California Tax Panel Sets Precedent for R&D Credit Claims

June 1, 2020, 2:00 PM

A pair of rulings from California’s administrative tax appeal panel denied a clothing company’s $2.4 million in claims for a research and development tax credit and sets a precedent for the future use of the credit.

A three-judge panel from the state Office of Tax Appeals, in two separate opinions, upheld the Franchise Tax Board’s denial of the credits to clothing maker Swat-Fame Inc. The panel also denied the company’s petition for a rehearing for tax years 2008 through 2012. The judges said they looked first to whether the company engaged in a process of experimentation for a qualified purpose, ...

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