Gillette Wins. You Win. Taxpayers Should Hurry to File California Refund Claims Before the Fall Deadline

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Executive summary and action item

Today, a California Court of Appeal held that taxpayers have the option of electing to single-weight (as opposed to double-weight) their sales factor to compute their California apportionment fraction.1 We encourage any taxpayer with positive taxable income whose California property and payroll factors are less than their sales factor to file a refund claim. Refund claims for the 2007 year will be due soon for calendar-year taxpayers that filed on extension: California’s four-year statute of limitations expires on the fourth anniversary of when the original return was filed on extension.

Your refund claim simply needs to raise the issue to the effect that your company is entitled to compute its apportionment fraction following the method provided by the Multistate Tax Compact. Specifically, the refund claim should state that your company is entitled to compute its apportionment fraction using the equally weighted sales factor as provided for under the compact, without regard to any provisions of California law that purport to deviate from the compact. The claim needs to be submitted to...

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Topics:  Franchise Tax Board, Gillette v Franchise Tax Board, Multistate Tax Compact, Sales Factor, Tax Refunds

Published In: Administrative Agency Updates, Civil Procedure Updates, General Business Updates, Constitutional Law Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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