News & Analysis as of

Franchise Tax Board Income Taxes

Proskauer - Tax Talks

California Franchise Tax Board (FTB) to Apply Market-Based Sourcing Rules to Nonresident Directors of California Based...

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On Monday, September 9, 2024, the California FTB approved proposed amendments to California’s personal income tax code. This proposed rule would impose California income tax on non-resident/non-employee corporate...more

McDermott Will & Emery

California Legislatively Overturns Recent Office of Tax Appeals Taxpayer Win

The California State Legislature overturned Microsoft’s recent win at the Office of Tax Appeals, which held that the gross amount of dividends received from foreign affiliates outside its water’s-edge group should be included...more

Pillsbury - SeeSalt Blog

California’s 2024-2025 Budget Seeks to Block $1.3 Billion of Refunds for Water’s Edge Taxpayers, Suspend NOL Deductions, and Limit...

The May Revision of California’s 2024-2025 state budget seeks to block refund claims, worth approximately $1.3 billion for historical tax years, and $200 million per year going forward, by codifying informal guidance recently...more

Pillsbury - SeeSalt Blog

Winter Storm Relief – California’s 2024 Extended Deadlines to File and Pay Taxes

The California Franchise Tax Board (FTB), California Department of Tax and Fee Administration (CDTFA) and California Employment Development Department (EDD) announced tax relief for certain California counties affected by...more

McDermott Will & Emery

Microsoft Scores Massive Win in California, Opens the Door for Others Nationwide

McDermott Will & Emery on

The Office of Tax Appeals (OTA) handed Microsoft an enormous win in its controversy with the California Franchise Tax Board (FTB) over the inclusion of qualifying dividends in the sales factor denominator for which it also...more

Allen Barron, Inc.

What Does the Recent OTA Ruling Tell You About a California Tax Audit?

Allen Barron, Inc. on

What does the recent OTA ruling tell you about a California tax audit? What can we learn from the results of an investigation by the Office of Tax Appeals (OTA) into the practices of a California tax agency? Why do you need...more

Pillsbury - SeeSalt Blog

California Trial Court Grants Industry Trade Association’s Motion for Summary Adjudication, Declaring Technical Advice Memorandum...

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A California trial court granted summary adjudication in the American Catalog Mailers Association’s (ACMA) action against the Franchise Tax Board (FTB), invalidating FTB guidance that says certain online activities exceed the...more

Allen Barron, Inc.

What Are the Statute of Limitations on an IRS and California Tax Audit?

Allen Barron, Inc. on

What are the statute of limitations on an IRS audit and a California tax audit? There is a time limit, known as the “statute of limitations“, when the IRS and/or California must complete an audit of your tax returns. It is...more

Venable LLP

Nonresident Owners Selling a Business with California Contacts? Be Wary of Selling Through a Conduit Holding Entity

Venable LLP on

Clients frequently come to us while in the process of selling interests in California-based businesses. Clients who are not residents of California typically expect that they will not be subject to California income tax on...more

Nossaman LLP

UPDATE | Extended Again: Federal and California Tax Relief for California Storms

Nossaman LLP on

As practitioners predicted, the California Franchise Tax Board has adopted the federal November 16, 2023 extensions for similar state returns and payments. To those CPAs and taxpayers who pulled all-nighters to get returns...more

Pillsbury - SeeSalt Blog

California Trial Court Rejects Industry Trade Association’s Motion for Summary Judgment Seeking to Declare Technical Advice...

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...more

Snell & Wilmer

New California Law Attacks NINGs and DINGs

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On July 10, 2023, California Governor Gavin Newsom signed into law S.B. 131, which included a provision targeting the California state income tax treatment of incomplete gift non-grantor trusts ("INGs"). Under the prior law,...more

McDermott Will & Emery

Buehler Doesn’t Get a Day Off from Double Taxation

McDermott Will & Emery on

The California Office of Tax Appeals (OTA) recently held that a California resident’s income tax paid to Massachusetts from the sale of his membership interest in a limited liability company (LLC) doing business in...more

Pillsbury - SeeSalt Blog

UPDATE: California Adds New Counties, Further Extends Deadlines to File and Pay Taxes for Businesses and Individuals Affected by...

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...more

Nossaman LLP

Federal and California Tax Agencies Announce Relief Measures for Storm-Impacted Taxpayers (UPDATED)

Nossaman LLP on

March Update - As another deluge of storms ravages California and the Southeast, the Internal Revenue Service (IRS) on February 24, 2023 announced a further extension of the May 15 tax deadline to October 16, 2023 for...more

Venable LLP

Incomplete Gift Non-Grantor Trusts Created by California Residents May Be Subject to California State Income Tax Beginning in 2023

Venable LLP on

Under California Governor Gavin Newsom's proposed 2023-2024 state budget, released on January 10, 2023, the income of an incomplete gift non-grantor trust (ING Trust) may now be subject to California income tax, effective on...more

Pillsbury - SeeSalt Blog

The California Franchise Tax Board Fails to Follow the Order of Its Market-Based Sourcing Cascading Rules

Pillsbury - SeeSalt Blog on

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...more

Pillsbury - SeeSalt Blog

California Court Holds Nonresidents’ Pass-through Income from Intangibles Is Taxable if It Is Classified as Business Income at the...

The California Court of Appeal held a nonresident S corporation shareholder’s pro rata share of gain on the sale of goodwill classified as business income by the S corporation has a California source and is subject to tax for...more

Venable LLP

Seller Beware - Court Rules That California Can Tax Gain from the Sale of Goodwill

Venable LLP on

A California state appellate court recently upheld the trial court's decision in The 2009 Metropoulos Family Trust v. Franchise Tax Board that nonresident shareholders of an S corporation source gain on the S corporation's...more

Greenberg Glusker LLP

California Provides Path to Deduct State Income Tax for Calculating Federal Tax [UPDATED]

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In IRS Notice 2020-75, the IRS invited the states to circumvent the $10,000 limit on the deduction of state taxes by individuals, trusts, and estates for purposes of calculating federal income tax by permitting the states to...more

Morrison & Foerster LLP - Left Coast Appeals

This Week at the Ninth: Telescopes and Tax Returns

This week, the Ninth Circuit takes a close look at a sizable antitrust jury award, and explains what constitutes a tax “return” for purposes of bankruptcy law. OPTRONIC TECHNOLOGIES, INC v. NINGBO SUNNY ELECTRONIC CO....more

Greenberg Glusker LLP

California Provides Path to Deduct State Income Tax for Calculating Federal Tax

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In IRS Notice 2020-75, the IRS invited the states to circumvent the $10,000 limit on the deduction of state taxes by individuals, trusts, and estates for purposes of calculating federal income tax by permitting the states to...more

Greenberg Glusker LLP

IRS and California Franchise Tax Board Extend Deadlines for Individual Taxpayers to May 17, 2021 – What You Need to Know

Greenberg Glusker LLP on

During the week of March 15, both the Internal Revenue Service and the California Franchise Tax Board extended the deadlines for individual taxpayers to file their 2020 income tax returns and pay their 2020 taxes from April...more

Gray Reed

Leaving California for Texas May Cause State Income Tax Headaches

Gray Reed on

Shortly after I moved to Texas from Washington, D.C., a federal judge called me about a potential conflict with a party in a lawsuit I just filed. Once the conflict was resolved, and recognizing I didn’t have a Texas accent,...more

BakerHostetler

The Neverending Story: California FTB Regulation Projects

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Since 2017, the California Franchise Tax Board has been working on revisions to its regulations for market-based sourcing regulation for income from services and intangibles and for petitioning for alternative apportionment....more

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