News & Analysis as of

Franchise Tax Board

Swart's Athwart California's Taxation of Out-of-State Corporations

by Nossaman LLP on

The California Franchise Tax Board (“FTB”) started 2017 with a setback as the Court of Appeal for the Fifth Appellate District held in Swart Enterprises, Inc. v. Franchise Tax Board that the FTB could not impose California’s...more

California Court of Appeal Holds Doing Business ? Any Activity Engaged In for Pecuniary Gain

On January 12, 2017, the California Court of Appeal held in a published opinion that a taxpayer passively holding a 0.2 percent interest in a California-based limited liability company (CA LLC) was not “doing business” in the...more

O Frabjous Day! Court Holds Passive Member Is Not “Doing Business”

by Allen Matkins on

The State of California imposes its franchise tax on every corporation (other than a bank, financial corporation or exempt corporation) that is “doing business” in California. Cal. Rev. & Tax Code § 23151. This tax is...more

California FTB Schedules Interested Parties Meeting on Short Notice to Discuss Issues in the Regulations on Sourcing Income from...

by McDermott Will & Emery on

The California Franchise Tax Board has scheduled an Interested Parties Meeting to discuss proposed changes to its apportionment regulations. Several years ago, when the statute called for sourcing receipts from services and...more

Did You Make the Multistate Tax Compact Apportionment Election in California? Watch Out for Penalties

by Reed Smith on

On December 31, 2015, the California Supreme Court ruled against the taxpayer in The Gillette Company v. Franchise Tax Board. The United States Supreme Court denied review of Gillette on October 11, 2016. Thus, Gillette is...more

Breaking News: U.S. Supreme Court Denies Review of Gillette

by Reed Smith on

On October 11, 2016, the United States Supreme Court denied review of the California Supreme Court’s decision in The Gillette Company & Subs. v. California Franchise Tax Board. The issue was whether Gillette was required to...more

Res Judicata: California Mandamus Claims Are Not Fundamentally Distinct From Federal Counterparts Under California’s Primary...

The age-old doctrine of res judicata is as strong as ever in California. In Franceschi v. Franchise Tax Board, et al. (B267719, filed July 8, 2016) the California Court of Appeal Second District, held that Ernest Franceschi’s...more

Operation Underground Economy

The California Department of Insurance’s news release on its latest efforts to target the underground economy reminds me of some lines of Mission Impossible: “this is not mission difficult, Mr. Hunt. It’s mission impossible.”...more

How To Revive A Suspended Corporation

by Allen Matkins on

Yesterday’s post concerned the circumstances that will cause the California Franchise Tax Board to suspend a corporation’s rights, powers, and privileges to conduct business in California. Suspension, however, is reversible,...more

Suspension By The Franchise Tax Board

by Allen Matkins on

Yesterday’s post concerned the two circumstances in which the Secretary of State might suspend a corporation. The California Franchise Tax Board will suspend a corporation if it fails to pay taxes, penalties, fees or...more

Corporate Suspension By The California Secretary Of State

by Allen Matkins on

In California, a corporation may find its powers, rights and privileges suspended by either the Secretary of State or by the Franchise Tax Board.  Today’s post discusses the two roads to suspension by the California Secretary...more

California Steps Up Criminal Tax Enforcement

by Sanford Millar on

California has a multi-agency task force known as the Revenue Recovery and Enforcement Team that was established to attack criminal tax evasion. The stated goals of the team are: (a) According to the State Board of...more

Supreme Court Decides Franchise Tax Board of California v. Hyatt

by Faegre Baker Daniels on

On April 19, 2016, the Supreme Court decided Franchise Tax Board of California v. Hyatt, No. 14-1175, holding that under the Full Faith and Credit Clause, U.S. Const., Art. IV, § 1, a State may not decline to apply the law of...more

California FTB to Discuss Apportionment of Combined Group Income

by McDermott Will & Emery on

The California Franchise Tax Board (FTB) will hold a second Interested Parties Meeting at their office in Rancho Cordova on April 20, 2016, dealing with the apportionment of income for combined reporting groups with both...more

The Time to Consider San Francisco Gross Receipts Tax Refund Claims is Now

The San Francisco Gross Receipts Tax (GRT) incorporates provisions of both the federal income tax and the California income and franchise tax. Taxpayers should review their federal and California tax reporting that may impact...more

California Supreme Court holds against Gillette in significant tax case

by Dentons on

In a unanimous decision in Gillette Co. v. Franchise Tax Board, the California Supreme Court on December 31 held that the Multistate Tax Compact is not a binding reciprocal agreement among its members. Therefore, the...more

California Supreme Court Holds Multistate Tax Compact is Not Binding

On December 31, 2015, the California Supreme Court closed the book on California’s Multistate Tax Compact election saga, unanimously holding that the Compact is not a binding contract among its members and the State was not...more

Is The FTB’s Argument Nothing More Than Blowing In The Wind?

by Allen Matkins on

Readers may remember this blog post from September of last year: Nevada Supreme Court Upholds Fraud Verdict Against The California Franchise Tax Board. The subject of the post was Franchise Tax Bd. v. Hyatt, 335 P.3d 125...more

California Tax Developments - A Reed Smith Quarterly Update (2nd Quarter 2015)

by Reed Smith on

Case Updates - BREAKING NEWS: Gillette Oral Arguments Scheduled - The California Supreme Court has scheduled oral arguments in the Gillette Multistate Tax Compact case. This comes three years after the California...more

Cash Businesses, Poor Records and Obstruction Charges, Ouch!

by Sanford Millar on

Cash business operators are often prone to under report income or overstate deductions when filing tax returns. The effect of engaging in such conduct can be criminal charges, including tax evasion, money laundering and...more

Tax and Estate Planning Newsletter - Summer 2015

by Archer Norris PLC on

Dear Clients and Colleagues: This summer’s weather is a mix of hot and cold temperatures, and the rain we need so desperately is coming now in sprinkles along with thunder and lightning. Along with changes in the...more

FTB Releases Plans for May Department Stores Interest Computation Adjustments

by Morrison & Foerster LLP on

The California Franchise Tax Board (FTB) has announced plans to make adjustments to interest rate calculations in certain circumstances involving May Department Stores v. United States to approximately 27,000 taxpayer...more

California’s Harley-Davidson Decision Rides over Nexus Lines

by McDermott Will & Emery on

On May 28 2015, The California Court of Appeals issued a decision in Harley-Davidson, Inc. v. Franchise Tax Board, 187 Cal.Rptr.3d 672; and it was ultimately about much more than the validity of an election within...more

Good News for Taxpayers: California 1031 Exchange Decision

by Allen Matkins on

The California State Board of Equalization (Board) recently issued a favorable decision in an important Section 1031 exchange case. As an elected body of five members, the Board hears appeals in California tax cases where the...more

California Franchise Tax Board Turns Over Tax Forms to Tax Analysts; Pays Attorney Fees

by Reed Smith on

Last month, Reed Smith, acting for its client, Tax Analysts, struck a blow for transparent tax administration, by convincing the California Franchise Tax Board (the “FTB”) to disclose certain forms used by FTB auditors. In...more

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