It’s estimated that 2,000 small-business investors will have to pay these retroactive taxes.

◼ California Wants Small-Business Owners To Pay Back $120 Million In Tax Breaks - CBS Sacramento

Small-business investors in California were promised big breaks five years ago, but now they’re being told to pay up, instead after a court ruling.

After following the law, many of them are getting hit with tax bills as high as $250,000....

“They relied on California law as it was written, that they would get a tax break if they invested in certain kinds of businesses,” Lieu said.

But a court ruled in December that practice by the state was unconstitutional. Now, the Franchise Tax Board wants its money....

“It sends a message that you can’t trust government. If you comply in good faith with the rules, they can go back and penalize you.”