California has enacted a budget for the 2010-2011 fiscal year. The income and franchise tax provisions of the budget provided in Senate Bill (“SB”) 858, expected to be signed by the Governor, extend the suspension of net operating loss deductions, relax the 20-percent corporate understatement penalty, and remove recently enacted…
On August 31, 2010, the New Jersey Tax Court issued a memorandum decision in Beneficial New Jersey, Inc. v. Director, Division of Taxation,1 concluding that the taxpayer satisfied one of the enumerated exceptions to the interest addback statute under N.J.S.A. 54:10A-4(k)(2)(I), and was thus entitled to its interest expense deductions.…
California Sales and Use Tax Regulation 1698.5, which sets forth comprehensive procedures for sales and use tax audits, has been approved by the California Office of Administrative Law. The new regulation, which was proposed by the California Board of Equalization (BOE), goes into effect August 18, 2010. According to the…
The California Franchise Tax Board (FTB) has recently issued a Legal Notice generally providing that taxpayers who previously filed incomplete IRS Forms 8886 or failed to file Forms 8886 with FTB will avoid penalties by filing completed forms within 60 days. Taxpayers that may have concerns regarding Form 8886 FTB…
The statutory requirements for filing a claim for refund are set for in Cal. Rev. & Tax. Code 19322. The statute requires the claim to be (1) in writing; (2) signed by an authorized person; and (3) must state the “specific grounds” for the refund claim. The regulatory provisions and…
For purposes of the California sales and use tax law, a “sale” and “purchase” do not include the design, development, writing, translation, fabrication, lease or transfer for a consideration of title or possession of a custom computer program. An issue that often arises with respect to a custom computer program…
Pursuant to Cal. Rev. & Tax. Code Section 19306(a) a claim for refund typically must be filed within for 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),…
Taxpayers intending to change their residency for California personal income tax purposes should be aware that intent alone is insufficient to establish new residency. Moreover, intent coupled with physical acts of starting to move or transition to another state is also insufficient to establish new residency. The California courts have…
Pursuant to Cal. Rev. & Tax. Code Section 17041, a California resident is taxed on all income, from whatever sources derived. In contrast, Cal. Rev. & Tax. Code Sections 17041(b) and 17951 state that nonresidents and part-year residents of California are only taxable on income from sources within California. Exactly…
Pursuant to Cal. Rev. & Tax. Code Section 17014(a), a resident is an individual who (1) is in California for “other than a temporary or transitory purpose” or (2) is “domiciled” in California but is outside California for “a temporary or transitory purpose.” Presence within California for more than nine…