California Fiscal Issues and Information

State Forced to Issue Registered Warrants (IOUs)

(UPDATE: Despite passage of budget bills by the Legislature, the Controller cannot stop issuing IOUs until he determines that a budget signed into law provides the cash necessary to cover all of the State's payment obligations. The Controller's Web site will continue to be updated as more information becomes available.)

Without action by the Governor and Legislature to stave off a severe cash deficit, the Controller was forced to issue individual registered warrants, also called IOUs, beginning July 2.

Payment delays, like those used in February to manage a smaller cash crisis, will not provide sufficient resources to meet the State’s obligations.

A registered warrant is a “promise to pay,” with interest, that is issued by the State when there is not enough cash to meet all of the State’s payment obligations. The Controller has developed a number of new Web pages to answer questions about registered warrants.

For more information, please see:

Controller's June 24, 2009, News Release

Controller's Registered Warrants Information Pages

Frequently Asked Questions about Registered Warrants

Which Institutions Will Honor a Registered Warrant?

 For additional information on California fiscal issues, please see:

·         The Controller's Monthly Cash Reports and Summary Newsletters;

·         The Controller's California Fiscal Issues and Information Page.

 

Tax Changes in 2009 Recovery Act

You may have heard how the economic stimulus package (the American Recovery and Reinvestment Act of 2009) recently enacted by Congress contains tax cuts for individuals. However, receiving less publicity is the fact that the new law provides important tax relief for businesses coping with the struggling economy as well as tax incentives to spur new business investments.

 

For example, the economic stimulus package—

 

• Extends a tax break enacted last year that allows more businesses to “expense”—write off immediately—the cost of equipment and machinery used in the business.
• Extends another break that permits businesses to claim increased first-year depreciation deductions for equipment and machinery that’s not eligible for expensing.
• Creates and expands energy-related tax incentives for businesses, including a new tax credit for businesses that manufacture energy-saving equipment.
• Reduces taxes for investors in qualifying small businesses if they hold on to their investments for at least five years.
• Provides a new tax break for businesses that hire unemployed veterans and young people.
• Makes it easier for a business to get a refund of prior taxes paid when it’s running a current operating loss.
• Defers the tax owed when a business’s debts are cancelled or settled for less than face value.
• Reduces the estimated tax payments that certain small businesses are required to pay.

 

Please contact us if you want to discuss what tax savings are available to your business under the new law.