STATE OF CALIFORNIAFRANCHISE TAX BOARD

FTB Publication 1102

2001 Guidelinesfor Local AgencyMilitary BaseRecovery AreaTax Incentives

ContentsWhat’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Geographic Boundaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Hiring Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Sales or Use Tax Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Business Expense Deduction . . . . . . . . . . . . . . . . . . . . . . . 5

Net Operating Loss Carryover Deduction . . . . . . . . . . . . . 6

Determination of LAMBRA Income or LAMBRA Tax . . . . 7

Qualified Taxpayer Defined . . . . . . . . . . . . . . . . . . . . . . . . . 8

LAMBRA Locations, Designations, andExpiration Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Codes for Principal Business Activity . . . . . . . . . . . . . . . 10

Related FTB Forms and Publications . . . . . . . . . . . . . . . 13

Where to Get Tax Forms and Publications . . . . . . . . . . . 13

Economic Development Area Information . . . . . . . . . . . . 13

General Toll-Free Phone Service . . . . . . . . . . . . . . . . . . . 13

California Tax Forms on CD-ROM!Order FTB Pub. 1097, California Income Tax Forms onCD-ROM, and get:• Current year California and federal forms, instructions,

and publications.• Prior year California forms and instructions.• Frequently used forms that may be filled in electronically,

printed out for submission, and saved for record keeping.

To order the CD-ROM, call:(916) 845-7070

California Tax Forms on the Internet!• Current year California forms, instructions, and

publications.• Prior year California forms and instructions.• Frequently used forms that may be filled in electronically,

printed out for submission, and saved for record keeping.• Answers to frequently asked tax questions.

Go to our Website atwww.ftb.ca.gov

What’s NewFormsFor the 2001 tax year, a new form is available fornonresidents and part-year residents:Short Form 540NR, California Nonresident or Part-YearResident Income Tax Return. The Short Form 540NR isfor nonresident and part-year resident taxpayers whohave limited income sources and deductions. TheForm 540NR name has been changed toLong Form 540NR, California Nonresident or Part-YearResident Income Tax Return.For taxable years beginning on or after January 1, 2001and before January 1, 2003, farmers are allowed adeduction for losses sustained due to Pierce's Diseaseand its vectors. This loss may create an NOL, which isallowed to be carried forward for nine years at 100%.The NOL may be deducted only from income appor-tioned to the area affected by Pierce's Disease using atwo-factor formula. For more information, see formFTB 3805D.Bank and Corporation Tax Law vs. Corporation TaxLawFor taxable years beginning on or after January 1, 2001,The “Bank and Corporation Tax Law” (B&CTL) has beenrenamed as the "Corporation Tax Law" (CTL). The term"Bank" in the title is no longer needed because banksare included in the definition of a corporation.

Page 2 FTB Pub. 1102 2001

New Local Agency Military Base Recovery Area(LAMBRA) DesignationsThe following areas received final designation from theCalifornia Technology, Trade and Commerce Agency(TTCA) in 2001:• Tustin Marine Corps Air station in Tustin. The desig-

nation is effective from 9/1/01 until 8/31/09; and• The city of San Diego's Naval Training Center (NTC) -

Liberty Station for the former San Diego NavalTraining Center. The designation is effective from6/1/01 until 5/31/09.

Basis AdjustmentFor purposes of recapturing the business expensededuction, Title 18 Cal. Code Reg. Sections 17267.2and 24356.7 were adopted January 1, 2001. Theseregulations provide that as of the first day of the taxableyear in which a recapture event occurs, the basis of thequalified property shall be increased by the recaptureamount. The increase in basis is depreciated over theremaining useful life of the qualified property.Federal/State ConformityIn general, California law conforms to the InternalRevenue Code (IRC) as of January 1, 1998. However,there are continuing differences between California andfederal law. California has not conformed to most of thechanges made to the IRC by the federal Internal Rev-enue Service Restructuring and Reform Act of 1998(Public Law 105-206) and the Ticket to Work and WorkIncentives Improvement Act of 1999 (Public Law 106-170). California has not conformed to any of thechanges made by the Tax and Trade Relief ExtensionAct of 1998 (Public Law 105-277), the MiscellaneousTrade and Technical Corrections Act of 1999 (Public Law106-36), the FSC Repeal and Extraterritorial IncomeExclusion Act of 2000 (Public Law 106-519), the Con-solidated Appropriations Act of 2001 (Public Law 106-554), and the Economic Growth and Tax ReliefReconciliation Act of 2001 (Public Law 107-16).Principal Business ActivityThe FTB implemented the new Principal BusinessActivity (PBA) code chart that is based on the NorthAmerican Industry Classification System (NAICS)published by the United States Office of Managementand Budget, 1997 Edition. Accordingly, the PBA andNAICS codes are used for purposes of businessclassification. The PBA codes are listed on pages 10through 12.

General InformationLAMBRAs have been established to stimulate growthand development in areas that experience military baseclosures.A LAMBRA provides four business-related tax incentivesthat are explained in this publication:1. Credit for hiring qualified employees;2. Credit for sales or use tax paid or incurred on quali-

fied property;

3. Business expense deduction for the cost of qualifiedproperty; and

4. Net operating loss (NOL) carryover deduction.This guide briefly explains the four business-related taxincentives to help investors and business operatorsunderstand the potential financial impact of each incen-tive and what must be done to take advantage of them.Detailed information about the methods used to computeallowable tax incentives can be found in FTB 3807, LocalAgency Military Base Recovery Area Business Booklet.LAMBRA tax incentives apply only to certain businesstransactions that are undertaken after a LAMBRA hasreceived final designation. See page 9 for LAMBRAdesignation and expiration dates.Note: To qualify for the LAMBRA tax incentives, abusiness must have a net increase of one or more jobswithin the first two taxable years of commencing busi-ness within the LAMBRA. See Qualified TaxpayerDefined on page 8 for additional information.

Geographic BoundariesInformation about geographic boundaries of a LAMBRA,dates of designation, or other information not related tothe tax incentives is available from:

ENTERPRISE ZONE PROGRAMSCA TECHNOLOGY, TRADE AND

COMMERCE AGENCY801 K STREET SUITE 1700SACRAMENTO CA 95814Telephone: (916) 324-8211Fax: (916) 322-7214Website: www.commerce.ca.gov

Hiring CreditA qualified business may reduce the tax on LAMBRAbusiness income by a percentage of qualified wages paidto one or more qualified employees.A qualified employee is an employee who:• Is hired after a former military base has been officially

designated as a LAMBRA by the Technology Tradeand Commerce Agency (TTCA) (see page 9 forLAMBRA designation and expiration dates);

• Spends at least 90% of work time, for the qualifiedemployer, on activities directly related to the conductof a trade or business located within the LAMBRA; and

• Performs at least 50% of the work, for the qualifiedemployer, within the boundaries of the LAMBRA.

For taxable years beginning on or after January 1, 1999,a qualified employee must be:• A civilian or military employee of a base or former

base who has been displaced as a result of a federalbase closure act; or

• Anyone who immediately before starting work for theemployer was any of the following:1. A person who has been determined eligible for

services under the federal Job Training Partner-ship Act (JTPA) or its successor;

FTB Pub. 1102 2001 Page 3

2. A person eligible to be a voluntary or mandatoryregistrant under the Greater Avenues for Indepen-dence Act of 1985 (GAIN) or its successor;

3. An economically disadvantaged individual 16years of age or older;

4. A qualified dislocated worker;5. An individual who is enrolled in or has completed a

state rehabilitation plan;6. A service-connected disabled veteran;7. A veteran of the Vietnam era;8. A veteran who recently separated from military

service;9. An ex-offender;

10. A person who is a recipient of:• Federal Supplemental Security Income (SSI);• Aid to Families with Dependent Children

(AFDC);• Food stamps; or• State and local general assistance; or

11. A Native American.Note: References to employee in this publication refer toa qualified disadvantaged individual.Employers hiring qualified employees must get FormTCA EZ1, Local Agency Military Base Recovery AreaHiring Voucher, from the local agency responsible forverifying employees’ eligiblilty. Contact the localLAMBRA coordinator for more information on the localagency and verification process. You may reach them atthe California Technology, Trade and Commerce Agencyat the previously listed address.Qualified wages means the wages paid or incurred bythe employer during the taxable year to employ aqualified employee. Qualified wages include only thosewages paid while the LAMBRA designation is in effect.Wages that qualify for the hiring credit are those wagespaid to a qualified employee for the consecutive60-month period beginning on the first date theemployee commenced employment with the employer.For an employer that operates a business that hasregularly occurring seasonal or intermittent employmentdecreases and increases, reemployment of an individualis not a new hire; rather, it is a continuation of the prioremployment and does not constitute commencement ofemployment for the qualified wages test.You may claim up to 50% of the qualified wages paid toa qualified employee as a credit against tax imposed onLAMBRA business income. The chart below shows theactual percentage of qualified wages paid that may beclaimed as a hiring credit.

Credit allowed onPeriod of employment qualified wages paid

1st 12 months 50%2nd 12 months 40%3rd 12 months 30%4th 12 months 20%5th 12 months 10%

After 60 months 0%

The hiring credit is based on the smaller of the actualhourly wage paid or 150% of the minimum hourly wageestablished by the Industrial Welfare Commission.Where the California minimum wage is higher than thefederal minimum wage, the California minimum wage isused for purposes of computing the LAMBRA hiringcredit. Effective January 1, 2001, the established mini-mum wage is $6.25 per hour. For purposes of computingthe LAMBRA hiring credit, 150% of the minimum wage is$9.37 per hour.The chart below lists the amount of minimum hourlywage, the period it is effective, and the maximum hourlywage allowed for the hiring credit.

Wages paid or incurred Minimum 150% of theduring the following wage minimum

time periods: wage

2/29/98 to 12/31/00 $5.75 $8.62Effective 1/1/01 $6.25 $9.37Effective 1/1/02 $6.75 $10.12

Example 1: On January 1, 2000, you hired a qualifiedemployee who worked 2,080 hours in your LAMBRAbusiness for two consecutive years. You paid this qualifiedemployee minimum wage to work at your business. Yourbusiness has a June 30 fiscal year end. Your hiring creditfor the year ending June 30, 2000, is computed asfollows:Step 1: 1/1/00 to 6/30/00 - 1040 hours x $5.75 = $5,980Step 2: $5,980 x 50% (.50) = $2,990Your total hiring credit for fiscal year ending June 30,2000, is $2,990.Example 2: Use the same facts as above except thatthe qualified employee is earning $9.00 an hour begin-ning January 1, 2001. Your hiring credit for the secondtaxable year ending June 30, 2001, is computed asfollows:Step 1: 7/1/00 to 12/31/00 - 1040 hours x $5.75 =$5,980Step 2: $5,980 x 50% (.50) = $2,990Step 3: 1/1/01 to 6/30/01 - 1040 hours x $9.00 = $9,360Step 4: $9,360 x 40% (.40) = $3,744Step 5: $2,990 + $3,744 = $6,734Your total hiring credit for fiscal year ending June 30,2001, is $6,734.

Limitations• Qualified wages paid by the employer, during each

qualified year one through five, used to compute thiscredit cannot exceed $2 million for each taxable year.

• The business must reduce any deduction for wages bythe amount of this credit.

• The amount of LAMBRA credits (sales or use taxcredit, hiring credit, and credit carryovers from earlieryears) claimed for any taxable year may not exceedthe amount of tax that would be imposed on theincome earned solely from your business activities inthe LAMBRA.

Page 4 FTB Pub. 1102 2001

• In the case where the employer is qualified to take theLAMBRA hiring credit as well as another credit for thesame wage expense, the business may only claimone credit for that wage expense.

• The credit cannot reduce the minimum franchise tax,(corporations and S corporations), annual tax (part-nerships, LLCs classified as partnerships, andQSubs), the alternative minimum tax, (corporations,exempt organizations, individuals, fiduciaries), thebuilt-in gains tax (S corporations), or the excess netpassive income tax (S corporations). In addition, thecredit may not reduce regular tax below tentativeminimum tax.

Credit CarryoverIf the amount of the hiring credit is greater than the taxattributable to the LAMBRA business income in anyyear, the excess credit may be carried over to futureyears to offset tax on LAMBRA business income untilexhausted.

Credit RecaptureThe employer must recapture the amount of creditattributable to an employee's wages if the employerterminates the employee any time during the longer ofthe following two periods:• The first 270 days of employment (whether or not

consecutive); or• 90 days of employment plus 270 calendar days.Employers of seasonal employees must recapture theamount of credit attributable to a seasonal employee’swage if the employer terminates employment before thecompletion of 270 days of employment during the60-month period beginning the day the employeecommences employment with the employer.A “day of employment” means any day for which theemployee receives wage compensation (including a paidsick day, holiday, or vacation day).The employer must add back to the current year's taxthe amount of credit claimed in the year of terminationand all prior years in which the credit was claimed for theterminated employee.Credit recapture is not required if the termination was:• Voluntary on the part of the employee;• Caused by the employee becoming disabled;• Due to employee misconduct;• Due to a substantial reduction in business; or• Carried out so that other qualified individuals could be

hired, creating a net increase in the number of quali-fied employees and their hours of employment.

Job Creation RequiredIn addition to the credit recapture and exception rulespreviously listed, if at the close of the second taxableyear of operating within the LAMBRA, the taxpayer doesnot have a net increase of one or more jobs in this stateand one or more employees working within the LAMBRAduring each of the taxable years (see Determining theNet Increase in Jobs on pages 8 and 9), the amount of

the LAMBRA hiring credit previously claimed must beadded back to the taxpayer’s tax for the second taxableyear and the taxpayer is no longer eligible for theLAMBRA incentives.There are no exceptions to this recapture rule. See theQualified Taxpayer Defined on page 8 for additionalinformation about the net increase in jobs requirement.

Record KeepingRetain a copy of Form TCA EZ1 to substantiate anemployee’s eligibility as a “qualified employee.” In addi-tion, for each qualified employee, keep a schedule ofemployment showing:• Employee’s name;• Date the employee was hired;• Number of hours the employee worked for each month

of employment;• Smaller of the hourly rate of pay for each month of

employment or 150% of the minimum wage;• Records of any other federal or state subsidies

received for hiring the qualified employee;• Total qualified wages per month for each month of

employment; and• Location of the employee’s job site and the duties

performed.Note: Keep the above information for the life of thehiring credit.

Sales or Use Tax CreditLAMBRA businesses may reduce tax on the LAMBRAbusiness income by the amount of sales or use tax paidor incurred on qualified property purchased for exclusiveuse in the LAMBRA. In any taxable year, individuals mayclaim a credit equal to the sales or use tax paid orincurred on the first $1 million of qualified property. Inany year corporations may claim a credit equal to thesales or use tax paid or incurred on the first $20 millionof qualified property.To qualify for the credit, the qualified property must be:• High technology equipment including, but not limited

to, computers and electronic processing equipment;• Aircraft maintenance equipment including, but not

limited to, engine stands, hydraulic mules, power carts,test equipment, handtools, and aircraft start carts andtugs;

• Aircraft components including, but not limited to,engines, fuel control units, hydraulic pumps, avionics,starts, wheels, and tires; or

• Any property that is Section 1245 property, as definedin IRC Section 1245(a)(3).

You must use the property exclusively within the bound-aries of a LAMBRA.If you purchase property manufactured outside ofCalifornia and claim the credit for the use tax paid orincurred, you will be allowed the credit only if property ofa comparable quality and price was not available fortimely purchase and delivery from a Californiamanufacturer.

FTB Pub. 1102 2001 Page 5

Limitations• The amount of LAMBRA credits (sales or use tax

credit, hiring credit, and credit carryovers from earlieryears) claimed for any year may not exceed theamount of tax that would be imposed on the incomeearned solely from your LAMBRA business activities.

• If you claim the sales or use tax credit, you may notincrease the basis of property by the amount of thesales or use tax paid or incurred.

• In the case where the business is qualified to take theLAMBRA sales or use tax credit as well as anothercredit for the same piece of property, the business mayonly claim one credit.

• The credit cannot reduce the minimum franchise tax,(corporations and S corporations), annual tax (part-nerships, LLCs classified as partnerships, andQSubs), the alternative minimum tax (corporations,exempt organizations, individuals, fiduciaries), thebuilt-in gains tax (S corporations), or the excess netpassive income tax (S corporations). In addition, thecredit may not reduce regular tax below tentativeminimum tax.

Example 3: You spend $50,000 to purchase airplanerepair equipment. The sales tax paid for the purchase is$3,000. You may reduce the amount of your tax imposedon LAMBRA business income by up to $3,000. If youcannot claim the full $3,000 in a single taxable year, youmay carry over the remaining amount to reduce nextyear’s tax imposed on LAMBRA business income.

Credit CarryoverIf the amount of sales or use tax credit is greater than thetax on LAMBRA business income in any taxable year,the excess credit can be carried over to future years tooffset tax on LAMBRA business income until exhausted.

Claiming Both Hiring Credit and Salesor Use Tax CreditTaxpayers who claim both credits available to LAMBRAbusinesses (the sales or use tax credit and the credit forhiring qualified employees) may not claim a total creditamount that exceeds the tax imposed on LAMBRAbusiness income for any one taxable year. However,credits that exceed this amount may be carried over tooffset tax imposed on LAMBRA business income insubsequent years.

Credit Recapture• The full amount of the credit must be recaptured

(added back to tax) if the qualified property is dis-posed of or is no longer used in the LAMBRA beforethe close of the second taxable year beginning afterthe property was first placed into service.

• In addition, if at the close of the second taxable year ofoperating within the LAMBRA, the taxpayer does nothave a net increase of one or more jobs in this stateand one or more employees working within theLAMBRA during each of the taxable years, the amountof the LAMBRA sales or use tax credit previously

claimed must be added back to the taxpayer’s tax forthe second taxable year and the taxpayer is no longereligible for the LAMBRA incentives.

Record KeepingTo support the sales or use tax credit claimed on yourtax return, keep all records that document the purchaseof the property, such as the sales receipt and proof ofpayment. Also keep all records that identify or describe:• The property purchased (such as serial numbers,

etc.);• The amount of sales or use tax paid or incurred on

the purchase;• The location where the property is used; and• If purchased from a manufacturer located outside

California, records to substantiate that property ofcomparable quality and price was not available fortimely purchase and delivery from a Californiamanufacturer.

Business Expense DeductionThe cost of qualified property purchased for exclusiveuse in a LAMBRA may be deducted as a businessexpense in the first year the property is placed in servicein the LAMBRA.The type of property that qualifies for this special treat-ment is tangible personal property (not real estate) that isused for business purposes and is eligible for deprecia-tion. This includes most equipment and furnishingspurchased for exclusive use in the LAMBRA, but notoffice supplies or other small items that are normallyineligible for depreciation.For taxable years beginning on or after January 1, 1999,the maximum business expense deduction for all quali-fied property is the smaller of 40% of the cost of thequalified property or the following amounts, based onwhen the property was placed in service.

Maximum deduction

Taxable year of designation $40,000First taxable year after designation $40,000Second taxable year after designation $30,000Third taxable year after designation $30,000Each remaining taxable year after designation $20,000Note: See page 9 for LAMBRA designation dates

An election to treat the cost of qualified property as abusiness expense must be made in the year the propertyis first placed in service. An election is made by usingform FTB 3807, Local Agency Military Base RecoveryArea Deduction and Credit Summary, (filed with theCalifornia return) and claiming the deduction on theoriginal return for the year the property is placed inservice. The election is revocable only upon the writtenconsent of the FTB.However, this deduction is not allowed if the propertywas:• Transferred between members of an affiliated group;• Acquired as a gift or inherited;

Page 6 FTB Pub. 1102 2001

• Traded or exchanged for other property;• Received from a personal or business relation as

defined in IRC Section 267 or 707(b);• Described in IRC Section 168(f); or• Purchased by an estate or trust.

Depreciation• The deduction allowed under IRC Section 179 relating

to an election to expense certain depreciable busi-ness assets cannot be claimed if the taxpayer electsthe LAMBRA business expense deduction.

• Corporations may not claim additional first-yeardepreciation under California Revenue and TaxationCode Section 24356, if the taxpayer elects thebusiness expense deduction.

• Depreciation on the cost of the property in excess ofthe amount deducted may be claimed using anymethod of depreciation normally allowed.

Example 4: Three months after the location where youdo business has been designated a LAMBRA, youpurchase a baking oven that costs $20,000. You depreci-ate the oven over a 10-year period using the straight-linemethod. The LAMBRA business expense deduction youmay claim is $8,000 ($20,000 x 40%). You may also claimthe normal $100 of depreciation that is allowed for eachmonth the oven was in service during the taxable year.($20,000 - $8,000) ÷ 120 months = $100 per month

Deduction Recapture• The full amount of the deduction must be included in

income if the property is no longer used in a LAMBRAbefore the close of the second taxable year beginningafter the property was first placed in service in theLAMBRA.

• In addition, if at the close of the second taxable year ofoperating within the LAMBRA, the taxpayer does nothave a net increase of one or more jobs in this stateand one or more employees working within theLAMBRA during each of the taxable years, the amountof the LAMBRA business expense deduction previ-ously claimed must be added back to the taxpayer’sincome for the taxpayer’s second taxable year andthe taxpayer is no longer eligible for the LAMBRAincentives.

Basis Adjustment: As of the first day of the taxableyear in which the recapture event occurs, the recaptureamount is added back to the basis in the year of recap-ture and then depreciated over the remaining life of thequalified property.

Record KeepingYou should maintain information that will allow you tosubstantiate your claim for the first-year business ex-pense deduction. The records for each item should show(at least):• The property description and purchase price;• The date the property was first placed in service in the

LAMBRA; and• The location where the property is used.

Net Operating Loss (NOL)Carryover DeductionNOLs of individuals or corporations doing business in aLAMBRA may be carried over to future years to reducethe amount of taxable LAMBRA business income forthose years. The NOL carryover is determined by com-puting the business loss that results strictly from busi-ness activity in the LAMBRA. The LAMBRA property andpayroll factors used to determine the apportioned busi-ness NOL include worldwide amounts in the denominator.You may carry over 100% of the business loss from yourLAMBRA activity until exhausted or for a period not toexceed 15 years from the taxable year the NOL isgenerated.

ElectionIf you qualify to claim more than one type of NOL, youmust make an irrevocable election as to which type ofNOL you claim. This election must be made on theoriginal return for the year of the loss and be filed by theoriginal or extended due date of the return.For more information regarding other types of NOLs, seethe following forms or worksheets:• FTB 3805V, Net Operating Loss (NOL) Computation

and NOL and Disaster Loss Limitations – Individuals,Estates, and Trusts;

• FTB 3805Q, Net Operating Loss (NOL) Computationand NOL and Disaster Loss Limitations –Corporations;

• FTB 3805D, Net Operating Loss (NOL) Computationand Limitation – Pierce's Disease

• FTB 3805Z, Enterprise Zone Business Booklet,Worksheet VI; and

• FTB 3809, Targeted Tax Area Business Booklet,Worksheet V.

Limitations• LAMBRA NOL carryovers are allowed only for losses

occurring in a year beginning on or after the date thearea is designated as a LAMBRA and before theLAMBRA designation expires. (See page 9 forLAMBRA designation and expiration dates.)

• Financial institutions using bad debt reserve methodsmay carry over the LAMBRA NOL for a maximum offive taxable years.

• A LAMBRA NOL may not be applied to years prior tothe year in which the LAMBRA NOL occurred (nocarrybacks).

Example 5: For your 2000 taxable year, the businessactivities in the LAMBRA show a $5,000 NOL that is theexclusive result of your LAMBRA business activity.Because of the loss, you owe no tax on LAMBRAbusiness income. In 2001, your LAMBRA businessactivity shows taxable income of $8,000. You may carryover the 2000 $5,000 NOL to reduce your LAMBRAbusiness taxable income for 2001 to $3,000.

FTB Pub. 1102 2001 Page 7

Record KeepingTo support your claim of LAMBRA NOL carryover onyour California tax return, you should maintain (at least):• Records showing the date your business activities

began in the LAMBRA;• Accounting records showing that the loss was the

result of business activity in the LAMBRA; and• Financial data indicating that the income offset by the

LAMBRA NOL carryover is the product of businessactivity in the LAMBRA.

Determination of LAMBRAIncome or LAMBRA TaxFor businesses operating within and outside a LAMBRA,the amount of credit and NOL deduction you may claimon your California tax return is limited by the amount oftax or income attributable to business activities in aLAMBRA. For taxable years beginning on or afterJanuary 1, 1998, the formula used to determine the

amount of tax or income attributable to a LAMBRA isbased on the total amount of LAMBRA property andpayroll compared to the total amount of Californiaproperty and payroll of the business.Below are examples of doing business within andoutside of a LAMBRA:Example 6: You have a factory located in a LAMBRAand you also have a factory located outside a LAMBRA.In this situation, you would be required to use theformula.Example 7: You have employees who perform substan-tial services within a LAMBRA, and you have otheremployees who perform substantial services outside aLAMBRA. In this situation, you would be required to usethe formula.If you are doing business within and outside a LAMBRA,or in more than one LAMBRA, get form FTB 3807business booklet for more information about the formula.Refer to Part IV, Doing Business Totally Within aLAMBRA, Within and Outside a LAMBRA, or in MoreThan One LAMBRA.

Net Jobs Worksheet – Example:A Corporation employs four individuals prior to establishing operations in the LAMBRA on January 1, 1998. The followingis the employment information for the employees for the taxable year prior to operating in the LAMBRA:• Employee #1: Salaried, employed for 12 months.• Employee #2: Hourly, full-time; worked 2,080 hours per year.• Employee #3: Hourly, part-time; worked 1,500 hours per year.• Employee #4: Hourly, part-time; worked 1,500 hours per year.

The corporation moves its entire operations within the LAMBRA on January 1, 1998. At the end of the first taxable year ofoperation within the LAMBRA, the corporation employed the following individuals:• Employee #1: Salaried, employed for 24 months.• Employee #2: Hourly, full-time; worked 2,080 hours during the year.• Employee #3: Hourly, part-time; worked 2,000 hours during the year.• Employee #4: Hourly, part-time; worked 1,600 hours during the year.• Employee #5: Hourly, part-time; worked 1,600 hours during the year.

At the end of the second taxable year of operation in the LAMBRA, the corporation employed the following individuals:• Employee #1: Salaried, employed for 36 months.• Employee #2: Hourly, full-time; worked 2,080 hours during the year.• Employee #3: Hourly, part-time; worked 2,000 hours during the year.• Employee #4: Hourly, part-time; worked 1,700 hours during the year.• Employee #5: Hourly, part-time; worked 1,900 hours during the year.

The worksheet would be completed as follows: (a) (b)Taxable year prior 2nd taxable year

to operating after starting operations in the LAMBRA in the LAMBRA

1 Enter the total number of hours worked within the California by hourlyemployees during the taxable year in column (a) and column (b).The total hours per employee cannot exceed 2,000. If your onlybusiness in California began with your LAMBRA business, enter zeroin column (a) of line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________

2 Divide line 1 of each column by 2,000 . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________3 Enter the total number of months worked within California by

salaried employees. The total months per salaried employee cannotexceed 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________

5,000 a

2.5

12 d

7,600 b

3.8

12 d

Page 8 FTB Pub. 1102 2001

Qualified Taxpayer DefinedFor LAMBRAs, a qualified taxpayer means a taxpayerthat conducts a trade or business within a LAMBRA and,for the first two taxable years, has a net increase in jobsin this state and one or more employees working withinthe LAMBRA during each of the taxable years.

Determining the Net Increase in JobsThe net increase in the number of jobs is determined byapplying two tests:The first test requires a taxpayer to subtract the numberof full-time employees (defined as 2,000 paid hours peremployee per year) employed in this state in the taxableyear prior to commencing business operations in theLAMBRA from the total number of full-time employeesemployed in this state during the second taxable yearafter commencing business operations in the LAMBRA.

• For taxpayers that commence doing business in thisstate with their LAMBRA business operation, thenumber of employees for the taxable year prior tocommencing business operations in the LAMBRAshall be zero.

If the first test is met, the credit is allowed only if thesecond test is met, i.e. if one or more full-timeemployees are employed within the LAMBRA.To determine the first test of the net increase in jobsrequirement, the following formula is used:• The total number of hours worked in this state, by the

taxpayer’s CA employees (not to exceed 2,000 hoursper employee) who are paid an hourly wage, dividedby 2,000, plus,

• The total number of months worked in this state, bythe taxpayer’s CA employees who are salariedemployees, divided by 12.

Net Jobs Worksheet – Example (continued):

4 Divide line 3 of each column by 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________5 Add line 2 and line 4 of each column . . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________6 Subtract line 5, column (a) from line 5, column (b)________________

Enter the amount from line 6 on form FTB 3807, Part I, line 1a.Note: If the amount on line 6 is equal to or greater than one, then continue to line 7. If the amount on line 6 is less thanone, your business does not qualify for the LAMBRA tax incentives and you must recapture (in the current year) anyLAMBRA credits or deductions that were previously taken.

(a) (b)1st taxable year after 2nd taxable yearstarting operations after starting operations

in the LAMBRA in the LAMBRA7 Enter the total number of hours worked within the LAMBRA by hourly

employees during the taxable year in column (a) and column (b).The total hours per employee cannot exceed 2,000 . . . . . . . . . . . . . . ________________ ________________

8 Divide line 7 of each column by 2,000 . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________9 Enter the total number of months worked within the LAMBRA by

salaried employees. The total months per salaried employee cannotexceed 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________

10 Divide line 9 of each column by 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________11 Add line 8 and line 10 of each column . . . . . . . . . . . . . . . . . . . . . . . . ________________ ________________Enter the amount from line 11, column (a) on form FTB 3807, Part I, line 1b. Enter the amount from line 11, column (b) onform FTB 3807, Part I, line 1c.Note: If the amount on line 11, column (a) or column (b) is equal to or greater than one, your business qualifies for theLAMBRA tax incentives. If the amount on line 11, column (a) or line 11, column (b) is less than one, your business doesnot qualify for the LAMBRA tax incentives and you must recapture (in the current year) any LAMBRA credits or deduc-tions that were previously taken.

Calculation Legenda b c d

Employee #2 2,000 Employee #2 2,000 Employee #2 2,000 Employee #1Employee #3 1,500 Employee #3 2,000 Employee #3 2,000Employee #4 1,500 Employee #4 1,700 Employee #4 1,600

5,000 Employee #5 1,900 Employee #5 1,6007,600 7,200

1.3

13.5

14.8

7,200 d

3.6

12 d

14.6

7,600 b

3.8

12 d

14.8

FTB Pub. 1102 2001 Page 9

NOTE: For taxpayers that first commence doing busi-ness in the LAMBRA during the taxable year, the divi-sors “2,000” and “12” shall be multiplied by a fraction,the numerator of which is the number of months of thetaxable year that the taxpayer was doing business in theLAMBRA and the denominator of which is 12.If your business has a net increase in jobs for the firsttwo taxable years after commencing business opera-tions in the LAMBRA, you must also employ one or morefull-time employees within the LAMBRA in each year.To determine the second test of the net increase in jobsrequirement, the following formula is used:• The total number of hours worked in this state, by the

taxpayer’s LAMBRA employees (not to exceed 2,000hours per employee) who are paid an hourly wage,divided by 2,000, plus,

• The total number of months worked in this state, bythe taxpayer’s LAMBRA employees who are salariedemployees, divided by 12.

New BusinessFor taxpayers that began doing business in Californiawith their LAMBRA operation, the number of employeesfrom the taxable year prior to commencing businessoperations in the LAMBRA is zero.For taxpayers that began business during the taxableyear, the prior year employment information is proratedand the formula shown previously is modified by multiply-ing the denominators (2,000 and 12) by a fraction equalto the number of months the taxpayer was doing busi-ness in the LAMBRA divided by 12.Example 8: Y Corp. is a calendar year taxpayer thatemployed four individuals prior to establishing operationsin a LAMBRA on July 1, 2001.Employee #1 was salaried and employed for six months.Employee #2 was part-time and worked 900 hours.Employees #3 and #4 were part-time and worked 750hours.Total employees employed at the beginning of operationsin the LAMBRA equal:

Employee #2 – 900Number of Employee #3 – 750hours for hourly Employee #4 – 750wage employees 24002000 x (6 mos./12) 1000

= 2.40

PLUS

Number of monthsfor salaried employees Employee #1 – 612 x (6 mos./12) 6

= 1.00

Total employees, beginning 3.40

LAMBRA Locations,Designations, and ExpirationDatesLAMBRA tax incentives apply only to business activitiesand investments that are undertaken after the LAMBRAhas received final designation. Accordingly, certain costspaid or incurred on or after the designated dates, bybusinesses operating in these LAMBRAs may qualify forLAMBRA tax incentives.Note: The designation of the LAMBRA is for an eight-year period pursuant to California Government CodesSections 7105-7117.

LAMBRA Designation Date Expiration DateSouthern California International 02/01/1996 01/31/2004

Airport (Formerly George AirForce Base)

Castle Air Force Base 06/01/1996 05/31/2004Mare Island Naval Base 01/01/1999 12/31/2006San Bernardino International 04/01/2000 03/31/2008

Airport & Trade Center(Norton Air Force Base)

Alameda Naval Air Station 06/01/2000 05/31/2008Mather Field/McClellan Park 07/01/2000 06/30/2008Tustin Marine Corps Air Station 09/01/2001 08/31/2008Liberty Station (former San Diego

Naval Training Center (NTC) 06/01/2001 05/31/2009

Page 10 FTB Pub. 1102 2001

Codes for Principal Business ActivityThis list of principal business activities and their associatedcodes is designed to classify a business by the type ofactivity in which it is engaged to facilitate the administrationof the California Revenue and Taxation Code. For taxableyears beginning on or after January 1, 1998, these princi-pal business activity codes are based on the North Ameri-can Industry Classification System published by the UnitedStates Office of Management and Budget,1997 Edition.

Agriculture, Forestry, Fishingand HuntingCodeCrop Production111100 Oilseed & Grain Farming111210 Vegetable & Melon Farming

(including potatoes & yams)111300 Fruit & Tree Nut Farming111400 Greenhouse, Nursery, &

Floriculture Production111900 Other Crop Farming (including

tobacco, cotton, sugarcane,hay, peanut, sugar beet, & allother crop farming)

Animal Production112111 Beef Cattle Ranching &

Farming112112 Cattle Feedlots112120 Dairy Cattle & Milk Production112210 Hog & Pig Farming112300 Poultry & Egg Production112400 Sheep & Goat Farming112510 Animal Aquaculture (including

shellfish & finfish farms &hatcheries)

112900 Other Animal ProductionForestry and Logging113110 Timber Tract Operations113210 Forest Nurseries & Gathering

of Forest Products113310 LoggingFishing, Hunting and Trapping114110 Fishing114210 Hunting & TrappingSupport Activities for Agricultureand Forestry115110 Support Activities for Crop

Production (including cottonginning, soil preparation,planting, & cultivating)

115210 Support Activities for AnimalProduction

115310 Support Activities for Forestry

Mining211110 Oil & Gas Extraction212110 Coal Mining212200 Metal Ore Mining212310 Stone Mining & Quarrying212320 Sand, Gravel, Clay, & Ceramic

& RefractoryMinerals Mining & Quarrying212390 Other Nonmetallic Mineral

Mining & Quarrying213110 Support Activities for Mining

Utilities221100 Electric Power Generation,

Transmission, & Distribution221210 Natural Gas Distribution221300 Water, Sewage, & Other

Systems

ConstructionCodeBuilding, Developing, and GeneralContracting233110 Land Subdivision & Land

Development233200 Residential Building

Construction233300 Nonresidential Building

ConstructionHeavy Construction234100 Highway, Street, Bridge, &

Tunnel Construction234900 Other Heavy ConstructionSpecial Trade Contractors235110 Plumbing, Heating, & Air-

Conditioning Contractors235210 Painting & Wall Covering

Contractors235310 Electrical Contractors235400 Masonry, Drywall, Insulation,

& Tile Contractors235500 Carpentry & Floor Contractors235610 Roofing, Siding, & Sheet

Metal Contractors235710 Concrete Contractors235810 Water Well Drilling Contractors235900 Other Special Trade

Contractors

ManufacturingFood Manufacturing311110 Animal Food Mfg311200 Grain & Oilseed Milling311300 Sugar & Confectionery

Product Mfg311400 Fruit & Vegetable Preserving &

Specialty Food Mfg311500 Dairy Product Mfg311610 Animal Slaughtering and

Processing311710 Seafood Product Preparation

& Packaging311800 Bakeries & Tortilla Mfg311900 Other Food Mfg (including

coffee, tea, flavorings, &seasonings)

Beverage and Tobacco ProductManufacturing312110 Soft Drink & Ice Mfg312120 Breweries312130 Wineries312140 Distilleries312200 Tobacco ManufacturingTextile Mills and Textile Product Mills313000 Textile Mills314000 Textile Product MillsApparel Manufacturing315100 Apparel Knitting Mills315210 Cut & Sew Apparel

Contractors315220 Men’s & Boys’ Cut & Sew

Apparel Mfg

Code315230 Women’s & Girls’ Cut & Sew

Apparel Mfg315290 Other Cut & Sew Apparel Mfg315990 Apparel Accessories & Other

Apparel MfgLeather and Allied ProductManufacturing316110 Leather & Hide Tanning &

Finishing316210 Footwear Mfg (including

rubber & plastics)316990 Other Leather & Allied Product

MfgWood Product Manufacturing321110 Sawmills & Wood Preservation321210 Veneer, Plywood, &

Engineered Wood Product Mfg321900 Other Wood Product MfgPaper Manufacturing322100 Pulp, Paper, & Paperboard

Mills322200 Converted Paper Product MfgPrinting and Related SupportActivities323100 Printing & Related Support

ActivitiesPetroleum and Coal ProductsManufacturing324110 Petroleum Refineries

(including integrated)324120 Asphalt Paving, Roofing, &

Saturated Materials Mfg324190 Other Petroleum & Coal

Products MfgChemical Manufacturing325100 Basic Chemical Mfg325200 Resin, Synthetic Rubber, &

Artificial & Synthetic Fibers &Filaments Mfg

325300 Pesticide, Fertilizer, & OtherAgricultural Chemical Mfg

325410 Pharmaceutical & MedicineMfg

325500 Paint, Coating, & AdhesiveMfg

325600 Soap, Cleaning Compound, &Toilet Preparation Mfg

325900 Other Chemical Product &Preparation Mfg

Plastics and Rubber ProductsManufacturing326100 Plastics Product Mfg326200 Rubber Product MfgNonmetallic Mineral ProductManufacturing327100 Clay Product & Refractory Mfg327210 Glass & Glass Product Mfg327300 Cement & Concrete Product

Mfg327400 Lime & Gypsum Product Mfg327900 Other Nonmetallic Mineral

Product MfgPrimary Metal Manufacturing331110 Iron & Steel Mills & Ferroalloy

Mfg331200 Steel Product Mfg from

Purchased Steel331310 Alumina & Aluminum

Production & Processing331400 Nonferrous Metal (except

Aluminum) Production &Processing

331500 FoundriesFabricated Metal ProductManufacturing332110 Forging & Stamping332210 Cutlery & Handtool Mfg332300 Architectural & Structural

Metals Mfg332400 Boiler, Tank, & Shipping

Container Mfg332510 Hardware Mfg332610 Spring & Wire Product Mfg332700 Machine Shops; Turned

Product; & Screw, Nut, & BoltMfg

332810 Coating, Engraving, HeatTreating, & Allied Activities

Code332900 Other Fabricated Metal

Product MfgMachinery Manufacturing333100 Agriculture, Construction, &

Mining Machinery Mfg333200 Industrial Machinery Mfg333310 Commercial & Service

Industry Machinery Mfg333410 Ventilation, Heating, Air-

Conditioning, & CommercialRefrigeration Equipment Mfg

333510 Metalworking Machinery Mfg333610 Engine, Turbine, & Power

Transmission Equipment Mfg333900 Other General Purpose

Machinery MfgComputer and Electronic ProductManufacturing334110 Computer & Peripheral

Equipment Mfg334200 Communications Equipment

Mfg334310 Audio & Video Equipment Mfg334410 Semiconductor & Other

Electronic Component Mfg334500 Navigational, Measuring,

Electromedical, & ControlInstruments Mfg

334610 Manufacturing & ReproducingMagnetic & Optical Media

Electrical Equipment, Appliance, andComponent Manufacturing335100 Electric Lighting Equipment

Mfg335200 Household Appliance Mfg335310 Electrical Equipment Mfg335900 Other Electrical Equipment &

Component MfgTransportation EquipmentManufacturing336100 Motor Vehicle Mfg336210 Motor Vehicle Body & Trailer

Mfg336300 Motor Vehicle Parts Mfg336410 Aerospace Product & Parts

Mfg336510 Railroad Rolling Stock Mfg336610 Ship & Boat Building336990 Other Transportation

Equipment MfgFurniture and Related ProductManufacturing337000 Furniture & Related Product

ManufacturingMiscellaneous Manufacturing339110 Medical Equipment & Supplies

Mfg339900 Other Miscellaneous

Manufacturing

Wholesale TradeWholesale Trade, Durable Goods421100 Motor Vehicle & Motor Vehicle

Parts & Supplies Wholesalers421200 Furniture & Home Furnishing

Wholesalers421300 Lumber & Other Construction

Materials Wholesalers421400 Professional & Commercial

Equipment & SuppliesWholesalers

421500 Metal & Mineral (exceptPetroleum) Wholesalers

421600 Electrical Goods Wholesalers421700 Hardware, & Plumbing &

Heating Equipment & SuppliesWholesalers

421800 Machinery, Equipment, &Supplies Wholesalers

421910 Sporting & Recreational Goods& Supplies Wholesalers

421920 Toy & Hobby Goods &Supplies Wholesalers

421930 Recyclable MaterialWholesalers

421940 Jewelry, Watch, PreciousStone, & Precious MetalWholesalers

421990 Other Miscellaneous DurableGoods Wholesalers

FTB Pub. 1102 2001 Page 11

CodeWholesale Trade, Nondurable Goods422100 Paper & Paper Product

Wholesalers422210 Drugs & Druggists’ Sundries

Wholesalers422300 Apparel, Piece Goods, &

Notions Wholesalers422400 Grocery & Related Product

Wholesalers422500 Farm Product Raw Material

Wholesalers422600 Chemical & Allied Products

Wholesalers422700 Petroleum & Petroleum

Products Wholesalers422800 Beer, Wine, & Distilled

Alcoholic BeverageWholesalers

422910 Farm Supplies Wholesalers422920 Book, Periodical, & Newspa-

per Wholesalers422930 Flower, Nursery Stock, &

Florists’ Supplies Wholesalers422940 Tobacco & Tobacco Product

Wholesalers422950 Paint, Varnish, & Supplies

Wholesalers422990 Other Miscellaneous

Nondurable GoodsWholesalers

Retail TradeMotor Vehicle and Parts Dealers441110 New Car Dealers441120 Used Car Dealers441210 Recreational Vehicle Dealers441221 Motorcycle Dealers441222 Boat Dealers441229 All Other Motor Vehicle

Dealers441300 Automotive Parts, Accesso-

ries, & Tire StoresFurniture and Home FurnishingsStores442110 Furniture Stores442210 Floor Covering Stores442291 Window Treatment Stores442299 All Other Home Furnishings

StoresElectronics and Appliance Stores443111 Household Appliance Stores443112 Radio, Television, & Other

Electronics Stores443120 Computer & Software Stores443130 Camera & Photographic

Supplies StoresBuilding Material and GardenEquipment and Supplies Dealers444110 Home Centers444120 Paint & Wallpaper Stores444130 Hardware Stores444190 Other Building Material

Dealers444200 Lawn & Garden Equipment &

Supplies StoresFood and Beverage Stores445110 Supermarkets and Other

Grocery (except Convenience)Stores

445120 Convenience Stores445210 Meat Markets445220 Fish & Seafood Markets445230 Fruit & Vegetable Markets445291 Baked Goods Stores445292 Confectionery & Nut Stores445299 All Other Specialty Food

Stores445310 Beer, Wine, & Liquor StoresHealth and Personal Care Stores446110 Pharmacies & Drug Stores446120 Cosmetics, Beauty Supplies,

& Perfume Stores446130 Optical Goods Stores446190 Other Health & Personal Care

StoresGasoline Stations447100 Gasoline Stations (including

convenience stores with gas)

CodeClothing and Clothing AccessoriesStores448110 Men’s Clothing Stores448120 Women’s Clothing Stores448130 Children’s & Infants’ Clothing

Stores448140 Family Clothing Stores448150 Clothing Accessories Stores448190 Other Clothing Stores448210 Shoe Stores448310 Jewelry Stores448320 Luggage & Leather Goods

StoresSporting Goods, Hobby, Book, andMusic Stores451110 Sporting Goods Stores451120 Hobby, Toy, & Game Stores451130 Sewing, Needlework, & Piece

Goods Stores451140 Musical Instrument & Supplies

Stores451211 Book Stores451212 News Dealers & Newsstands451220 Prerecorded Tape, Compact

Disc, & Record StoresGeneral Merchandise Stores452110 Department stores452900 Other General Merchandise

StoresMiscellaneous Store Retailers453110 Florists453210 Office Supplies & Stationery

Stores453220 Gift, Novelty, & Souvenir

Stores453310 Used Merchandise Stores453910 Pet & Pet Supplies Stores453920 Art Dealers453930 Manufactured (Mobile) Home

Dealers453990 All Other Miscellaneous Store

Retailers (including tobacco,candle, & trophy shops)

Nonstore Retailers454110 Electronic Shopping & Mail-

Order Houses454210 Vending Machine Operators454311 Heating Oil Dealers454312 Liquefied Petroleum Gas

(Bottled Gas) Dealers454319 Other Fuel Dealers454390 Other Direct Selling

Establishments (includingdoor-to-door retailing, frozenfood plan providers, party planmerchandisers, & coffee-breakservice providers)

Transportation andWarehousingAir, Rail, and Water Transportation481000 Air Transportation482110 Rail Transportation483000 Water TransportationTruck Transportation484110 General Freight Trucking,

Local484120 General Freight Trucking,

Long-distance484200 Specialized Freight TruckingTransit and Ground PassengerTransportation485110 Urban Transit Systems485210 Interurban & Rural Bus

Transportation485310 Taxi Service485320 Limousine Service485410 School & Employee Bus

Transportation485510 Charter Bus Industry485990 Other Transit & Ground

Passenger TransportationPipeline Transportation486000 Pipeline TransportationScenic & Sightseeing Transportation487000 Scenic & Sightseeing

Transportation

CodeSupport Activities for Transportation488100 Support Activities for Air

Transportation488210 Support Activities for Rail

Transportation488300 Support Activities for Water

Transportation488410 Motor Vehicle Towing488490 Other Support Activities for

Road Transportation488510 Freight Transportation

Arrangement488990 Other Support Activities for

TransportationCouriers and Messengers492110 Couriers492210 Local Messengers & Local

DeliveryWarehousing and Storage493100 Warehousing & Storage

(except lessors ofminiwarehouses & self-storage units)

InformationPublishing Industries511110 Newspaper Publishers511120 Periodical Publishers511130 Book Publishers511140 Database & Directory

Publishers511190 Other Publishers511210 Software PublishersMotion Picture and Sound RecordingIndustries512100 Motion Picture & Video

Industries (except videorental)

512200 Sound Recording IndustriesBroadcasting andTelecommunications513100 Radio & Television

Broadcasting513200 Cable Networks & Program

Distribution513300 Telecommunications (including

paging, cellular, satellite, &other telecommunications)

Information Services and DataProcessing Services514100 Information Services

(including news syndicates,libraries, & on-line informationservices)

514210 Data Processing Services

Finance and InsuranceDepository Credit Intermediation522110 Commercial Banking522120 Savings Institutions522130 Credit Unions522190 Other Depository Credit

IntermediationNondepository Credit Intermediation522210 Credit Card Issuing522220 Sales Financing522291 Consumer Lending522292 Real Estate Credit (including

mortgage bankers &originators)

522293 International Trade Financing522294 Secondary Market Financing522298 All Other Nondepository Credit

IntermediationActivities Related to CreditIntermediation522300 Activities Related to Credit

Intermediation (including loanbrokers)

Securities, Commodity Contracts,and Other Financial Investments andRelated Activities523110 Investment Banking &

Securities Dealing523120 Securities Brokerage523130 Commodity Contracts Dealing523140 Commodity Contracts

Brokerage

Code523210 Securities & Commodity

Exchanges523900 Other Financial Investment

Activities (including portfoliomanagement & investmentadvice)

Insurance Carriers and RelatedActivities524140 Direct Life, Health, & Medical

Insurance & ReinsuranceCarriers

524150 Direct Insurance & Reinsur-ance (except Life, Health, &Medical) Carriers

524210 Insurance Agencies &Brokerages

524290 Other Insurance RelatedActivities

Funds, Trusts, and Other FinancialVehicles525100 Insurance & Employee Benefit

Funds525910 Open-End Investment Funds

(Form 1120-RIC)525920 Trusts, Estates, & Agency

Accounts525930 Real Estate Investment Trusts

(Form 1120-REIT)525990 Other Financial Vehicles

Real Estate and Rental andLeasingReal Estate531110 Lessors of Residential

Buildings & Dwellings531120 Lessors of Nonresidential

Buildings (exceptMiniwarehouses)

531130 Lessors of Miniwarehouses &Self-Storage Units

531190 Lessors of Other Real EstateProperty

531210 Offices of Real Estate Agents& Brokers

531310 Real Estate PropertyManagers

531320 Offices of Real EstateAppraisers

531390 Other Activities Related toReal Estate

Rental and Leasing Services532100 Automotive Equipment Rental

& Leasing532210 Consumer Electronics &

Appliances Rental532220 Formal Wear & Costume

Rental532230 Video Tape & Disc Rental532290 Other Consumer Goods Rental532310 General Rental Centers532400 Commercial & Industrial

Machinery & EquipmentRental & Leasing

Lessors of Nonfinancial IntangibleAssets (except copyrighted works)533110 Lessors of Nonfinancial

Intangible Assets (exceptcopyrighted works)

Professional, Scientific, andTechnical ServicesLegal Services541110 Offices of Lawyers541190 Other Legal ServicesAccounting, Tax Preparation,Bookkeeping, and Payroll Services541211 Offices of Certified Public

Accountants541213 Tax Preparation Services541214 Payroll Services541219 Other Accounting ServicesArchitectural, Engineering, andRelated Services541310 Architectural Services541320 Landscape Architecture

Services541330 Engineering Services541340 Drafting Services541350 Building Inspection Services

Page 12 FTB Pub. 1102 2001

CodeOther Ambulatory Health CareServices621900 Other Ambulatory Health Care

Services (including ambulanceservices & blood & organbanks)

Hospitals622000 HospitalsNursing and Residential CareFacilities623000 Nursing & Residential Care

FacilitiesSocial Assistance624100 Individual & Family Services624200 Community Food & Housing,

& Emergency & Other ReliefServices

624310 Vocational RehabilitationServices

624410 Child Day Care Services

Arts, Entertainment, andRecreationPerforming Arts, Spectator Sports,and Related Industries711100 Performing Arts Companies711210 Spectator Sports (including

sports clubs & racetracks)711300 Promoters of Performing Arts,

Sports, & Similar Events711410 Agents & Managers for

Artists, Athletes, Entertainers,& Other Public Figures

711510 Independent Artists, Writers,& Performers

Museums, Historical Sites, andSimilar Institutions712100 Museums, Historical Sites, &

Similar InstitutionsAmusement, Gambling, andRecreation Industries713100 Amusement Parks & Arcades713200 Gambling Industries713900 Other Amusement &

Recreation Industries(including golf courses, skiingfacilities, marinas, fitnesscenters, & bowling centers)

Accommodation and FoodServicesAccommodation721110 Hotels (except casino hotels)

& Motels721120 Casino Hotels721191 Bed & Breakfast Inns721199 All Other Traveler

Accommodation721210 RV (Recreational Vehicle)

Parks & Recreational Camps721310 Rooming & Boarding Houses

Code541360 Geophysical Surveying &

Mapping Services541370 Surveying & Mapping (except

Geophysical) Services541380 Testing LaboratoriesSpecialized Design Services541400 Specialized Design Services

(including interior, industrial,graphic, & fashion design)

Computer Systems Design andRelated Services541511 Custom Computer Program-

ming Services541512 Computer Systems Design

Services541513 Computer Facilities Manage-

ment Services541519 Other Computer Related

ServicesOther Professional, Scientific, andTechnical Services541600 Management, Scientific, &

Technical Consulting Services541700 Scientific Research &

Development Services541800 Advertising & Related

Services541910 Marketing Research & Public

Opinion Polling541920 Photographic Services541930 Translation & Interpretation

Services541940 Veterinary Services541990 All Other Professional,

Scientific, & TechnicalServices

Management of Companies(Holding Companies)551111 Offices of Bank Holding

Companies551112 Offices of Other Holding

Companies

Administrative and Supportand Waste Management andRemediation ServicesAdministrative and Support Services561110 Office Administrative Services561210 Facilities Support Services561300 Employment Services561410 Document Preparation

Services561420 Telephone Call Centers561430 Business Service Centers

(including private mail centers& copy shops)

561440 Collection Agencies561450 Credit Bureaus561490 Other Business Support

Services (including reposses-sion services, court reporting,& stenotype services)

Code561500 Travel Arrangement &

Reservation Services561600 Investigation & Security

Services561710 Exterminating & Pest Control

Services561720 Janitorial Services561730 Landscaping Services561740 Carpet & Upholstery Cleaning

Services561790 Other Services to Buildings &

Dwellings561900 Other Support Services

(including packaging & labelingservices, & convention & tradeshow organizers)

Waste Management and RemediationServices562000 Waste Management &

Remediation Services

Educational Services611000 Educational Services (including

schools, colleges, &universities)

Health Care and SocialAssistanceOffices of Physicians and Dentists621111 Offices of Physicians (except

mental health specialists)621112 Offices of Physicians, Mental

Health Specialists621210 Offices of DentistsOffices of Other Health Practitioners621310 Offices of Chiropractors621320 Offices of Optometrists621330 Offices of Mental Health

Practitioners (exceptPhysicians)

621340 Offices of Physical, Occupa-tional & Speech Therapists, &Audiologists

621391 Offices of Podiatrists621399 Offices of All Other Miscella-

neous Health PractitionersOutpatient Care Centers621410 Family Planning Centers621420 Outpatient Mental Health &

Substance Abuse Centers621491 HMO Medical Centers621492 Kidney Dialysis Centers621493 Freestanding Ambulatory

Surgical & Emergency Centers621498 All Other Outpatient Care

CentersMedical and Diagnostic Laboratories621510 Medical & Diagnostic

LaboratoriesHome Health Care Services621610 Home Health Care Services

CodeFood Services and Drinking Places722110 Full-Service Restaurants722210 Limited-Service Eating

Places722300 Special Food Services

(including food servicecontractors & caterers)

722410 Drinking Places (AlcoholicBeverages)

Other ServicesRepair and Maintenance811110 Automotive Mechanical &

Electrical Repair &Maintenance

811120 Automotive Body, Paint,Interior, & Glass Repair

811190 Other Automotive Repair &Maintenance (including oilchange & lubrication shops &car washes)

811210 Electronic & PrecisionEquipment Repair &Maintenance

811310 Commercial & IndustrialMachinery & Equipment(except Automotive &Electronic) Repair &Maintenance

811410 Home & Garden Equipment& Appliance Repair &Maintenance

811420 Reupholstery & FurnitureRepair

811430 Footwear & Leather GoodsRepair

811490 Other Personal & HouseholdGoods Repair & Maintenance

Personal and Laundry Services812111 Barber Shops812112 Beauty Salons812113 Nail Salons812190 Other Personal Care

Services (including diet &weight reducing centers)

812210 Funeral Homes & FuneralServices

812220 Cemeteries & Crematories812310 Coin-Operated Laundries &

Drycleaners812320 Drycleaning & Laundry

Services (except Coin-Operated)

812330 Linen & Uniform Supply812910 Pet Care (except Veterinary)

Services812920 Photofinishing812930 Parking Lots & Garages812990 All Other Personal ServicesReligious, Grantmaking, Civic,Professional, and SimilarOrganizations813000 Religious, Grantmaking,

Civic, Professional, & SimilarOrganizations

FTB Pub. 1102 2001 Page 13

Related FTB Forms andPublicationsFTB 3805Z Enterprise Zone Business BookletFTB 3806 Los Angeles Revitalization Zone

Business BookletFTB 3807 Local Agency Military Base Recovery

Area Business BookletFTB 3808 Manufacturing Enhancement Area

Business BookletFTB 3809 Targeted Tax Area Business BookletFTB 3535 Manufacturers’ Investment CreditFTB Pub. 1047 Guidelines for Enterprise Zone

Tax IncentivesFTB Pub. 1145 Guidelines for the Manufacturing

Enhancement Area Tax IncentiveFTB Pub. 1157 Guidelines for Targeted Tax Area Tax

IncentivesFTB 1113 Frequently Asked Questions About the

Manufacturers’ Investment Credit(MIC)

FTB 1118 Frequently Asked Questions About theLocal Agency Military Base RecoveryArea (LAMBRA) Incentives

FTB 1126 Frequently Asked Questions About theEnterprise Zone Incentives

Where to Get Tax Forms andPublicationsBy Internet – You can download, view, and printCalifornia tax forms and publications. Go to our Websiteat: www.ftb.ca.govOther state agencies' information can be accessedthrough the State Agency Index located on the CaliforniaState Website at: www.ca.govBy phone – Use our automated toll-free phone serviceto order FTB 3807. Call (800) 338-0505, select personalincome tax forms requests, and enter code 939 whenyou are instructed to do so. Use the general telephoneservice to order all other forms and publications listed onthis page.Please allow two weeks to receive your order. If you liveoutside California, please allow three weeks to receiveyour order.In person – Many libraries, post offices, and banksprovide free California personal income tax bookletsduring the filing season. Most libraries and some quickprint businesses have forms and schedules to photo-copy (a nominal fee may apply). Note: Employees atlibraries, post offices, banks, and quick print businessescannot provide tax information or assistance.By mail – Write to:

TAX FORMS REQUEST UNITFRANCHISE TAX BOARDPO BOX 307RANCHO CORDOVA CA 95741-0307

Economic Development AreaInformationFurther information about the LAMBRA tax incentives isavailable from the Franchise Tax Board:

Telephone: (916) 845-3464Fax: (916) 845-6791Website: www.ftb.ca.gov

General Toll-Free PhoneServiceOur general toll-free phone service is available:• Monday - Friday, 7 a.m. until 8 p.m.; and• Saturdays, 8 a.m. until 5 p.m.Note: We may modify these hours without notice tomeet operational needs.From within the United States . . . . . . . . . (800) 852-5711From outside the United States . . . . . . . . (916) 845-6500

(not toll-free)Assistance for Persons with DisabilitiesThe FTB complies with the Americans with DisabilitiesAct (ADA). Persons with a hearing or speech impair-ment, call:From voice phone . . . . . . . . . . . . . . . . . . (800) 735-2922

(California Relay Service)From TTY/TDD . . . . . . . . . . . . . . . . . . . . (800) 822-6268

(Direct TTY Line to FTB Customer Service)For all other assistance orspecial accommodations, call . . . . . . . . . (800) 852-5711For federal tax questions:Call the IRS at . . . . . . . . . . . . . . . . . . . . . (800) 829-1040

Asistencia Bilingüe en EspañolPara obtener servicios en Español y asistencia paracompletar su declaración de impuestos/formularios,llame al número de teléfono (anotado arriba) que lecorresponde.