Articles Posted in California

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https://seesalt.pillsburylaw.com/files/2020/05/250px-Seal_of_California.svg_.pngIn the Appeal of Southern Minnesota Beet Sugar Cooperative (2023-OTA-342P) (Beet Sugar), the California Office of Tax Appeals (OTA) issued a precedential opinion holding the California Franchise Tax Board (FTB) is not entitled to apply its FTB Legal Ruling 2006-01 (Apr. 28, 2006) to prohibit taxpayers from including in their apportionment factors property, payroll, and sales that generated statutorily deductible income. The OTA’s guidance on the FTB’s interpretation and application of Legal Ruling 2006-01 in this opinion also has implications beyond the specific issue in Beet Sugar, as the FTB has been attempting to expand the application of the limited legal ruling to other inapplicable situations. For example, an opinion by the OTA in the Appeal of Microsoft Corporation & Subsidiaries (OTA Case Number 21037336) is also anticipated to be issued soon, which appeal concerns whether the FTB is entitled to apply Legal Ruling 2006-01 to prohibit taxpayers from including in their apportionment sales factors statutorily deductible foreign dividend amounts.

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The entire Pillsbury State and Local Tax (SALT) Team is very proud to congratulate our practice leader Carley Roberts for receiving the prestigious Benjamin F. Miller award during this year’s California Annual Meeting of the Tax Bar and Tax Policy Conference.

This award is presented annually by the California Lawyers Association’s Taxation Section to recipients recognized for having achieved professional excellence and notable contributions in the field of state and local taxation law akin to the attorney the award is named after, Benjamin F. Miller.

Carley has been achieving professional excellence and notable contributions to SALT, both in California and nationwide, for approximately 25 years and counting.  Throughout this quarter century, Carley has also worked prolifically towards successfully garnering effective collaboration and cooperation between the private and public sectors of SALT.

Congratulations Carley!

Read more: Carley Roberts Honored with Benjamin F. Miller Award by California Lawyers Association

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A California trial court denied summary judgment in the American Catalog Mailers Association’s (ACMA) action that seeks to invalidate Franchise Tax Board (FTB) guidance that says certain online activities exceed the protections of Public Law 86-272 for state income tax purposes.  However, the court signaled it may invalidate the FTB’s guidance on the basis it constitutes underground regulations and violates California’s Administrative Procedure Act.https://seesalt.pillsburylaw.com/files/2020/05/250px-Seal_of_California.svg_.png Continue Reading ›

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Pillsbury SALT attorneys Zachary Atkins, Craig Becker, Carley Roberts, & Richard Nielsen discuss California Assembly Bill 52.  AB 52 would provide corporation and personal income tax credits for local sales and use and district taxes paid on machinery and equipment primarily used in manufacturing, research and development, electric power generation or production, or electric power storage and distribution.

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https://seesalt.pillsburylaw.com/files/2020/05/250px-Seal_of_California.svg_.pngThe California Office of Tax Appeals (OTA) held a California resident was not entitled to claim an other state tax credit (OSTC) for taxes paid to Massachusetts because gain from the sale of an LLC membership interest was wholly sourced to the taxpayer’s domicile under California law. Continue Reading ›

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California Democratic lawmakers recently introduced Assembly Constitutional Amendment 11 (ACA 11) which proposes to abolish the State Board of Equalization (BOE) and reassign its responsibilities to other state tax agencies effective January 1, 2026. Continue Reading ›

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For years, some California counties have been imposing disproportionately higher property tax rates on centrally assessed property despite the state constitutional mandate that this property be assessed like locally assessed property.

In a challenge brought by centrally assessed utilities, the California Court of Appeal conceded that the higher property tax rates disproportionally burden utility company property but concluded that this disparity does not violate the California Constitution.

Click here to read the full article.

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In addition to the tax relief announced in January, the California Franchise Tax Board (FTB) has automatically extended the income tax filing and payment deadlines for businesses and individuals affected by severe winter storms in California until October 16, 2023.

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Following the IRS’s announcement of tax relief for 41 California counties* affected by severe winter storms, the California Franchise Tax Board (FTB) and California Department of Tax and Fee Administration (CDTFA) announced similar relief for state-level taxes and fees.https://seesalt.pillsburylaw.com/files/2020/05/250px-Seal_of_California.svg_.png

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In the Appeal of Sheward, 2022-OTA-228P (May 25, 2022), the California Office of Tax Appeals (OTA) held the California Franchise Tax Board (FTB) failed to follow its own market-based sourcing apportionment regulation by prematurely using reasonable approximation to source the income of a multistate unitary business.  During the tax year 2017, the taxpayer operated a business providing in-person services as a horse racetrack judge in California and Minnesota but failed to file a California return.  Related to such services, the taxpayer received Form 1099s from the State of California, the State of Minnesota, and Minnesota Harness Racing, Inc.

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