The amount of non-taxable embedded software being taxed in California is a staggering number. While companies own assets with millions of dollars of embedded software, few companies are maximizing their property tax savings through the embedded software exemption. The good news is that it is not too late to dig in and maximize your potential tax savings. Most businesses have until May 7, 20141 to file their annual Business Property Tax Statements (Form 571-L) with California counties.
On May 30, 2012, the State Board of Equalization (SBE), approved pro-posed amendments to the California Code of Regulations, Title 18, section 1684. The Proposed Regulation attempts to provide guidance as to the meaning of the broadened statutory definition of “retailers engaged in business in this state.” The statutory definition now includes retailers who are members of “commonly controlled groups,” as well as retailers who enter into agreements with “a person or persons in this state” who meet certain minimum thresholds.