Cal. Rev. & Tax. Code Section 19043.5 was added by the California Legislature during the 2001-2002 legislative session. Under the prior law, if an adjustment proposed by the Franchise Tax Board (FTB) did not result in additional tax due, but only affected the amount of a tax credit that may…
Under Cal. Rev. & Tax. Code Section 19306(a), a claim for refund typically must be filed within four years from the date the return was filed, four years from the last day prescribed for filing the return (determined without regard to any extension of time for filing the return) or…
The accuracy-related and fraud penalties under Cal. Rev. & Tax. Code Section 19164 are generally determined in accordance with federal law. The federal counterparts to Section 19164 are I.R.C. Sections 6662-6665. Defending against the accuracy-related and fraud penalties can be difficult and requires a solid understanding of the applicable exceptions…
Cal. Rev. & Tax. Code Section 24425 operates to prevent taxpayers from deducting expenses incurred to generate nontaxable income. Analysis Expense attribution has become an important issue in California in light of the Ceridian, Farmer Brothers, and Abbot Laboratories decisions in which the dividends received deduction treatment under Cal. Rev.…
Franchise Income Tax: Apportionment and Allocation of Business and Nonbusiness Income In General Motors Corp. v. Franchise Tax Board, the first of the six “gross receipts” cases in court in California to be decided in the Court of Appeal, the Second Appellate District addressed the issue of what the term…
Income and Franchise Taxation: Apportionment/Allocation and Business/NonBusiness Income In Appeal of Polaroid Corp., the State Board of Equalization (SBE) held that proceeds received by the taxpayer from apatent infringement lawsuit were business income and must be included in the (numerator and the denominator of the) sales factor. The SBE also…
Assembly Bill 2412 (Migden and Aroner), now pending in the California Legislature, would drastically expand the California rules for nexus to tax under the California Sales and Use Tax Law. The bill should be of high interest to Internet retailers who do not have a physical presence in California. A.B.…