SACRAMENTO -- The tax bill isn't in the mail, at least for the next 90 days.
The California Franchise Tax Board, which collects the state income tax, has temporarily opted not to send out bills to about 2,000 taxpayers telling them they owe $120 million in back taxes.
State tax collectors originally mailed notices in December retroactively dunning taxpayers after a court threw out as unconstitutional an investment incentive program. As a result shareholders in small businesses could be on the hook for taxes on income from the sale of stock for the years 2008-12, plus interest.
The taxpayers as expected to react with outrage that they were being billed for taxes that weren't legally due at the time they filed the now-disputed returns. They were taking advantage of the "Qualified Small Business Capital Gains Incentive," which had been approved by the state Legislature and the governor two decades ago.