In “California Office of Tax Appeals Rejects Franchise Tax Board’s Broad Interpretation of California’s “Doing Business” Standard,” the SALT team examines the board’s rejection of the California Franchise Tax Board’s (FTB) extremely narrow interpretation and application of Swart Enterprises, Inc. v. Franchise Tax Board, involving California’s “doing business” standard.
(This article originally was published by Law360 on October 7, 2017.) On Sept. 16, 2017, California Governor Jerry Brown signed Assembly Bill (A.B.) 131 into law,[1] which takes effect immediately and makes various changes to the Taxpayer Transparency and Fairness Act of 2017 enacted on June 27, 2017.[2] The Act…
(This alert was also published as a bylined article by Law360 on July 31, 2015.) Over five years into a personal income tax residency audit by the California Franchise Tax Board (FTB), Gilbert Hyatt filed a civil suit in Nevada state court against FTB alleging tortious conduct by FTB auditors.…
The California Franchise Tax Board has issued a chief counsel ruling stating that a registered broker-dealer must include the entire sales price received from the sale of securities—including the return of capital—in the sales apportionment factor. Interestingly, the chief counsel determined that California’s alternative apportionment provisions do not apply to…
California generally conforms to the federal provisions regarding net operating loss (NOL) deductions. However, California’s seemingly endless battle with budget deficits has resulted in periodic suspensions of California taxpayers’ ability—both personal and corporate—to take NOL deductions. For example, California suspended NOL deductions for the 2002 and 2003 taxable years. More…
Beginning August 1, California income taxpayers that used a tax shelter or that have unreported income from the use of an offshore financial arrangement for tax years beginning before January 1, 2011, will have the opportunity to pay tax and interest on income related to those transactions and avoid a…
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 California water’s-edge election has proved immensely popular with both foreign and domestic parent corporations potentially engaged in a worldwide unitary business. Many elections are made to reduce or minimize California franchise tax, while others are made to simplify or reduce the compliance burdens under California’s worldwide combined reporting method.…
California corporate and individual taxpayers with pending audits, protests, appeals or settlement proceedings with the California Franchise Tax Board (FTB), or with comparable proceedings pending with he California State Board of Equalization (BOE) should pay particular attention to new penalties recently enacted by the Legislature and Gov. Arnold Schwarzenegger as…
Legislation: Income and Franchise Taxation 2002 Cal Stat. ch. 488 is the major tax bill for the 2002 Legislative Session that responds to California’s $23.6 billion budget gap: (1) it conforms California law to federal law relative to the bad debt reserve of large banks (California had permitted charge-offs to…