Subcomponents of a taxpayer’s project may qualify as pilot models for research expense deduction purposes under California corporate tax law. Responding to the taxpayer’s request for a ruling, the Chief Counsel of the Franchise Tax Board concluded that the subcomponents were not excluded from qualification as pilot models under federal Treasury Regulation section 1.174-2(a)(4) & (5), as applicable for California purposes. The Chief Counsel reached this conclusion because the taxpayer discretely produced the subcomponents to resolve uncertainty regarding the appropriate design of the subcomponents before they were placed into service. Chief Counsel Ruling 2024-01, California Franchise Tax Board, March 2024