, Side 1, Part II,
claimed by making an election on the original line 2, and on your California tax return or
return filed, and thus cannot be claimed on an schedule as follows:
amended return. Such an election cannot be
• Form 100, line 14;
revoked without the written consent of
• Form 100S, line 12, Form 100S,
the FTB.
Schedule K, line 8, and Schedule K-1
A husband and wife filing separate returns (100S), line 8;
may each claim 50% of the allowable
deduction. In the case of a partnership, the
dollar limitation applies to the partnership and
to each partner.

Page 8 FTB 3809 Booklet 1999


Worksheet III Business Expense Deduction & Recapture — Targeted Tax Area

Section A Deduction Computation

1 The maximum aggregate deduction:


• Taxable or income year of designation, enter $40,000;
• 1st taxable or income year after designation, enter $40,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Note: This amount will decrease in later years based on the number of taxable or income years that
have expired since the designation date.

(a) (b)
Property description and location Cost

3 Total. Add the amounts in column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

4 Multiply line 3 by 40% (.40) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


5 Enter the smaller of line 1 or line 4. This is the maximum amount deductible as a business expense
for the TTA. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Section B Deduction Recapture


(a) (b)
Property description Recapture amount

2 Total recapture amount. Add the amounts in column (b). See instructions . . . . . . . . . . . . . . . . . . . . . . . . . 2

FTB 3809 Booklet 1999 Page 9


Part IV Doing Business 2. The distributive (or pro-rata for Payroll Factor
S corporations) share of the business Payroll is defined as the total amount paid to
Totally Within the Targeted Tax capital gains and losses apportioned to the the business’s employees for compensation
Area or Within and Outside the TTA included in item 1. for the production of business income during
the taxable or income year.
Targeted Tax Area These items should be reported using the
appropriate California schedules listed below: Compensation means wages, salaries,
TTA tax incentives are limited to the tax on • Schedule K-1 (100S), line 23; commissions, and any other form of remu-
business income attributable to operations • Schedule K-1 (541), line 11e; neration paid directly to employees for
within the TTA. If the business is located • Schedule K-1 (565), line 22; or personal services.
totally within the TTA or within and outside • Schedule K-1 (568), line 22. Payments made to independent contractors or
the TTA, the taxpayer must determine the any other person not properly classified as an
portion of total business operations that are Apportionment employee are excluded.
attributable to the TTA. Business income is apportioned to the TTA by Compensation Within the Targeted Tax Area
multiplying the total California business Compensation is considered to be within the
Business Income vs. income of the taxpayer by a fraction, the TTA if any one of the following tests is met:
Nonbusiness Income numerator which is the property factor plus
• The employee’s services are performed
Only business income is apportioned to the the payroll factor, and the denominator which
is two. Loss is apportioned to the TTA by within the geographical boundaries of the
TTA to determine the incentive limitation. TTA TTA; or
tax incentives are limited to tax on business multiplying the taxpayer's net business
operating loss from all sources by a fraction, • The employee’s services are performed
income attributable to the operations within within and outside the TTA, but the
the TTA. the numerator which is the property factor
plus the payroll factor, and the denominator services performed outside the TTA are
Business income is defined as income arising incidental to the employee’s service within
which is two.
from transactions and activities in the regular the TTA.
course of the trade or business. Business Property Factor
Property is defined as the average value of all Note: Incidental means any temporary or
income includes income from tangible and transitory service rendered in connection with
intangible property if the acquisition, real and tangible personal property owned or
rented by the business and used during the an isolated transaction.
management, and disposition of the property
constitute integral parts of the regular trade or taxable or income year to produce business Compensation Within and Outside the
business operations. Nonbusiness income is income. Targeted Tax Area
all income other than business income. Get Note: Property is included in the factor if it If the employee’s services are performed
Title 18 Cal. Code Regulation Section 25120 was available for use during the taxable or within and outside the TTA, the employee’s
for further references and examples of income year. compensation will be attributed to the TTA if:
nonbusiness income. Property owned by the business is valued at • The employee’s base of operations is
For an individual, business income includes, its original cost. Generally, original cost is the within the TTA; or
but is not limited to, California business basis of the property for federal income tax • There is no base of operations in any other
income or loss from Schedules C, D, D-1 (or purposes (prior to any federal adjustment) at part of the state in which some part of the
Form 4797, Sales of Business Property, if you the time of acquisition by the business, service is performed, but the place from
did not have to file a Schedule D-1), E, and F, adjusted for subsequent capital additions or which the service is directed or controlled
as well as wages. Be sure to include casualty improvements and partial dispositions is within the TTA.
losses, disaster losses, and any business because of sale or exchange. Allowance for Base of operations is the permanent place
deductions reported on Schedule A as depreciation is not considered. from which employees start work and
itemized deductions. Rented property is valued at 8 times the net customarily return in order to receive
Note: If you elected to carry back part or all of annual rental rate. The net annual rental rate instruction from the taxpayer or communica-
your current year disaster loss under IRC for any item of rented property is the total tions from their customers or persons; to
Section 165(i)(1), do not include the amount rent paid for the property, less aggregate replenish stock or other material; to repair
of the loss that was carried back in your annual subrental rates paid by subtenants. equipment; or to perform any other functions
current year business income for the TTA. necessary in the exercise of their trade or
The numerator of the property factor is the profession at some other point or points.
In general, all transactions and activities of average value of the real and tangible personal
the business that are dependent upon or property owned or rented by the business and The numerator of the payroll factor is the
contribute to the operations of the economic used within the TTA during the taxable or total compensation paid to employees for
enterprise as a whole constitute a trade or income year to produce TTA business income working within the TTA during the taxable or
business. (column (b)). income year (column (b)).
When a corporation is part of a group of When determining income apportionment on When determining income apportionment on
corporations engaged in a unitary business, Worksheet IV, Section A, the denominator of Worksheet IV, Section A, the denominator of
the income and apportionment factors of the the property factor is the total average value the payroll factor is the total compensation
unitary group must be combined. For more of all real and tangible personal property paid to employees working in California
information, get Schedule R. See the owned or rented and used during the taxable (column (a)).
instructions for ordering forms on page 29. or income year within California (column (a)). When determining loss apportionment on
Pass-through entities must report to their When determining loss apportionment on Worksheet IV, Section B, the denominator of
shareholders, beneficiaries, partners, and Worksheet IV, Section B, the denominator of the payroll factor is the total compensation
members: the property factor is the total average value paid to employees working in all business
of real and tangible personal property owned operation locations.
1. The distributive (or pro-rata for
S corporations) share of the business or rented and used during the year in all
income apportioned to the TTA; and business operation locations.

Page 10 FTB 3809 Booklet 1999


Example – Computation of TTA income Instructions for Worksheet IV Section B – Loss Apportionment
assigned to each entity operating within
the TTA: — Apportionment Use Worksheet IV, Section B, Loss Apportion-
ment, to determine your net operating loss
Parent Corporation A has two subsidiaries, Section A – Income apportioned to the TTA. A taxpayer’s TTA net
B and C. Corporations A and B operate within operating loss is its net business operating
the TTA. The combined group operates within Apportionment
loss from all sources multiplied by the
and outside California and apportions its Use Worksheet IV, Section A, Income specific TTA apportionment percentage
income to California using Schedule R. The Apportionment, to determine the amount of computed in Worksheet IV, Section B.
combined group’s business income appor- business income apportioned to the TTA. The
TTA business income determines the amount The TTA property and payroll factors used in
tioned to California was $1,000,000.
of the tax incentives that can be used. the determination of the apportioned business
Business income apportioned to the TTA is net operating loss include worldwide amounts
determined as follows: Only California source business income is in the denominator.
A B Combined apportioned to the TTA. A taxpayer’s TTA
Group business income is its California apportioned Note: If the business operates solely within
Property Factor business income multiplied by the specific the TTA and all its property and payroll are
TTA property $2,000,000 $1,000,000 $3,000,000 solely within the TTA, you do not have to
California property $5,000,000 TTA apportionment percentage.
Apportionment % 40% 20% 60% complete this worksheet. Enter 100% (1.00)
The TTA property and payroll factors used in on line 4.
Payroll Factor the determination of apportionable business
TTA payroll $2,000,000 $800,000 $2,800,000
California payroll $4,000,000 income include only the taxpayer’s California
Apportionment % 50% 20% 70% amounts in the denominator.
Average Note: If the business operates solely within
Apportionment % 45% 20% 65%
(Property + Payroll Factors) the TTA and all its property and payroll are
2 solely within the TTA, you do not have to
Apportioned complete this worksheet. Enter 100% (1.00)
Business Income $1,000,000
TTA INCOME $ 450,000 $ 200,000 $ 650,000 on line 4.

Worksheet IV Apportionment — Targeted Tax Area


Section A Income Apportionment
Use Worksheet IV, Section A, if your business has net income (a) (b) (c)
from sources within and outside the TTA. Total within Total within Percentage within the TTA
California the TTA 1234567890123456789012
1234567890123456789012
(column (b) ÷ column (a))
PROPERTY FACTOR
1234567890123456789012
1234567890123456789012
1234567890123456789012
1234567890123456789012
1 Average yearly value of owned real and tangible personal
1234567890123456789012
property used in the business (at original cost). See 1234567890123456789012
1234567890123456789012
instructions on page 10. Exclude property not connected 1234567890123456789012
1234567890123456789012
with the business and the value of construction in progress.
1234567890123456789012
1234567890123456789012
1234567890123456789012
1234567890123456789012
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
1234567890123456789012
Delivery equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
Other tangible assets (attach schedule) . . . . . . . . . . . . . .
1234567890123456789012
1234567890123456789012
1234567890123456789012
1234567890123456789012
Rented property used in the business.
1234567890123456789012
1234567890123456789012
See instructions on page 10 . . . . . . . . . . . . . . . . . . . . .
Total property values . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PAYROLL FACTOR
2 Employees’ wages, salaries, commissions, and other
compensation related to business income included in
the return.
Total payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
3 Total percentage (sum of the percentages in column (c)) 123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
4 Average apportionment percentage (1/2 of line 3). 123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
Enter here and on form FTB 3809, Side 1, line 4 . . . . . . . 123456789012345678901234567890121234567890
Note: The average apportionment percentage shown on line 4 represents the portion of the taxpayer’s total business that is attributable to activities
conducted within the TTA. Also, those factors with zero balances in the totals of column (a) will not be included in the computation of the average
apportionment percentage. For example, if the taxpayer does not have any payroll within or outside the TTA, then the average apportionment
percentage would be computed by dividing line 3 by one (instead of by two as normally instructed).

FTB 3809 Booklet 1999 Page 11


Worksheet IV (continued)
Section B Loss Apportionment (For the computation of current year net operating loss only)
Use Worksheet IV, Section B, if your business has net losses (a) (b) (c)
from sources within and outside the TTA. Total within and Total within Percentage within the TTA
outside the TTA the TTA 1234567890123456789012
(column (b) ÷ column (a))
1234567890123456789012
1234567890123456789012
PROPERTY FACTOR 1234567890123456789012
1234567890123456789012
1 Average yearly value of owned real and tangible personal 1234567890123456789012
1234567890123456789012
1234567890123456789012
property used in the business (at original cost). See
1234567890123456789012
1234567890123456789012
instructions on page 10. Exclude property not connected 1234567890123456789012
with the business and the value of construction in progress. 1234567890123456789012
1234567890123456789012
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1234567890123456789012
1234567890123456789012
1234567890123456789012
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Delivery equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1234567890123456789012
1234567890123456789012
1234567890123456789012
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Other tangible assets (attach schedule) . . . . . . . . . . . . . . 1234567890123456789012
1234567890123456789012
Rented property used in the business. 1234567890123456789012
1234567890123456789012
1234567890123456789012
1234567890123456789012
See instructions on page 10 . . . . . . . . . . . . . . . . . . . . .
Total property values . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PAYROLL FACTOR
2 Employees’ wages, salaries, commissions, and other
compensation related to business income included in
the return.
Total payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
3 Total percentage (sum of the percentages in column (c)) 123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
123456789012345678901234567890121234567890
4 Average apportionment percentage (1/2 of line 3). 123456789012345678901234567890121234567890
Enter here and on Worksheet V, Section B, line 4 . . . . . . 123456789012345678901234567890121234567890
Note: The average apportionment percentage shown on line 4 represents the portion of the taxpayer’s total business that is attributable to activities
conducted within the TTA. Also, those factors with zero balances in the totals of column (a) will not be included in the computation of the average
apportionment percentage. For example, if the taxpayer does not have any payroll within or outside the TTA, then the average apportionment
percentage would be computed by dividing line 3 by one (instead of by two as normally instructed).

Page 12 FTB 3809 Booklet 1999


Part V Net Operating Loss (NOL) NOL Carryover Amount – Nonapportioning The first step is to determine which portion of
Corporations Operating Totally Within the taxpayer’s net income is “business
Computation and Loss Limitations the TTA income” and which portion is “nonbusiness
A TTA NOL generated by a business that For taxpayers with all payroll and property income,” since only business income may be
operates or invests within the TTA can be within the TTA, the NOL carryover is deter- apportioned to the TTA. See Part IV, Doing
carried forward for 15 years but may not be mined by computing the business loss that Business Totally Within the Targeted Tax Area
carried back. In addition, up to 100% of the results from business activity within the TTA. or Within and Outside the Targeted Tax Area,
NOL generated in the TTA can be carried NOL Carryover Amount – Corporations on page 10 for a complete discussion of
forward. Operating Within and Outside the TTA business and nonbusiness income.
The business cannot generate NOLs from If the business is located within and outside Business income or loss reported on
activities within the TTA until the first taxable the TTA, the loss amount available for Schedules C, C-EZ, E, F, and other schedules
or income year beginning on or after the date carryover is determined by apportioning the are reported on line 6 through line 9. Line 11
the TTA is officially designated. The TTA total business loss of the corporation to the and line 12 report business gains or losses
received final designation on TTA pursuant to the provisions of R&TC reported on Schedule D and Schedule D-1. All
November 1, 1998. Chapter 17 (commencing with Section business income and losses should be
25101), with certain modifications to the adjusted for any differences between
Limitation. A TTA NOL deduction can offset apportioning factors. The apportionment California and federal amounts as shown on
only business income attributable to opera- factors include the property and payroll the Schedule CA (540 or 540NR).
tions within the TTA. factors, and compare TTA property and Loss Computation (Use to compute TTA NOL
Election. Taxpayers must elect and designate payroll to total property and payroll. This for Worksheet V, Section A)
the carryover category (general or specific, apportionment factor calculation is done on
enterprise zone, LAMBRA, or TTA NOL) on the Worksheet IV, Section B. The loss carryover is Line 6 – Line 9
original return for the year of a loss and file deducted from income apportioned by each If your business operation reported on
form FTB 3809 for each year in which a TTA business to the TTA in subsequent years. This Schedule C, C-EZ, E, F, or other schedule is
NOL deduction is being taken. The election is calculation is done on Worksheet V, Section C. entirely within the TTA, enter the income or
irrevocable. loss from this activity in column (a), and enter
Corporations that are members of a unitary 1.00 in column (b).
Note: If you elect the TTA NOL deduction, you group filing a combined report must sepa-
are prohibited by law from carrying over any rately compute loss carryover for each Line 11 and Line 12
other type of NOL from this year. corporation in the group (R&TC If the gain or loss reported on Schedule D or
Section 25108) using their individual Schedule D-1 (as adjusted on Schedule CA
To determine which type of NOL will provide (540 or 540NR)) was attributed to an asset
the greatest benefit, businesses that have apportionment factors.
used in an activity conducted entirely within
general or specific, enterprise zone, LAMBRA, Unlike the NOL treatment on a federal the TTA, enter the gain or loss reported in
or TTA NOLs, or that may qualify for the consolidated return, a loss carryover for one column (a), and enter 1.00 in column (b).
special NOL treatment should estimate future member included in a combined report may
income and complete Worksheet V and the not be applied to the intrastate apportioned Line 6 – Line 9
following forms or worksheets if applicable: income of another member included in a If your business operation reported on
combined report. Schedule C, C-EZ, E, F, or other schedule is
• FTB 3805Q, Net Operating Loss (NOL) within and outside the TTA, enter the income
Computation and NOL and Disaster Loss For water’s-edge purposes, each corporation’s or loss from this activity in column (a). To
Limitations — Corporations; NOL carryover is limited to the amount determine the percentage figure in
• FTB 3805V, Net Operating Loss (NOL) determined by recomputing the income and column (b), complete Worksheet IV,
Computation and NOL and Disaster Loss factors of the original worldwide combined Section B. Enter the figure on Worksheet IV,
Limitations — Individuals, Estates and reporting group as if the water’s-edge election Section B, line 4, in column (b) of this
Trusts; had been in force for the year of the loss. The worksheet.
• FTB 3805Z, Enterprise Zone Business TTA NOL carryover may not be increased as a
Booklet, Worksheet VI; or result of the recomputation. Line 11 and Line 12
• FTB 3807, Local Agency Military Base If the gain or loss reported on Schedule D or
Recovery Area Business Booklet, Instructions for Income or Loss Schedule D-1 (as adjusted on Schedule CA
Worksheet V. (540 or 540NR)) was attributed to an asset
Worksheet used in an activity conducted within and
Alternative Minimum Tax. Taxpayers claiming outside the TTA, enter the gain or loss
a TTA NOL deduction must determine their Use the Income or Loss Worksheet on the reported in column (a). To determine the
NOL for alternative minimum tax purposes. following page to determine the amount to percentage figure in column (b), complete
Use Schedule P (100, 540, 540NR, or 541) to enter on: Worksheet IV, Section B. Enter the figure on
compute the NOL for alternative minimum tax • Worksheet V, Section A, line 1; Worksheet IV, Section B, line 4, in column (b)
purposes. • Worksheet V, Section C, line 1 and line 6 of this worksheet.
S Corporations. TTA NOLs incurred prior to (Form 540 and Form 540NR filers); and Income Computation (Use to compute TTA
becoming an S corporation cannot be used • Worksheet VI, Part I, line 1 and line 3. income for Worksheet V, Section C and
against S corporation income. See IRC Do not include disaster losses in any amounts Worksheet VI)
Section 1371(b). used in the table. Line 6 – Line 9
However, an S corporation is allowed to Only California source business income is If your business operation reported on
deduct a TTA NOL incurred after the “S” apportioned to the TTA. A taxpayer's TTA Schedule C, C-EZ, E, F, or other schedule is
election is made. An S corporation may use business income is its California apportioned entirely within the TTA, enter the income or
the NOL as a deduction against income business income computed using Schedule R, loss from this activity within column (a), and
subject to the 1.5% entity-level tax (3.5% for multiplied by the specific TTA apportionment enter 1.00 in column (b).
financial S corporations). The expenses (and percentage computed using Worksheet IV,
income) giving rise to the loss are also Section A.
passed through to the shareholders in the
year the loss is incurred.

FTB 3809 Booklet 1999 Page 13


Line 11 and Line 12 Line 11 and Line 12 Part III Taxpayer’s Trade or
If the gain or loss reported on Schedule D or If the gain or loss reported on Schedule D or
Schedule D-1 (as adjusted on Schedule CA Schedule D-1 (as adjusted on Schedule CA Business
(540 or 540NR)) was attributed to an asset (540 or 540NR)) was attributed to an asset Business Income or Loss
used in an activity conducted entirely within used in an activity conducted within and Use business income or loss from Form 1040
the TTA, enter the gain or loss reported in outside the TTA and California, get Schedules C, C-EZ, E, and F, plus California
column (a), and enter 1.00 in column (b). Schedule R and complete Schedule R-1. adjustments from Schedule CA (540 or
Line 6 – Line 9 Multiply the gain or loss reported by the 540NR) for each trade or business. Also,
If your business operation reported on percentage on Schedule R-1, line 5 and enter include business capital gains and losses
Schedule C, C-EZ, E, F, or other schedule is the result in column (a). To determine the from Schedule D and business gains and
entirely within California, enter the income or percentage figure in column (b), complete losses from Schedule D-1.
loss from this activity in column (a). To Worksheet IV, Section A. Enter the figure on Line 14
determine the percentage figure in Worksheet IV, Section A, line 4 in column (b) If you are computing the TTA NOL and the
column (b), complete Worksheet IV, of this worksheet. result on the Income or Loss Worksheet,
Section A. Enter the figure on Worksheet IV, line 14, column (c) is a negative amount,
Section A, line 4, in column (b) of this Part I Individual Income and enter this amount on Worksheet V, Section A,
worksheet. Expense Items line 1. Note: If the amount is positive, you do
Line 11 and Line 12 Wages not have a TTA NOL.
If the gain or loss reported on Schedule D or Taxpayers with wages from a company If you are computing the TTA business
Schedule D-1 (as adjusted on Schedule CA located within and outside the TTA must income and the result on the Income or Loss
(540 or 540NR)) was attributed to an asset determine the TTA wage income by entering Worksheet, line 14, column (c) is a positive
used in an activity conducted entirely within the percentage of their time in column (b) amount and:
California, enter the gain or loss reported in (during the period for which the wages • You have TTA NOL carryovers, enter the
column (a). To determine the percentage entered on line 1 were earned) that they amount on Worksheet V, Section C, line 1
figure in column (b), complete Worksheet IV, worked within the TTA. This percentage must and line 6 (skip line 2 through line 5). Also
Section A. Enter the figure on Worksheet IV, be determined based on their record of time enter the amount from the Income or Loss
Section A, line 4 in column (b) of this and events such as a travel log or entries in a Worksheet, line 14, column (c) on
worksheet. daily planner. Worksheet VI, Part I, line 1 and line 3 (skip
Line 6 – Line 9 line 2) if you have TTA credits; or
If your business operation reported on Part II Pass-Through Income or • You do not have TTA NOL carryovers but
Schedule C, C-EZ, E, F, or other schedule is Loss you do have TTA credits or credit
within and outside the TTA and California, get carryovers, enter the amount on Work-
Multiple Pass-Through Entities
Schedule R and complete line 1 through sheet VI, Part I, line 1 and line 3 (skip
If you are a shareholder, beneficiary, partner,
line 13b. Enter the figure on Schedule R, line 2).
or member in multiple pass-through entities
line 13b in column (a) of this worksheet. To Note: If the amount is negative, you do not
with businesses located within and outside
determine the percentage figure in have any business income attributable to the
the TTA from which you received TTA tax
column (b), complete Worksheet IV, TTA and you cannot utilize any TTA NOL
incentives, see the example below for
Section A. Enter the figure on Worksheet IV, carryover, credit(s), or credit carryover(s) in
computing business income in the TTA.
Section A, line 4 in column (b) of this the current taxable or income year.
worksheet. Trade or
business
Note: When computing Schedule R, disregard income
any reference to Form 100, Form 565, or from
Schedule K-1 Entity’s TTA TTA
Form 568. Also, disregard any reference to Pass-through (100S, 541, apportionment apportioned
Schedule R-3, Schedule R-4, or entity 565, or 568) percentage income
Schedule R-5, and skip line 11. ABC, Inc. $40,000 80% $32,000
A, B & C 30,000 10% 3,000
Nonresidents that have an apportioning ABC, LLC 10,000 50% 5,000
business that operates within the TTA should $40,000
have already computed Schedule R, and can
use those amounts when that schedule is
referenced. Residents that have an apportion-
ing business will not have completed a
Schedule R for California income tax
purposes since they are taxed on income from
all sources. However, in order for residents to
determine their California source business
income for purposes of the TTA calculation,
they must complete a Schedule R also.

Page 14 FTB 3809 Booklet 1999


Income or Loss Worksheet — Targeted Tax Area
Part I Individual Income and Expense Items. See instructions.
(a) (b) (c)
Amount % of time providing services in Apportioned amount
the TTA (a) x (b)

1 Wages . . . . . . . . . . . . . . . . . . . . . . . . .

2 Employee business expenses . . . . . . .

3 Subtotal: Enter the total of line 1, column (c) and line 2, column (c) in column (c), this line . . . . . . . . . . . . .

Part II Pass-Through Income or Loss. See instructions.


(a) (b)
Name of entity Distributive or pro-rata share of business income or loss apportioned
to the TTA from Schedule K-1 (100S, 541, 565, or 568) including
capital gains and losses

5 Subtotal: Enter the total of line 4, column (b) in column (b), this line . .

Part III Taxpayer’s Trade or Business. See instructions.


(a) (b) (c)
Business income or loss Apportionment % Apportioned income or loss
for the TTA (a) x (b)

6 Schedule C or C-EZ . . . . . . . . . . . . . . .

7 Schedule E (Rentals) . . . . . . . . . . . . .

8 Schedule F . . . . . . . . . . . . . . . . . . . . .

9 Other business income or loss . . . . . .

10 Subtotal: Enter the total of line 6 through line 9, column (c) in column (c), this line . . . . . . . . . . . . . . . . . . . .
(a) (b) (c)
Business gain Apportionment % Apportioned gain or loss
or loss for the TTA (a) x (b)

11 Schedule D . . . . . . . . . . . . . . . . . . . . .

12 Schedule D-1 . . . . . . . . . . . . . . . . . . .

13 Subtotal: Enter the total of line 11, column (c) and line 12, column (c) in column (c), this line . . . . . . . . . . .
14 Total: Enter the total of column (c) for line 3, line 10, and line 13, and line 5, column (b)
in column (c), this line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FTB 3809 Booklet 1999 Page 15


Instructions for Worksheet V — You must complete form FTB 3805Q, Net Line 7 – Enter the amount from line 6 in
Operating Loss (NOL) Computation and NOL column (d). If this amount is zero or negative,
Net Operating Loss Computation and Disaster Loss Limitations — Corpora- transfer the amount from line 8, column (b) to
and Loss Limitations tions, before you can compute the allowable line 8, column (e). Go to line 9.
TTA loss. Line 8 – Enter the amounts as positive
Individuals and exempt trusts with a current numbers.
year loss should complete Section A. Section C – Computation of In column (c), enter the smaller of the amount
Corporations with a current year loss NOL Carryover and Carryover
complete Section B. Individuals, exempt in column (b) or the amount on line 7,
trusts, and corporations with current year Limitations column (d).
income and a prior year TTA NOL carryover Use this section to compute the TTA NOL In column (d), enter the result of subtracting
complete Section C. deduction for individuals, exempt trusts, and column (c) from the amount on line 7,
corporations. The TTA NOL deduction is used column (d).
Section A – Computation of to reduce current year income from the TTA. In column (e), enter the result of subtracting
Current Year NOL — Individuals Line 1 – See Part IV for a discussion of the amount in column (c) from the amount in
business and nonbusiness income. column (b).
and Exempt Trusts
Note to Form 540 and Form 540NR filers: Example:
Use this section to compute the TTA NOL to
be carried over to future years by individuals Be sure to include casualty losses, disaster
(b) Carry- (c) Amount (d) Balance (e)
and exempt trusts. Complete Section A only if losses, and any business deductions reported over from deducted available to TTA NOL
you have a current year loss. on Schedule A as itemized deductions. 12345678901234567
prior year this year
12345678901234567
offset losses 123456789
carryover
123456789
You must complete form FTB 3805V, Net
Exception: If you elected to carry back part or 12345678901234567 $5,000 123456789
all of your current year disaster loss under $ 500 $ 500 4,500 $ 0
Operating Loss (NOL) Computation and NOL IRC Section 165(i)(1), do not include the
and Disaster Loss Limitations — Individuals, amount of the loss that was carried back in Line 9 – Enter the amount of your current
Estates and Trusts, before you can compute your current year business income for year NOL in column (e). For individuals and
the allowable TTA loss. the TTA. exempt trusts, enter the amount from
To compute the TTA NOL, separate business Section A, line 7. For corporations, enter the
Line 2 – In modifying your income, deduct amount from Section B, line 7.
income and deductions from nonbusiness your capital losses only up to your capital
income and deductions. See Part IV for a gains. Enter as a positive number any net Line 10 – Total the amounts in column (b),
complete discussion of business and capital losses included in line 1. column (c), and column (e). Enter the totals
nonbusiness income. from column (b), column (c), and column (e)
Line 3 – Corporations must reduce income by
on form FTB 3809, Side 1, line 3a, line 3b,
Section B – Computation of the disaster loss deduction and the deduction
and line 3c, accordingly.
for excess net passive income.
Current Year NOL — Line 6 – This is your modified taxable income
Your TTA NOL deduction for 1999 is the total
of column (c). Enter this amount on your
Corporations (MTI). You may reduce this amount by your
California tax return or schedule as follows:
Use this section to compute the TTA NOL to TTA NOL deduction. Your TTA NOL deduction
may not be larger than your MTI. If your MTI • Form 100, line 20;
be carried over to future years for corpora-
is a loss in the current year or if it limits the • Form 100S, line 19;
tions. Complete Section B only if the
corporation has a current year loss. amount of NOL you may use this year, you • Form 109, line 3 or line 11;
must carry over the NOL to future years. • Schedule CA (540), line 21e, column B; or
• Schedule CA (540NR), line 21e, column B.

Worksheet V Net Operating Loss (NOL) — Targeted Tax Area


Section A Computation of Current Year Net Operating Loss — Individuals and Exempt Trusts
1 Net trade or business loss from all sources. Individuals: Enter the total from the Income or Loss Worksheet, line 14,
column (c) (page 15) as a positive number. For purposes of this worksheet section, do not include any 1999 losses
or disaster loss carryovers in line 1. See instructions for definition of business income (page 10). Exempt Trusts:
Enter the amount from Form 109, line 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Total business capital losses included in line 1. Enter as a positive number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 Total business capital gains included in line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 If line 2 is greater than line 3, enter the difference as a positive number; otherwise enter -0- . . . . . . . . . . . . . . . . . . . . . . 4
5 Subtract line 4 from line 1. If the result is zero or less, do not complete the rest of this section. You do not have a
current year NOL from the TTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6 Enter the amount from form FTB 3805V, Part I, Section A, line 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7 Enter the smaller of line 5 or line 6 here and in Section C, line 9, column (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
This is the TTA NOL carryover from 1999 to 2000.

Page 16 FTB 3809 Booklet 1999


Worksheet V ( continued)
Section B Computation of Current Year Net Operating Loss — Corporations
Note: If you have a TTA NOL and a prior year general NOL, see instructions on page 13.
During the year the corporation incurred the NOL, the corporation was a: 첸 C corporation 첸 S corporation 첸 Exempt corporation
1 Net loss for state purposes from Form 100, line 17; Form 100S, combined amounts of line 15 and line 17; or
Form 109, line 1. Enter as a positive number. Note: Apportioning corporations, enter the amount from
Schedule R, line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 a 1999 disaster relief loss included in line 1. Enter as a positive number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a
b Nonbusiness income included in line 1. Enter as a negative number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b
c Nonbusiness losses included in line 1. Enter as a positive number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c
d Combine line 2a through line 2c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2d
3 Subtract line 2d from line 1. If zero or less, do not complete the rest of this section; the corporation does not have
a current year NOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 Enter the average apportionment percentage from Worksheet IV, Section B, line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5 Multiply line 3 by line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6 Enter the amount from form FTB 3805Q, Part I, line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7 Enter the smaller of line 5 or line 6 here and in Section C, line 9, column (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
This is the TTA NOL carryover from 1999 to 2000.

Section C Computation of NOL Carryover and Carryover Limitations — Individuals, Exempt Trusts, and Corporations.1234567890123456789012 See instructions.
1 Enter the amount from Form 100, line 17; Form 100S, combined amounts of line 15
1234567890123456789012
1234567890123456789012
1234567890123456789012
1234567890123456789012
and line 17; or Form 109, line 1 or line 10. Form 540 and Form 540NR filers, enter the 1234567890123456789012
1234567890123456789012
total from the Income or Loss Worksheet, line 14, column (c) (page 15) on line 1 and 1234567890123456789012
1234567890123456789012
line 6 (skip line 2 through line 5). See instructions. Note: Apportioning corporations, 1234567890123456789012
1234567890123456789012
enter the amount from Schedule R, line 13b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1234567890123456789012
1234567890123456789012
2 a Form 100, Form 100S, and Form 109 filers: Enter any nonbusiness income included 1234567890123456789012
1234567890123456789012
in line 1 as a negative number. Form 540 and Form 540NR filers leave blank . . . . . . 2a 1234567890123456789012
1234567890123456789012
1234567890123456789012
b Form 100, Form 100S, and Form 109 filers: Enter any nonbusiness loss included in 1234567890123456789012
1234567890123456789012
line 1 as a positive number. Form 540 and Form 540NR filers leave blank . . . . . . . . . 2b 1234567890123456789012
1234567890123456789012
1234567890123456789012
c Combine line 2a and line 2b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2c 1234567890123456789012
1234567890123456789012
3 Form 100 filers: Enter the amount from Form 100, line 21. Form 100S filers: Enter the 1234567890123456789012
1234567890123456789012
total of the amount from Form 100S, line 17 and line 20. Form 540, Form 540NR, 1234567890123456789012
1234567890123456789012
1234567890123456789012
and Form 109 filers: Enter -0-. Enter this amount as a negative number . . . . . . . . . . . . . 3 1234567890123456789012
1234567890123456789012
4 Combine line 1, line 2c, and line 3. If zero or less, enter -0- on line 6 . . . . . . . . . . . . . . . 4 1234567890123456789012
1234567890123456789012
5 Enter the average apportionment percentage from Worksheet IV, Section A, line 4 . . . . . 5 1234567890123456789012
6 Modified taxable income. Multiply line 4 by line 5. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

(a) (b) (c) (d) (e)


Description Carryover from Amount deducted Balance available to TTA NOL carryover
123456789012345678901234567890121234
prior year
123456789012345678901234567890121234
this year offset losses 123456789012345678
123456789012345678
123456789012345678901234567890121234 123456789012345678
123456789012345678901234567890121234 123456789012345678
7 Modified taxable income from line 6 . . . . . . 123456789012345678901234567890121234
123456789012345678901234567890121234 123456789012345678
123456789012345678
8 TTA NOL carryover beginning in 1998. Only
for taxable or income years beginning on or
after November 1, 1998. See instructions . . 123456789012345678901234567890121234
123456789012345678901234567890121234
9 TTA NOL carryover beginning in 1999. 123456789012345678901234567890121234
123456789012345678901234567890121234
12345678901234567890123456789012123412345678901234567
See instructions . . . . . . . . . . . . . . . . . . . . . . 123456789012345678901234567890121234
12345678901234567
12345678901234567
10 Total the amounts in column (b), column (c), 12345678901234567
and column (e). See instructions . . . . . . . . 12345678901234567

FTB 3809 Booklet 1999 Page 17


Part VI Computation of Credit tax credits. If form FTB 3809 is not attached
to the return, the credits may be disallowed.
Part I
Limitations Shareholders should attach Schedule(s) K-1
Note: For filers with NOLs or NOL carryovers.
(100S), Shareholder’s Share of Income, • Complete Worksheet V first if you have a
Credit Limitations. The amount of credit you
Deductions, Credits, etc., to their individual current year NOL or an NOL carryover.
can claim on your California tax return is
tax returns. • Then complete Worksheet VI if you have
limited by the amount of tax attributable to
any TTA credits.
TTA income. Use Worksheet VI on form Carryover. If the amount of credit available this
FTB 3809, Side 2 to compute this limitation. year exceeds your tax, you may carry over any If you do not have a current year NOL or any
excess credit to future years until exhausted. NOL carryovers:
If a taxpayer owns an interest in a disregarded
business entity, the amount of the credit that Apply the carryover to the earliest taxable or • Individuals: Go to the Income or Loss
can be utilized is limited to the difference income year(s) possible. In no event can the Worksheet in Part V. Follow the instruc-
between the taxpayer's regular tax computed credit be carried back and applied against a tions there. Enter the amount from the
with the income of the disregarded entity, and prior year’s tax. Income or Loss Worksheet, line 14,
the taxpayer's regular tax computed without For S corporations, the amount of the 1/3 column (c) on Worksheet VI, Part I, line 1
the income of the disregarded entity. For more credit that is in excess of the 1.5% entity-level and line 3 (skip line 2).
information on disregarded business entities, tax (3.5% for financial S corporations) in the • Corporations: Follow the instructions for
get Form 568, Limited Liability Company Tax current year may also be carried forward and line 1 below.
Booklet. used in future years to offset the S corpora- Line 1 – Enter all trade or business income.
Partnerships must allocate the credit among tion entity-level tax. See the instructions for See Part IV on page 10 for the definition of
the partners according to the partner's Worksheet VI, Part III for more information. business income.
distributive share as determined in a written Credit Code Number. You must use credit Line 2 – If your business is located entirely
partnership agreement (R&TC code number 210 to claim the TTA hiring and within the TTA, enter 1.
Section 17039(e)). sales or use tax credits on your return. Using Specifically, this percentage is the apportion-
Credits you are otherwise eligible to claim may an incorrect code number may cause a delay ment percentage computed by the entity using
be limited. Do not apply credits against the in allowing the credit(s). Worksheet IV, Apportionment, and represents
minimum franchise tax (corporations, limited the percentage of the entity’s business
partnerships, limited liability partnerships, Instructions for Worksheet VI attributable to the TTA.
LLCs, and S corporations), the alternative — Computation of Credit Line 6a – Compute the tax as if the TTA taxable
minimum tax (corporations, exempt organiza-
tions, individuals, and fiduciaries), the built-in
Limitations income represented all of your taxable income.
gains tax (S corporations), or the excess net Individuals: Use the tax table or tax rate
Note: Worksheet VI is on Side 2 of form schedule in your tax booklet for your filing
passive income tax (S corporations). FTB 3809. status. Exempt organizations: Use the
Refer to the credit instructions in your tax Partnerships and LLCs taxed as partnerships do applicable tax rate in your tax booklet.
booklet for more information. not complete Worksheet VI. The partners and Corporations and S corporations: Use the
Members of a Unitary or Combined Group. members of these types of entities should applicable tax rate.
The TTA credits cannot be allocated or complete Worksheet VI in order to determine the Example (Determination of TTA Income for
otherwise transferred to another taxpayer, amount of TTA credits that they may claim on Shareholders, Partners, or Members of
even if the other taxpayer is a member of a their California tax return. S corporations and Pass-Through Entities):
unitary or combined group or otherwise their shareholders must complete Worksheet VI.
affiliated with the taxpayer that earned the Ray Smith is vice president of ABC, Inc., an
Reporting Requirements of S Corporations, S corporation that has two locations: one
credit. For example, a subsidiary corporation Estates or Trusts, Partnerships, and LLCs
that generates a TTA hiring credit cannot within the TTA and one outside the TTA. Eighty
Taxed as Partnerships percent (80%) of the S corporation’s business
allocate the credit to the parent corporation.
• Report to shareholders, beneficiaries, is attributable to the TTA. (Note: This percent-
S Corporations and the Application of partners, and members, the distributive or age was determined by ABC, Inc. using
Targeted Tax Area Credits. An S corporation pro-rata share of business income, losses, Worksheet IV when ABC’s S corporation return
may use its TTA credits to reduce TTA tax at and deductions apportioned to the TTA; (Form 100S) was prepared.) Ray divides his
both the corporate and shareholder levels. and time equally (50%/50%) between the two
An S corporation may use 1/3 of the TTA cred- • Separately state any distributive or pro- offices of ABC, Inc.
its, to reduce the tax on the S corporation’s rata share of business capital gains and Mary Smith (Ray’s spouse) works for ABC,
TTA income. In addition, S corporation share- losses apportioned to the TTA included in Inc. at its office located within the TTA.
holders may claim their pro-rata share of the the amount above.
entire amount of the TTA credits calculated Ray and Mary Smith have the following 1999
S corporations: Complete only Part I and items of California income and expense:
under the Personal Income Tax Law. Part III of this worksheet if your entity-level
Example: In 1999, an S corporation qualified tax before credits is more than the minimum Ray’s salary from ABC, Inc. . . . . . . $100,000
for a $3,000 TTA hiring credit. The franchise tax. Mary’s salary from ABC, Inc. . . . . . . . 75,000
S corporation will be able to use 1/3 of the Interest on savings account . . . . . . . . . 1,000
Corporations and S corporations subject to Dividends . . . . . . . . . . . . . . . . . . . . . . . 3,000
credit ($3,000 x 1/3 = $1,000) to offset the the minimum franchise tax only: Complete
tax on the corporation’s TTA income. Schedule K-1 (100S) from ABC, Inc.:
only Part IV of this worksheet. Ordinary income . . . . . . . . . . . . . . . . 40,000
The S corporation will also pass-through a All others: Complete Part I and Part II of this TTA business expense deduction . . (5,000)*
$3,000 credit to its shareholders to offset worksheet. Ray’s unreimbursed employee
their individual tax (computed under the expenses from Schedule A . . . . . . . (2,000)
Personal Income Tax Law) on TTA income.
*The TTA business expense deduction is a
S corporations should attach form FTB 3809 separately stated item on Schedule K-1
to Form 100S, California S Corporation (100S), line 8.
Franchise or Income Tax Return, to claim the

Page 18 FTB 3809 Booklet 1999


The Smith’s TTA income (total amount to be Line 8A, column (f) – Enter the amount of carried over to future years. In this case, enter
reported on line 3) is computed as follows: credit that is used on Schedule P (100, 540, the amount from line 9B, column (d) on
Ray’s TTA salary ($100,000 x 50%) . $50,000 540NR, or 541), column (b). The amount line 9B, column (g).
Mary’s TTA salary ($75,000 x 100%) . 75,000 cannot be greater than the amount on line 8A, Line 9A, column (f) – Enter the amount of
Pass-through ordinary income from column (e) or the amount computed on credit that is used on Schedule P (100, 540,
ABC, Inc. ($40,000 x 80%) . . . . . . . 32,000 line 8B, column (d). Enter this amount on 540NR, or 541), column (b). The amount
TTA business expense deduction form FTB 3809, Side 1, line 1a. cannot be greater than the amount on line 9A,
from ABC, Inc. . . . . . . . . . . . . . . . . (5,000) Line 8B, column (b) – Enter the amount of column (e) or the amount computed on
Ray’s unreimbursed employee business the current year credit that was computed on line 9B, column (d). Enter this amount on
expenses ($2,000 x 50%) . . . . . . . (1,000) Worksheet I, Section A, line 4. form FTB 3809, Side 1, line 1b.
Total TTA income Line 8B, column (c) – Enter the amount of the Line 9B, column (b) – Enter the amount of
(Worksheet VI, Part I, line 3) . . . $151,000 total prior year credit carryover. This is the the current year credit that was computed on
Note: The standard deduction and personal or amount of credit that was previously figured Worksheet II, line 2, column (c).
dependency exemptions are not included in on Worksheet I, Section A, in the prior year, Line 9B, column (c) – Enter the amount of
the computation of TTA income since they are minus the amount that was allowed to be taken the total prior year credit carryover. This is the
not related to trade or business activities. on the prior year return. amount of credit that was previously figured
Ray and Mary must compute the tax (to be Line 8B, column (d) – Add the amount of the on Worksheet II in the prior year, minus the
entered on Worksheet VI, Part I, line 6a) on current year credit on line 8B, column (b) and amount that was allowed to be taken on the
the total TTA income of $151,000 (as if it the amount of the total prior year carryover on prior year return.
represents all of their income). Using the tax line 8B, column (c). Line 9B, column (d) – Add the amount of the
rate schedule in their tax booklet for filing Line 8B, column (e) – Compare the amounts current year credit on line 9B, column (b) and
status married filing joint, the 1999 tax on line 8A, column (e) and line 8A, the amount of the total prior year carryover on
figured on $151,000 is $10,659. column (f). Enter the smaller amount. line 9B, column (c).
Line 6b – Corporations and S corporations: Line 8B, column (g) – Subtract the amount Line 9B, column (e) – Compare the amounts
If the amount on line 6b is the minimum on line 8B, column (e) from the amount on on line 9A, column (e) and line 9A,
franchise tax ($800), you cannot use your TTA line 8B, column (d). Enter the result on column (f). Enter the smaller amount.
credits this year. You should complete Part IV line 8B, column (g). This is the amount of
of the worksheet to figure the amount of Line 9B, column (g) – Subtract the amount
credit that can be carried over to future years. on line 9B, column (e) from the amount on
credit carryover. Note: This carryover includes both the line 9B, column (d). Enter the result on
Schedule P (100, 540, 540NR, or 541)
Part II limitation and the limitation based on TTA
line 9B, column (g). This is the amount of
credit that can be carried over to future years.
Use Part II if you are a corporation, individual, business income. Note: This carryover includes both the
estate, or trust. Corporations and S corpora- Line 9A, column (e) – Subtract the amount Schedule P (100, 540, 540NR, or 541)
tions that are subject to paying only the on line 8B, column (e) from the amount on limitation and the limitation based on TTA
minimum franchise tax, go to Part IV. line 8A, column (e). If the result is zero, your business income.
Line 8A, column (e) – Enter the amount from remaining credits are limited and must be
line 7. This is the amount of limitation based
on the tax on TTA business income.

Example: Part II
The ABC Business has $8,000 of tax. The business computed a credit limitation based on the TTA income of $7,000 on Worksheet VI, line 7.
The business has the following credits:
Hiring credit — $500 and a $300 carryover from a prior year
Sales or use tax credit — $9,000
Worksheet VI, Part II would be computed as follows:

Part II Limitation of Credits for Corporations, Individuals, and Estates and Trusts. See instructions.
(a) (b) (c) (d) (e) (f) (g)
Credit Credit Total Total credit Limitation Used on Schedule P Carryover
name amount prior year (add col. (b) based on (can never be greater (col. (d) minus
12345678901234567890123456789012123
carryover and col. (c)) TTA business income
12345678901234567890123456789012123
than col. (d) or col. (e)) 123456789012345678
col. (e))
123456789012345678
12345678901234567890123456789012123 123456789012345678
A 12345678901234567890123456789012123
12345678901234567890123456789012123 7,000 12345678901234567
800 123456789012345678
123456789012345678
8 Hiring credit 12345678901234567
12345678901234567
B 500 300 800 800 12345678901234567
12345678901234567 –0–
12345678901234567890123456789012123
12345678901234567890123456789012123 123456789012345671123456789012345678
23456789012345678
12345678901234567890123456789012123 123456789012345678
9 Sales or use A 12345678901234567890123456789012123
12345678901234567890123456789012123
12345678901234567890123456789012123
6,200 6,200
12345678901234567
123456789012345678
123456789012345678
123456789012345678
tax credit 12345678901234567
12345678901234567
B 9,000 –0– 9,000 6,200 12345678901234567 2,800
12345678901234567

FTB 3809 Booklet 1999 Page 19


Part III Line 10 and Line 11, column (d) – Enter the Part IV
amounts of total prior year credit carryover.
Use Part III only if you are an S corporation. Use Part IV if you are a corporation or
These are the credit amounts that were
Line 10 and Line 11, column (b) – Enter the previously figured on the prior year Work- S corporation subject to paying only the
amounts of current year credits that were sheet I and Worksheet II, minus the amounts minimum franchise tax.
computed on Worksheet I and Worksheet II in that were allowed to be taken on the prior Line 12 and Line 13, column (b) – Enter the
column (b) for line 10 and line 11, as year return. amounts of current year credits that were
applicable. Also enter this amount on computed on Worksheet I and Worksheet II.
Line 10 and Line 11, column (e) – Add the
Form 100S: S corporations may enter only 1/3 of the
amounts of the current year credits in
• Schedule C, line 4; and column (c) and the total prior year carryovers amounts from Worksheet I and II on line 12,
• Schedule K, line 13. in column (d). column (b) and line 13, column (b), as
applicable.
You may need to adjust your Schedule C (100S) Line 10 and Line 11, column (f) – Enter the
to reflect the TTA tax limitation (Part I, line 7) to credit amounts that were used by the Line 12 and Line 13, column (c) – Enter the
your credits after completing this worksheet. S corporation in the current year to offset its amounts of the total prior year credit
1.5% entity-level tax (3.5% for financial carryovers. These are the credit amounts that
Line 10 and Line 11, column (c) – Multiply
S corporations). Enter the amounts in were previously figured on Worksheet I and
the amounts on line 10 and line 11,
column (f) for line 10 and line 11 on form Worksheet II in the prior year, minus the
column (b) by 1/3. Enter these amounts in
FTB 3809, Side 1, line 1a and line 1b, as amounts that were allowed to be taken on the
column (c). The amounts in column (c) are
applicable. prior year return. S corporations may enter
the maximum amounts of the current year
only 1/3 of the amounts from Worksheet I and
credits that may be used by the S corporation Line 10 and Line 11, column (g) – Subtract Worksheet II.
to offset its 1.5% entity-level tax (3.5% for the amount in column (f) for each line from
financial S corporations). the amounts in column (e). These are the Line 12 and Line 13, column (d) – Add the
credit amounts that can be carried over to amounts in column (b) and column (c) for
future years and used by the S corporation. line 12 and line 13. These are the credit
amounts that can be carried over to future
years.

Page 20 FTB 3809 Booklet 1999


Code Code
FTB 3809 315230 Women’s & Girls’ Cut & Sew 332900 Other Fabricated Metal
Codes for Principal Business Activity Apparel Mfg Product Mfg
315290 Other Cut & Sew Apparel Mfg Machinery Manufacturing
This list of principal business activities and their associated 315990 Apparel Accessories & Other 333100 Agriculture, Construction, &
Apparel Mfg
codes is designed to classify a business by the type of Mining Machinery Mfg
Leather and Allied Product 333200 Industrial Machinery Mfg
activity in which it is engaged to facilitate the administration Manufacturing 333310 Commercial & Service
of the California Revenue and Taxation Code. For taxable or 316110 Leather & Hide Tanning & Industry Machinery Mfg
Finishing 333410 Ventilation, Heating, Air-
income years beginning on or after January 1, 1998, these 316210 Footwear Mfg (including rubber Conditioning, & Commercial
principal business activity codes are based on the North & plastics) Refrigeration Equipment Mfg
American Industry Classification System published by the 316990 Other Leather & Allied Product 333510 Metalworking Machinery Mfg
Mfg 333610 Engine, Turbine & Power
United States Office of Management and Budget, Wood Product Manufacturing Transmission Equipment Mfg
1997 Edition. 321110 Sawmills & Wood Preservation 333900 Other General Purpose
321210 Veneer, Plywood, & Engi- Machinery Mfg
Caution: For purposes of qualifying for the TTA tax incen- neered Wood Product Mfg Computer and Electronic Product
321900 Other Wood Product Mfg Manufacturing
tives, refer to the Standard Industrial Classification Manual, Paper Manufacturing 334110 Computer & Peripheral
1987 Edition. Equipment Mfg
322100 Pulp, Paper, & Paperboard
Mills 334200 Communications Equipment
Mfg
322200 Converted Paper Product Mfg
334310 Audio & Video Equipment Mfg
Agriculture, Forestry, Fishing Construction Printing and Related Support 334410 Semiconductor & Other
Activities Electronic Component Mfg
and Hunting Code 323100 Printing & Related Support 334500 Navigational, Measuring,
Code Building, Developing, and General Activities Electromedical, & Control
Crop Production Contracting Petroleum and Coal Products Instruments Mfg
111100 Oilseed & Grain Farming 233110 Land Subdivision & Land Manufacturing 334610 Manufacturing & Reproducing
111210 Vegetable & Melon Farming Development 324110 Petroleum Refineries Magnetic & Optical Media
(including potatoes & yams) 233200 Residential Building (including integrated)
Construction Electrical Equipment, Appliance, and
111300 Fruit & Tree Nut Farming 324120 Asphalt Paving, Roofing, & Component Manufacturing
111400 Greenhouse, Nursery, & 233300 Nonresidential Building Saturated Materials Mfg
Construction 335100 Electric Lighting Equipment
Floriculture Production 324190 Other Petroleum & Coal Mfg
111900 Other Crop Farming (including Heavy Construction Products Mfg 335200 Household Appliance Mfg
tobacco, cotton, sugarcane, 234100 Highway, Street, Bridge, & Chemical Manufacturing 335310 Electrical Equipment Mfg
hay, peanut, sugar beet & all Tunnel Construction 325100 Basic Chemical Mfg 335900 Other Electrical Equipment &
other crop farming) 234900 Other Heavy Construction Component Mfg
325200 Resin, Synthetic Rubber, &
Animal Production Special Trade Contractors Artificial & Synthetic Fibers & Transportation Equipment
112111 Beef Cattle Ranching & 235110 Plumbing, Heating, & Air- Filaments Mfg Manufacturing
Farming Conditioning Contractors 325300 Pesticide, Fertilizer, & Other 336100 Motor Vehicle Mfg
112112 Cattle Feedlots 235210 Painting & Wall Covering Agricultural Chemical Mfg 336210 Motor Vehicle Body & Trailer
112120 Dairy Cattle & Milk Production Contractors 325410 Pharmaceutical & Medicine Mfg
112210 Hog & Pig Farming 235310 Electrical Contractors Mfg 336300 Motor Vehicle Parts Mfg
112300 Poultry & Egg Production 235400 Masonry, Drywall, Insulation, & 325500 Paint, Coating, & Adhesive Mfg 336410 Aerospace Product & Parts
112400 Sheep & Goat Farming Tile Contractors 325600 Soap, Cleaning Compound, & Mfg
112510 Animal Aquaculture (including 235500 Carpentry & Floor Contractors Toilet Preparation Mfg 336510 Railroad Rolling Stock Mfg
shellfish & finfish farms & 235610 Roofing, Siding, & Sheet Metal 325900 Other Chemical Product & 336610 Ship & Boat Building
hatcheries) Contractors Preparation Mfg
336990 Other Transportation
112900 Other Animal Production 235710 Concrete Contractors Plastics and Rubber Products Equipment Mfg
Forestry and Logging 235810 Water Well Drilling Contractors Manufacturing
Furniture and Related Product
113110 Timber Tract Operations 235900 Other Special Trade Contrac- 326100 Plastics Product Mfg Manufacturing
113210 Forest Nurseries & Gathering tors 326200 Rubber Product Mfg 337000 Furniture & Related Product
of Forest Products Nonmetallic Mineral Product Manufacturing
113310 Logging Manufacturing Manufacturing Miscellaneous Manufacturing
Fishing, Hunting and Trapping Food Manufacturing 327100 Clay Product & Refractory Mfg 339110 Medical Equipment & Supplies
114110 Fishing 311110 Animal Food Mfg 327210 Glass & Glass Product Mfg Mfg
114210 Hunting & Trapping 311200 Grain & Oilseed Milling 327300 Cement & Concrete Product 339900 Other Miscellaneous
311300 Sugar & Confectionery Product Mfg Manufacturing
Support Activities for Agriculture and Mfg 327400 Lime & Gypsum Product Mfg
Forestry 311400 Fruit & Vegetable Preserving &
115110 Support Activities for Crop
327900 Other Nonmetallic Mineral Wholesale Trade
Specialty Food Mfg Product Mfg
Production (including cotton 311500 Dairy Product Mfg Wholesale Trade, Durable Goods
ginning, soil preparation, Primary Metal Manufacturing 421100 Motor Vehicle & Motor Vehicle
planting, & cultivating) 311610 Animal Slaughtering and 331110 Iron & Steel Mills & Ferroalloy
Processing Parts & Supplies Wholesalers
115210 Support Activities for Animal Mfg 421200 Furniture & Home Furnishing
Production 311710 Seafood Product Preparation & 331200 Steel Product Mfg from
Packaging Wholesalers
115310 Support Activities for Forestry Purchased Steel 421300 Lumber & Other Construction
311800 Bakeries & Tortilla Mfg 331310 Alumina & Aluminum Materials Wholesalers
Mining 311900 Other Food Mfg (including Production & Processing
coffee, tea, flavorings & 421400 Professional & Commercial
211110 Oil & Gas Extraction 331400 Nonferrous Metal (except Equipment & Supplies
seasonings) Aluminum) Production &
212110 Coal Mining Wholesalers
212200 Metal Ore Mining Beverage and Tobacco Product Processing 421500 Metal & Mineral (except
Manufacturing 331500 Foundries Petroleum) Wholesalers
212310 Stone Mining & Quarrying
312110 Soft Drink & Ice Mfg Fabricated Metal Product 421600 Electrical Goods Wholesalers
212320 Sand, Gravel, Clay, & Ceramic
& Refractory 312120 Breweries Manufacturing 421700 Hardware, & Plumbing &
312130 Wineries 332110 Forging & Stamping Heating Equipment & Supplies
Minerals Mining & Quarrying 312140 Distilleries Wholesalers
212390 Other Nonmetallic Mineral 332210 Cutlery & Handtool Mfg
312200 Tobacco Manufacturing 332300 Architectural & Structural 421800 Machinery, Equipment, &
Mining & Quarrying Supplies Wholesalers
213110 Support Activities for Mining Textile Mills and Textile Product Mills Metals Mfg
313000 Textile Mills 332400 Boiler, Tank, & Shipping 421910 Sporting & Recreational
Container Mfg Goods & Supplies Wholesalers
Utilities 314000 Textile Product Mills
421920 Toy & Hobby Goods &
221100 Electric Power Generation, 332510 Hardware Mfg
Apparel Manufacturing Supplies Wholesalers
Transmission & Distribution 332610 Spring & Wire Product Mfg
315100 Apparel Knitting Mills 421930 Recyclable Material Wholesal-
221210 Natural Gas Distribution 332700 Machine Shops; Turned
315210 Cut & Sew Apparel Contrac- Product; & Screw, Nut, & Bolt ers
221300 Water, Sewage & Other tors 421940 Jewelry, Watch, Precious
Systems Mfg
315220 Men’s & Boys’ Cut & Sew 332810 Coating, Engraving, Heat Stone, & Precious Metal
Apparel Mfg Treating, & Allied Activities Wholesalers
421990 Other Miscellaneous Durable
Goods Wholesalers

FTB 3809 Booklet 1999 Page 21


Code Code Code Code
Wholesale Trade, Nondurable Goods Clothing and Clothing Accessories Support Activities for Transportation 523210 Securities & Commodity
422100 Paper & Paper Product Stores 488100 Support Activities for Air Exchanges
Wholesalers 448110 Men’s Clothing Stores Transportation 523900 Other Financial Investment
422210 Drugs & Druggists’ Sundries 448120 Women’s Clothing Stores 488210 Support Activities for Rail Activities (including portfolio
Wholesalers 448130 Children’s & Infants’ Clothing Transportation management & investment
422300 Apparel, Piece Goods, & Stores 488300 Support Activities for Water advice)
Notions Wholesalers 448140 Family Clothing Stores Transportation Insurance Carriers and Related
422400 Grocery & Related Product 448150 Clothing Accessories Stores 488410 Motor Vehicle Towing Activities
Wholesalers 448190 Other Clothing Stores 488490 Other Support Activities for 524140 Direct Life, Health, & Medical
422500 Farm Product Raw Material 448210 Shoe Stores Road Transportation Insurance & Reinsurance
Wholesalers 448310 Jewelry Stores 488510 Freight Transportation Carriers
422600 Chemical & Allied Products 448320 Luggage & Leather Goods Arrangement 524150 Direct Insurance & Reinsur-
Wholesalers Stores 488990 Other Support Activities for ance (except Life, Health &
422700 Petroleum & Petroleum Transportation Medical) Carriers
Products Wholesalers Sporting Goods, Hobby, Book, and 524210 Insurance Agencies &
Music Stores Couriers and Messengers
422800 Beer, Wine, & Distilled Brokerages
451110 Sporting Goods Stores 492110 Couriers
Alcoholic Beverage Wholesal- 524290 Other Insurance Related
ers 451120 Hobby, Toy, & Game Stores 492210 Local Messengers & Local Activities
451130 Sewing, Needlework, & Piece Delivery
422910 Farm Supplies Wholesalers Funds, Trusts, and Other Financial
422920 Book, Periodical, & Newspaper Goods Stores Warehousing and Storage Vehicles
Wholesalers 451140 Musical Instrument & Supplies 493100 Warehousing & Storage 525100 Insurance & Employee Benefit
422930 Flower, Nursery Stock, & Stores (except lessors of Funds
Florists’ Supplies Wholesalers 451211 Book Stores miniwarehouses & self-
storage units) 525910 Open-End Investment Funds
422940 Tobacco & Tobacco Product 451212 News Dealers & Newsstands (Form 1120-RIC)
Wholesalers 451220 Prerecorded Tape, Compact 525920 Trusts, Estates, & Agency
422950 Paint, Varnish, & Supplies Disc, & Record Stores Information Accounts
Wholesalers General Merchandise Stores Publishing Industries 525930 Real Estate Investment Trusts
422990 Other Miscellaneous 452110 Department stores 511110 Newspaper Publishers (Form 1120-REIT)
Nondurable Goods Wholesal- 452900 Other General Merchandise 511120 Periodical Publishers 525990 Other Financial Vehicles
ers Stores 511130 Book Publishers
Miscellaneous Store Retailers 511140 Database & Directory Real Estate and Rental and
Retail Trade Publishers Leasing
453110 Florists
Motor Vehicle and Parts Dealers 511190 Other Publishers
453210 Office Supplies & Stationery Real Estate
441110 New Car Dealers Stores 511210 Software Publishers
531110 Lessors of Residential
441120 Used Car Dealers 453220 Gift, Novelty, & Souvenir Motion Picture and Sound Recording Buildings & Dwellings
441210 Recreational Vehicle Dealers Stores Industries 531120 Lessors of Nonresidential
441221 Motorcycle Dealers 453310 Used Merchandise Stores 512100 Motion Picture & Video Buildings (except
441222 Boat Dealers 453910 Pet & Pet Supplies Stores Industries (except video rental) Miniwarehouses)
441229 All Other Motor Vehicle 453920 Art Dealers 512200 Sound Recording Industries 531130 Lessors of Miniwarehouses &
Dealers 453930 Manufactured (Mobile) Home Broadcasting and Self-Storage Units
441300 Automotive Parts, Accessories, Dealers Telecommunications 531190 Lessors of Other Real Estate
& Tire Stores 453990 All Other Miscellaneous Store 513100 Radio & Television Broadcast- Property
Furniture and Home Furnishings Retailers (including tobacco, ing 531210 Offices of Real Estate Agents
Stores candle, & trophy shops) 513200 Cable Networks & Program & Brokers
442110 Furniture Stores Nonstore Retailers Distribution 531310 Real Estate Property
442210 Floor Covering Stores 513300 Telecommunications (including Managers
454110 Electronic Shopping & Mail-
442291 Window Treatment Stores Order Houses paging, cellular, satellite, & 531320 Offices of Real Estate
442299 All Other Home Furnishings other telecommunications) Appraisers
454210 Vending Machine Operators
Stores Information Services and Data 531390 Other Activities Related to
454311 Heating Oil Dealers Real Estate
Electronics and Appliance Stores 454312 Liquefied Petroleum Gas Processing Services
443111 Household Appliance Stores (Bottled Gas) Dealers 514100 Information Services (including Rental and Leasing Services
443112 Radio, Television, & Other 454319 Other Fuel Dealers news syndicates, libraries, & 532100 Automotive Equipment Rental
Electronics Stores 454390 Other Direct Selling Establish- on-line information services) & Leasing
443120 Computer & Software Stores ments (including door-to-door 514210 Data Processing Services 532210 Consumer Electronics &
retailing, frozen food plan Appliances Rental
443130 Camera & Photographic
Supplies Stores providers, party plan Finance and Insurance 532220 Formal Wear & Costume
merchandisers, & coffee-break Depository Credit Intermediation Rental
Building Material and Garden service providers) 532230 Video Tape & Disc Rental
Equipment and Supplies Dealers 522110 Commercial Banking
522120 Savings Institutions 532290 Other Consumer Goods Rental
444110 Home Centers Transportation and 532310 General Rental Centers
444120 Paint & Wallpaper Stores 522130 Credit Unions
Warehousing 522190 Other Depository Credit 532400 Commercial & Industrial
444130 Hardware Stores Machinery & Equipment
444190 Other Building Material Air, Rail, and Water Transportation Intermediation
Rental & Leasing
Dealers 481000 Air Transportation Nondepository Credit Intermediation
482110 Rail Transportation Lessors of Nonfinancial Intangible
444200 Lawn & Garden Equipment & 522210 Credit Card Issuing Assets (except copyrighted works)
Supplies Stores 483000 Water Transportation 522220 Sales Financing 533110 Lessors of Nonfinancial
Food and Beverage Stores Truck Transportation 522291 Consumer Lending Intangible Assets (except
445110 Supermarkets and Other 484110 General Freight Trucking, Local 522292 Real Estate Credit (including copyrighted works)
Grocery (except Convenience) 484120 General Freight Trucking, mortgage bankers &
Stores Long-distance originators) Professional, Scientific, and
445120 Convenience Stores 484200 Specialized Freight Trucking 522293 International Trade Financing Technical Services
445210 Meat Markets Transit and Ground Passenger 522294 Secondary Market Financing
522298 All Other Nondepository Credit Legal Services
445220 Fish & Seafood Markets Transportation
Intermediation 541110 Offices of Lawyers
445230 Fruit & Vegetable Markets 485110 Urban Transit Systems 541190 Other Legal Services
445291 Baked Goods Stores 485210 Interurban & Rural Bus Activities Related to Credit
445292 Confectionery & Nut Stores Transportation Intermediation Accounting, Tax Preparation,
445299 All Other Specialty Food 485310 Taxi Service 522300 Activities Related to Credit Bookkeeping, and Payroll Services
Stores 485320 Limousine Service Intermediation (including loan 541211 Offices of Certified Public
445310 Beer, Wine, & Liquor Stores brokers) Accountants
485410 School & Employee Bus
Transportation Securities, Commodity Contracts, and 541213 Tax Preparation Services
Health and Personal Care Stores 541214 Payroll Services
446110 Pharmacies & Drug Stores 485510 Charter Bus Industry Other Financial Investments and
485990 Other Transit & Ground Related Activities 541219 Other Accounting Services
446120 Cosmetics, Beauty Supplies, &
Perfume Stores Passenger Transportation 523110 Investment Banking & Architectural, Engineering, and
Securities Dealing Related Services
446130 Optical Goods Stores Pipeline Transportation
523120 Securities Brokerage 541310 Architectural Services
446190 Other Health & Personal Care 486000 Pipeline Transportation
Stores 523130 Commodity Contracts Dealing 541320 Landscape Architecture
Scenic & Sightseeing Transportation 523140 Commodity Contracts Services
Gasoline Stations 487000 Scenic & Sightseeing Brokerage 541330 Engineering Services
447100 Gasoline Stations (including Transportation 541340 Drafting Services
convenience stores with gas)
541350 Building Inspection Services

Page 22 FTB 3809 Booklet 1999


Code Code Code Code
541360 Geophysical Surveying & 561500 Travel Arrangement & Other Ambulatory Health Care Food Services and Drinking Places
Mapping Services Reservation Services Services 722110 Full-Service Restaurants
541370 Surveying & Mapping (except 561600 Investigation & Security 621900 Other Ambulatory Health Care 722210 Limited-Service Eating Places
Geophysical) Services Services Services (including ambulance 722300 Special Food Services
541380 Testing Laboratories 561710 Exterminating & Pest Control services & blood & organ (including food service
Services banks) contractors & caterers)
Specialized Design Services
541400 Specialized Design Services 561720 Janitorial Services Hospitals 722410 Drinking Places (Alcoholic
(including interior, industrial, 561730 Landscaping Services 622000 Hospitals Beverages)
graphic, & fashion design) 561740 Carpet & Upholstery Cleaning Nursing and Residential Care
Services Facilities Other Services
Computer Systems Design and
Related Services 561790 Other Services to Buildings & 623000 Nursing & Residential Care Repair and Maintenance
Dwellings Facilities 811110 Automotive Mechanical &
541511 Custom Computer Program-
ming Services 561900 Other Support Services Electrical Repair & Mainte-
(including packaging & labeling Social Assistance
541512 Computer Systems Design nance
services, & convention & trade 624100 Individual & Family Services
Services 811120 Automotive Body, Paint,
show organizers) 624200 Community Food & Housing, & Interior, & Glass Repair
541513 Computer Facilities Manage- Emergency & Other Relief
ment Services Waste Management and Remediation Services 811190 Other Automotive Repair &
541519 Other Computer Related Services Maintenance (including oil
624310 Vocational Rehabilitation change & lubrication shops &
Services 562000 Waste Management & Services
Remediation Services car washes)
Other Professional, Scientific, and 624410 Child Day Care Services 811210 Electronic & Precision
Technical Services Educational Services Equipment Repair &
541600 Management, Scientific, & 611000 Educational Services
Arts, Entertainment, and Maintenance
Technical Consulting Services (including schools, colleges, & Recreation 811310 Commercial & Industrial
541700 Scientific Research & universities) Performing Arts, Spectator Sports, Machinery & Equipment
Development Services and Related Industries (except Automotive &
541800 Advertising & Related Health Care and Social 711100 Performing Arts Companies Electronic) Repair &
Services Maintenance
541910 Marketing Research & Public
Assistance 711210 Spectator Sports (including
811410 Home & Garden Equipment &
Offices of Physicians and Dentists sports clubs & racetracks)
Opinion Polling Appliance Repair & Mainte-
621111 Offices of Physicians (except 711300 Promoters of Performing Arts, nance
541920 Photographic Services Sports, & Similar Events
541930 Translation & Interpretation mental health specialists) 811420 Reupholstery & Furniture
621112 Offices of Physicians, Mental 711410 Agents & Managers for Artists, Repair
Services Athletes, Entertainers, & Other
541940 Veterinary Services Health Specialists 811430 Footwear & Leather Goods
Public Figures
541990 All Other Professional, 621210 Offices of Dentists Repair
711510 Independent Artists, Writers, &
Scientific, & Technical Services Offices of Other Health Practitioners Performers 811490 Other Personal & Household
621310 Offices of Chiropractors Goods Repair & Maintenance
Management of Companies Museums, Historical Sites, and
621320 Offices of Optometrists Similar Institutions Personal and Laundry Services
(Holding Companies) 621330 Offices of Mental Health 712100 Museums, Historical Sites, & 812111 Barber Shops
551111 Offices of Bank Holding Practitioners (except Similar Institutions 812112 Beauty Salons
Companies Physicians) 812113 Nail Salons
621340 Offices of Physical, Occupa- Amusement, Gambling, and
551112 Offices of Other Holding Recreation Industries 812190 Other Personal Care Services
Companies tional & Speech Therapists, & (including diet & weight
Audiologists 713100 Amusement Parks & Arcades reducing centers)
621391 Offices of Podiatrists 713200 Gambling Industries
Administrative and Support 713900 Other Amusement &
812210 Funeral Homes & Funeral
and Waste Management and 621399 Offices of All Other Miscella- Services
neous Health Practitioners Recreation Industries 812220 Cemeteries & Crematories
Remediation Services (including golf courses, skiing
812310 Coin-Operated Laundries &
Outpatient Care Centers facilities, marinas, fitness
Administrative and Support Services 621410 Family Planning Centers Drycleaners
centers, & bowling centers)
561110 Office Administrative Services 621420 Outpatient Mental Health & 812320 Drycleaning & Laundry
561210 Facilities Support Services Substance Abuse Centers Accommodation and Food Services (except Coin-
561300 Employment Services 621491 HMO Medical Centers Operated)
561410 Document Preparation
Services 812330 Linen & Uniform Supply
621492 Kidney Dialysis Centers
Services Accommodation 812910 Pet Care (except Veterinary)
621493 Freestanding Ambulatory
561420 Telephone Call Centers Surgical & Emergency Centers 721110 Hotels (except casino hotels) & Services
561430 Business Service Centers Motels 812920 Photofinishing
621498 All Other Outpatient Care
(including private mail centers Centers 721120 Casino Hotels 812930 Parking Lots & Garages
& copy shops) 721191 Bed & Breakfast Inns 812990 All Other Personal Services
561440 Collection Agencies Medical and Diagnostic Laboratories 721199 All Other Traveler Accommoda-
621510 Medical & Diagnostic Religious, Grantmaking, Civic,
561450 Credit Bureaus tion Professional, and Similar
Laboratories 721210 RV (Recreational Vehicle)
561490 Other Business Support Organizations
Services (including reposses- Home Health Care Services Parks & Recreational Camps 813000 Religious, Grantmaking, Civic,
sion services, court reporting, 621610 Home Health Care Services 721310 Rooming & Boarding Houses Professional, & Similar
& stenotype services) Organizations

FTB 3809 Booklet 1999 Page 23


THIS PAGE INTENTIONALLY LEFT BLANK

visit our website:

www.ftb.ca.gov

Page 24 FTB 3809 Booklet 1999


YEAR
Targeted Tax Area CALIFORNIA FORM

1999 Deduction and Credit Summary 3809


Attach to your California tax return. Social security or California corporation number

Name(s) as shown on return FEIN

-
A. Check the appropriate box for your entity type:
첸 Individual 첸 Estate 첸 Trust 첸 C corporation 첸 S corporation 첸 Partnership
첸 Exempt organization 첸 Limited liability company 첸 Limited liability partnership
B. Enter the name of the targeted tax area (TTA) business: ______________________________________________________________________________
C. Enter the address (actual location) where the TTA business is conducted:
__________________________________________________________________________________________________________________________
D. Enter the name of the specific area of the TTA in which the business and/or investment activity is located. See General Information C, Targeted Tax Area
Designation. ________________________________________________________________________________________________________________
E. Principal Business Activity Code number of the TTA business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
Enter the six-digit number from the Principal Business Activity Code Chart on pages 21 through 23.
F. Total number of employees in the TTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
G. Number of employees included in the computation of the hiring credit, if claimed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
H. Number of new employees included in the computation of the hiring credit, if claimed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
I. Gross annual receipts of the business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
J. Total asset value of the business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________

Part I Credits Used


1 Hiring and sales or use tax credits claimed on the current year return:
a Hiring credit from Worksheet VI, line 8A, column (f) or line 10, column (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
b Sales or use tax credit from Worksheet VI, line 9A, column (f) or line 11, column (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
Add line 1a and line 1b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ❚ 1 _________________
Note: To figure the amount of credits to carry over, complete Worksheet VI on Side 2.

Part II Business Expense Deduction for Equipment Purchases


2 Enter the cost of qualified property purchased for the TTA that is being deducted as a current year
business expense from Worksheet III, Section A, line 5, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 _________________
ELECTION: The act of deducting a portion of the cost of any property as a current year expense rather than adding it to the
capital account constitutes an election to treat that property in accordance with R&TC Sections 17267.6 or 24356.6. That
election may not be revoked except with the written consent of the Franchise Tax Board (FTB).

Part III Net Operating Loss (NOL) Carryover and Deduction


3 a Enter the NOL carryover from the prior year from Worksheet V, Section C, line 10, column (b) . . . . . . . . . . . . . . . . . . . . . . . 3a _________________
b Enter the total NOL deduction used in the current year from Worksheet V, Section C, line 10, column (c). Enter this
amount on Schedule CA (540 or 540NR), line 21e, column B; Form 100, line 20; Form 100S, line 19; or Form 109,
line 3 or line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3b _________________
c Enter the TTA NOL carryover to future years from Worksheet V, Section C, line 10, column (e) . . . . . . . . . . . . . . . . . . . . . . . 3c _________________
ELECTION: For those taxpayers eligible for an NOL carryover under R&TC Sections 17276.2, 17276.4, 17276.5, 17276.6, 24416.2,
24416.4, 24416.5, or 24416.6, the act of claiming an NOL carryover on this form constitutes the irrevocable election to apply the
loss under R&TC Sections 17276.6 or 24416.6, for taxpayers operating a trade or business within the TTA. If you elect to carry
over an NOL under the TTA provisions, you cannot carry over any other type and amount of NOL from this year.

Part IV Portion of Business Attributable to the Targeted Tax Area


4 Enter the average apportionment percentage of your business that is in the TTA from Worksheet IV,
Section A, line 4. If your operation is wholly within the TTA, the average apportionment percentage is 100% (1.00) . . . . . . . . . . . 4 _________________

Part V Recapture of Deduction and Credits


5 TTA recapture of hiring credit from Worksheet I, Section B, line 2, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 _________________
6 Recapture of business expense deduction from Worksheet III, Section B, line 2, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 _________________

380999109 FTB 3809 1999 Side 1


Worksheet VI Computation of Credit Limitations — Targeted Tax Area
Part I Computation of Limitations. See instructions.
1 Trade or business income. Individuals: Enter the amount from the Income or Loss Worksheet, line 14, column (c)
(page 15) on this line and on line 3 (skip line 2). See instructions on page 18. Note: Multistate apportioning
corporations enter the amount from Schedule R, line 13b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Corporations: Enter the average apportionment percentage from Worksheet IV, Section A, line 4. See instructions . . . . 2
3 Multiply line 1 by line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 Enter the TTA NOL deduction from Worksheet V, Section C, line 10, column (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5 TTA taxable income. Enter amount from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1234567890123456789012 5
1234567890123456789012
1234567890123456789012
6 a Compute the amount of tax due using the amount on line 5. 1234567890123456789012
1234567890123456789012
See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6a 1234567890123456789012
1234567890123456789012
1234567890123456789012
6 b Enter the amount of tax from Form 540, line 24; Form 540NR, line 27;
1234567890123456789012
1234567890123456789012
Form 541, line 21; Form 100, line 23; Form 100S, line 22; or Form 109, line 7 1234567890123456789012
1234567890123456789012
or line 15. Corporations and S corporations, see instructions . . . . . . . . . . . . . . . . . . 6b 1234567890123456789012
7 Enter the smaller of line 6a or line 6b. This is the limitation based on the TTA income. Go to Part II, Part III, or Part IV.
See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Part II Limitation of Credits for Corporations, Individuals, and Estates and Trusts. See instructions.
(a) (b) (c) (d) (e) (f) (g)
Credit Credit Total Total credit Limitation Used on Schedule P Carryover
name amount prior year (add col. (b) based on (can never be greater (col. (d) minus
carryover and col. (c)) TTA business income than col. (d) or col. (e)) col. (e))
123456789012345678901234567890121234567890123
123456789012345678901234567890121234567890123 123456789012345
123456789012345
123456789012345678901234567890121234567890123 123456789012345
123456789012345678901234567890121234567890123
A 123456789012345678901234567890121234567890123 123456789012345
8 Hiring 12345678901234567
12345678901234567
123456789012345
credit 12345678901234567
12345678901234567
B 123456789012345678901234567890121234567890123 12345678901234567
123456789012345678901234567890121234567890123 12345678901234567123456789012345
123456789012345
123456789012345678901234567890121234567890123 123456789012345
9 Sales or A 123456789012345678901234567890121234567890123
123456789012345678901234567890121234567890123 123456789012345
123456789012345
use tax 12345678901234567
12345678901234567123456789012345
credit B 12345678901234567
12345678901234567
12345678901234567

Part III Limitation of Credits for S Corporations Only. See instructions.


(a) (b) (c) (d) (e) (f) (g)
Credit Credit S corporation Total Total credit Credit used Carryover
name amount credit (multiply prior year (add col. (c) this year by (col. (e) minus
col. (b) by 1/3) carryover and col. (d)) S corporation col. (f))

10 Hiring
credit
11 Sales or use
tax credit

Part IV Limitation of Credits for Corporations and S Corporations Subject to Paying Only the Minimum Franchise Tax. See instructions.
(a) (b) (c) (d)
Credit Credit Total Total credit
name amount prior year carryover. (add
carryover col. (b) and col. (c))

12 Hiring
credit
13 Sales or use
tax credit

Side 2 FTB 3809 1999 380999209


YEAR
Targeted Tax Area CALIFORNIA FORM

1999 Deduction and Credit Summary 3809


Attach to your California tax return. Social security or California corporation number

Name(s) as shown on return FEIN

-
A. Check the appropriate box for your entity type:
첸 Individual 첸 Estate 첸 Trust 첸 C corporation 첸 S corporation 첸 Partnership
첸 Exempt organization 첸 Limited liability company 첸 Limited liability partnership
B. Enter the name of the targeted tax area (TTA) business: ______________________________________________________________________________
C. Enter the address (actual location) where the TTA business is conducted:
__________________________________________________________________________________________________________________________
D. Enter the name of the specific area of the TTA in which the business and/or investment activity is located. See General Information C, Targeted Tax Area
Designation. ________________________________________________________________________________________________________________
E. Principal Business Activity Code number of the TTA business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
Enter the six-digit number from the Principal Business Activity Code Chart on pages 21 through 23.
F. Total number of employees in the TTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
G. Number of employees included in the computation of the hiring credit, if claimed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
H. Number of new employees included in the computation of the hiring credit, if claimed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
I. Gross annual receipts of the business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
J. Total asset value of the business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________

Part I Credits Used


1 Hiring and sales or use tax credits claimed on the current year return:
a Hiring credit from Worksheet VI, line 8A, column (f) or line 10, column (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
b Sales or use tax credit from Worksheet VI, line 9A, column (f) or line 11, column (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _________________
Add line 1a and line 1b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ❚ 1 _________________
Note: To figure the amount of credits to carry over, complete Worksheet VI on Side 2.

Part II Business Expense Deduction for Equipment Purchases


2 Enter the cost of qualified property purchased for the TTA that is being deducted as a current year
business expense from Worksheet III, Section A, line 5, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 _________________
ELECTION: The act of deducting a portion of the cost of any property as a current year expense rather than adding it to the
capital account constitutes an election to treat that property in accordance with R&TC Sections 17267.6 or 24356.6. That
election may not be revoked except with the written consent of the Franchise Tax Board (FTB).

Part III Net Operating Loss (NOL) Carryover and Deduction


3 a Enter the NOL carryover from the prior year from Worksheet V, Section C, line 10, column (b) . . . . . . . . . . . . . . . . . . . . . . . 3a _________________
b Enter the total NOL deduction used in the current year from Worksheet V, Section C, line 10, column (c). Enter this
amount on Schedule CA (540 or 540NR), line 21e, column B; Form 100, line 20; Form 100S, line 19; or Form 109,
line 3 or line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3b _________________
c Enter the TTA NOL carryover to future years from Worksheet V, Section C, line 10, column (e) . . . . . . . . . . . . . . . . . . . . . . . 3c _________________
ELECTION: For those taxpayers eligible for an NOL carryover under R&TC Sections 17276.2, 17276.4, 17276.5, 17276.6, 24416.2,
24416.4, 24416.5, or 24416.6, the act of claiming an NOL carryover on this form constitutes the irrevocable election to apply the
loss under R&TC Sections 17276.6 or 24416.6, for taxpayers operating a trade or business within the TTA. If you elect to carry
over an NOL under the TTA provisions, you cannot carry over any other type and amount of NOL from this year.

Part IV Portion of Business Attributable to the Targeted Tax Area


4 Enter the average apportionment percentage of your business that is in the TTA from Worksheet IV,
Section A, line 4. If your operation is wholly within the TTA, the average apportionment percentage is 100% (1.00) . . . . . . . . . . . 4 _________________

Part V Recapture of Deduction and Credits


5 TTA recapture of hiring credit from Worksheet I, Section B, line 2, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 _________________
6 Recapture of business expense deduction from Worksheet III, Section B, line 2, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 _________________

380999109 FTB 3809 1999 Side 1


Worksheet VI Computation of Credit Limitations — Targeted Tax Area
Part I Computation of Limitations. See instructions.
1 Trade or business income. Individuals: Enter the amount from the Income or Loss Worksheet, line 14, column (c)
(page 15) on this line and on line 3 (skip line 2). See instructions on page 18. Note: Multistate apportioning
corporations enter the amount from Schedule R, line 13b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Corporations: Enter the average apportionment percentage from Worksheet IV, Section A, line 4. See instructions . . . . 2
3 Multiply line 1 by line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 Enter the TTA NOL deduction from Worksheet V, Section C, line 10, column (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5 TTA taxable income. Enter amount from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1234567890123456789012 5
1234567890123456789012
1234567890123456789012
6 a Compute the amount of tax due using the amount on line 5. 1234567890123456789012
1234567890123456789012
See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6a 1234567890123456789012
1234567890123456789012
1234567890123456789012
6 b Enter the amount of tax from Form 540, line 24; Form 540NR, line 27;
1234567890123456789012
1234567890123456789012
Form 541, line 21; Form 100, line 23; Form 100S, line 22; or Form 109, line 7 1234567890123456789012
1234567890123456789012
or line 15. Corporations and S corporations, see instructions . . . . . . . . . . . . . . . . . . 6b 1234567890123456789012
7 Enter the smaller of line 6a or line 6b. This is the limitation based on the TTA income. Go to Part II, Part III, or Part IV.
See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Part II Limitation of Credits for Corporations, Individuals, and Estates and Trusts. See instructions.
(a) (b) (c) (d) (e) (f) (g)
Credit Credit Total Total credit Limitation Used on Schedule P Carryover
name amount prior year (add col. (b) based on (can never be greater (col. (d) minus
carryover and col. (c)) TTA business income than col. (d) or col. (e)) col. (e))
123456789012345678901234567890121234567890123
123456789012345678901234567890121234567890123 123456789012345
123456789012345
123456789012345678901234567890121234567890123 123456789012345
123456789012345678901234567890121234567890123
A 123456789012345678901234567890121234567890123 123456789012345
8 Hiring 12345678901234567
12345678901234567
123456789012345
credit 12345678901234567
12345678901234567
B 123456789012345678901234567890121234567890123 12345678901234567
123456789012345678901234567890121234567890123 12345678901234567123456789012345
123456789012345
123456789012345678901234567890121234567890123 123456789012345
9 Sales or A 123456789012345678901234567890121234567890123
123456789012345678901234567890121234567890123 123456789012345
123456789012345
use tax 12345678901234567
12345678901234567123456789012345
credit B 12345678901234567
12345678901234567
12345678901234567

Part III Limitation of Credits for S Corporations Only. See instructions.


(a) (b) (c) (d) (e) (f) (g)
Credit Credit S corporation Total Total credit Credit used Carryover
name amount credit (multiply prior year (add col. (c) this year by (col. (e) minus
col. (b) by 1/3) carryover and col. (d)) S corporation col. (f))

10 Hiring
credit
11 Sales or use
tax credit

Part IV Limitation of Credits for Corporations and S Corporations Subject to Paying Only the Minimum Franchise Tax. See instructions.
(a) (b) (c) (d)
Credit Credit Total Total credit
name amount prior year carryover. (add
carryover col. (b) and col. (c))

12 Hiring
credit
13 Sales or use
tax credit

Side 2 FTB 3809 1999 380999209


How to Get California Tax Information (Keep This Page For Future Use)
Where to Get Income Tax Forms General Toll-Free Phone Service Your Rights as a Taxpayer
By Internet – If you have Internet access, you Between January 3 – April 17, 2000, our Our goal at the Franchise Tax Board (FTB) is
may download, view, and print California tax general toll-free phone service is available: to make certain that your rights are protected
forms and publications. Go to our website at: • Monday – Friday, 6 a.m. until midnight; so that you will have the highest confidence in
www.ftb.ca.gov and the integrity, efficiency, and fairness of our
• Saturdays and holidays, 7 a.m. until 4 p.m. state tax system. FTB Publication 4058,
By phone – To order 1997, 1998, and 1999 California Taxpayers’ Bill of Rights, includes
California personal income tax forms, 1999 After April 17, 2000, our general toll-free information on your rights as a California
California business entity tax forms, and 1999 phone service is available: taxpayer, the Taxpayers’ Rights Advocate
federal forms, call our automated phone • Monday – Friday, 7 a.m. until 8 p.m.; and Program, and how you can request written
service. To order a form: • Saturdays, 7 a.m. until 4 p.m. advice from the FTB on whether a particular
• Refer to the list in your tax booklet and The best times to call are before 10 a.m. and transaction is taxable. See “Where to Get
find the code number for the form you after 6 p.m. Times of day are Pacific Standard Income Tax Forms” on this page for how to
want to order. Time (PST). get this publication.
• Call (800) 338-0505 and follow the
From within the
instructions.
United States . . . . . . . . . . . (800) 852-5711
Field Offices
Please allow two weeks to receive your order. From outside the You can get information, California tax forms,
If you live outside California, please allow United States . . . . . . . . . . . (916) 845-6500 and resolve problems on your account if you
three weeks to receive your order. (not toll-free) visit one of our field offices. Our field office
In person – Most libraries, post offices, and Assistance for persons with disabilities: hours are Monday through Friday, 8 a.m. until
banks provide free California personal income The FTB complies with provisions of the 5 p.m. These offices will remain open
tax booklets during the filing season. Many Americans with Disabilities Act. Persons with additional hours and days from January 15
libraries and some quick print businesses have a hearing or speech impairment, call: through April 17, 2000. For the extended
forms and schedules for you to photocopy (you hours of the office nearest you, call
From voice phone . . . . . . . . . (800) 735-2922
may have to pay a nominal fee). Note that (800) 338-0505, select personal income tax,
(California Relay Service)
employees at libraries, post offices, banks, and then general information, and enter code 110
quick print businesses cannot provide tax From TTY/TDD . . . . . . . . . . . (800) 822-6268 when instructed to do so.
information or assistance. (Direct line to FTB customer service)
Field Office Address
By mail – Write to: For all other assistance or special accommo- Bakersfield 1800 30th St, Ste 370
dations, call (800) 852-5711. Burbank 333 N Glenoaks Blvd,
TAX FORMS REQUEST UNIT
FRANCHISE TAX BOARD For federal tax questions: Ste 200
PO BOX 307 Call the IRS at . . . . . . . . . . . . (800) 829-1040 Fresno 2550 Mariposa St,
RANCHO CORDOVA CA 95741-0307 Asistencia bilingüe en español Rm 3002
Para obtener servicios en español y asistencia Long Beach 4300 Long Beach Blvd,
Letters para completar su declaración de impuestos/ Ste 700B
formularios, llame al número de teléfono Los Angeles 300 S Spring St, Ste 5704
You may write to us to get a written reply to (anotado arriba) que le corresponde. Oakland 1515 Clay St, Ste 305
your question or to reply to a notice we sent Sacramento 3321 Power Inn Road
you. Be sure your letter includes your FEIN, Geographic Boundaries Ste 250
California corporation number, or social San Bernardino 464 W 4th St, Ste 454
security number, your daytime and evening Further information about geographic San Diego 5353 Mission Ctr Rd, Ste 314
telephone numbers, and a copy of the notice boundaries of the TTA is available from: San Francisco 455 Golden Gate Ave,
(if applicable). Send your letter to: ENTERPRISE ZONE PROGRAMS Ste 7400
RESOURCE DEVELOPMENT SECTION CA TRADE AND COMMERCE AGENCY San Jose 96 N Third St, 4th Fl
FRANCHISE TAX BOARD 801 K STREET SUITE 1700 Santa Ana 600 W Santa Ana Blvd,
PO BOX 1468 SACRAMENTO CA 95814 Ste 300
SACRAMENTO CA 95812-1468 Santa Rosa 50 D St, Rm 130
Telephone: (916) 324-8211 Stockton 31 East Channel St, Rm 219
We will respond to your letter within six to FAX: (916) 322-7214 Ventura 4820 McGrath St, Ste 270
eight weeks. In some cases, we may need to Website: commerce.ca.gov West Covina 100 N Barranca St, Ste 600
call you for additional information. Do not
attach correspondence to your tax return Economic Development Area Out of State Field Offices
unless the correspondence relates to an item Chicago 1 N. Franklin, Ste 400
on your return.
Information Chicago, IL 60606-3401
Houston 1415 Louisiana, Ste 1515
Further information about the TTA tax
Houston, TX 77002-7351
incentives is available from:
Long Island 1325 Franklin Ave, Ste 560
FRANCHISE TAX BOARD Garden City, NY 11530-1631
ECONOMIC DEVELOPMENT AREA Manhattan 1212 Ave of the Americas,
INFORMATION 4th Fl
Telephone: (916) 845-3464 New York, NY 10036-1601
FAX: (916) 845-0415
Website: www.ftb.ca.gov

FTB 3809 Booklet 1999 Page 29


 Automated Toll-Free Phone Service (Keep This Page For Future Use)
Call our automated toll-free phone service to: 212 – How do I claim my disaster related loss? S Corporations
• Order most California and federal income tax 215 – Who qualifies me to use the head of 704 – Is an S corporation subject to the minimum
household filing status? franchise tax?
forms; 705 – Are S corporations required to file estimate
• Get current year tax refund information; 216 – I’m due a refund. Do I still need to file a
• Get balance due and payment information; and return? payments?
217 – I am currently/was in the military. Do I have 706 – What forms do S corporations file?
• Hear recorded answers to many of your 707 – The tax for my S corporation is less than
questions about California taxes. to file a California return?
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Our automated phone service is available in same filing status as federal? I put on line 22 of Form 100S?
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notes. 220 – There is no difference in my state and Schedule K-1 (100S) and where do
Call from within the federal depreciation, business income, and nonresident shareholders find their
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Call from outside the 221 – What is community property? Schedule K-1 (100S)?
United States (not toll-free) . . . (916) 845-6600 222 – How much can I deduct for vehicle license Exempt Organizations
fees? 709 – How do I get tax-exempt status?
Current Year Personal Income Tax Refund 710 – Does an exempt organization have to file
Information 227 – How do I get a refund of excess SDI?
239 – Where can I get help with preparing and Form 199?
You should wait at least eight weeks after you file filing my income tax return? 735 – How can an exempt organization incorpo-
your tax return before you call to find out about rate without paying corporation fees and
your refund. You will need your social security 240 – Does a tax return have to be filed for a
deceased taxpayer? costs?
number, the numbers in your street address, box Refunds 736 – I have exempt status. Do I need to file
number, or route number, and your ZIP Code to Form 100 or Form 109 in addition to
use this service. Refund status information is 300 – My spouse has passed away. You sent a
refund with both our names on it. What do Form 199?
available 24 hours a day, 7 days a week. Call our I do? Minimum Tax and Estimate Tax
automated phone service, select personal income 712 – What is the minimum franchise tax?
tax information, then refund information, and 301 – I got a letter saying you sent my refund to
another agency. Why? 714 – My corporation is not doing business; does
follow the recorded instructions. Penalties it have to pay the minimum franchise tax?
Personal Income Tax Balance Due and Payment 400 – I have an extension of time to file my 716 – When are my estimate payments due?
Information return. Why did I get a penalty? Billings and Miscellaneous Notices
You should wait at least 45 days from the date you 401 – I filed my return on time. Why did I get a 723 – I received a bill for $250. What is this for?
mailed your payment before you call to verify penalty? 728 – Why was my corporation suspended?
receipt of your payment. You will need your social 402 – How can I protest a penalty? 729 – Why is my subsidiary getting a request for
security number, the numbers in your street 403 – What is the estimate penalty rate? a return when we file a combined report?
address, box number, or route number, and your Notices and Bills Tax Clearance
ZIP Code to use this service. Balance due and 500 – I received a bill and I cannot pay it in full. 724 – How do I dissolve my corporation?
payment information is available 24 hours a day, What do I do? 725 – What do I have to do to get a tax clear-
7 days a week. 501 – Why didn’t you give me credit for my ance?
Order Forms withholding? 726 – How long will it take to get a tax clearance
See the instructions for ordering forms by phone 502 – You didn’t give me credit for my dependent. certificate?
on page 29. For personal income tax forms, this What do I do? 727 – My corporation was suspended/
service is available 24 hours a day, 7 days a week. 504 – I’m head of my house. Why was I denied forfeited. Can I still get a tax clearance?
Business entity forms are available from 6 a.m. head of household filing status? Miscellaneous
until 8 p.m., Monday through Friday. 505 – Why was my IRA deduction denied? 617 – What are the current interest rates?
506 – How do I get information about my 700 – Who do I need to contact to start a
Answers To Tax Questions Form 1099-G? business?
Recorded answers to your tax questions are 508 – I received a notice that didn’t show all 701 – I need a state ID number for my business.
available 24 hours a day, 7 days a week. To receive payments made. How do I get credit for Who do I contact?
answers to any of the following questions, call our them? 702 – Can you send me an employer’s tax guide?
automated phone service, select either personal Tax For Children 703 – How do I incorporate?
income tax or business entity tax information, then 601 – Can my child take a personal exemption 719 – How do I properly identify my corporation
general information, and enter the three-digit code credit when I claim her or him as a when dealing with the Franchise Tax Board?
when instructed to do so. dependent on my return? 720 – How do I obtain information about
Times of day are Pacific Standard Time (PST). 602 – Federal law limits the standard deduction. changing my corporation’s name?
Is the state law the same? 721 – How do I change my accounting period?
Miscellaneous 737 – Where do I send my payment?
Personal Income Tax Information 610 – Can I pay my taxes with a credit card? 738 – What is electronic funds transfer?
Code Filing Assistance 611 – What address do I send my payment to? 739 – How do I get a copy of my state corporate
100 – Do I need to file a return? 612 – I mailed my return and haven’t heard tax return?
110 – Field office hours of availability, January 15 anything. Should I send a copy of my 740 – What requirements do I have to report
- April 17, 2000. return? municipal bond interest paid by a state
111 – Which form should I use? 613 – I forgot to attach my Form(s) W-2 when I other than California?
112 – How do I file electronically and get a fast mailed my return. What do I do? 750 – How do I organize or register an LLC?
refund? 614 – I forgot to attach a copy of my federal 751 – How do I cancel my registration as an LLC?
200 – Where can I pick up a form today? return. What do I do? 752 – What tax forms do I use to file as an LLC?
201 – How can I get an extension to file? 615 – How do I get a copy of my state tax return? 758 – If a corporation converted to an LLC during
202 – There is no envelope in the booklet. Where 616 – What should I do if my federal tax return the current year, is the corporation liable
do I send my return? was examined and changed by the IRS? for the tax as a corporation and an LLC tax/
203 – What is and how do I qualify for the 617 – What are the current interest rates? fee in the same year?
nonrefundable renter’s credit? 619 – How do I report a change of address?
204 – I never received a Form W-2. What do I do?
205 – I have no withholding taken out. What do I Business Entity Tax Information
do?
206 – Do I have to attach a copy of my federal Code Filing Assistance
return? 715 – If my actual tax is less than the minimum
207 – Should I file my return even though I do franchise tax, what figure do I put on
not have the money to pay? line 23 of Form 100?
208 – How do I figure my estimate tax payments? 717 – What are the tax rates for corporations?
209 – I lived in California for part of the year. Do I 718 – How do I get an extension of time to file?
have to file a return? 722 – When do I have to file a short-period
210 – I do not live in California. Why do I have to return?
file a return? 734 – Is my corporation subject to the franchise
211 – How do I figure my IRA deduction? tax or income tax?

Page 30 FTB 3809 Booklet 1999