On September 13, 2024, California’s Franchise Tax Board (“FTB”) released updated proposed regulations (“Draft Regulations”), which would amend the rules regarding market-based sourcing for sales other than sales of tangible...more
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
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
California legislators released bill language addressing Governor Gavin Newsom’s “May Revise” to the state budget that includes the Governor’s so-called “apportionment fix.” If enacted, Assembly Bill 167 and Senate Bill 167...more
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
On May 14, California Governor Gavin Newsom released proposed trailer bill language for the so-called “apportionment fix” introduced in his “May Revise” to the state budget last week (see our prior Legal Alert here)....more
In a decision that may have significant repercussions regarding apportionment for California corporate tax purposes, the California Office of Tax Appeals (“OTA”) has denied the Franchise Tax Board’s (“FTB”) petition for a...more
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
The California Office of Tax Appeals (OTA) denied a request for rehearing of a July 2023 OTA opinion favorable to Microsoft Corp. that could have wide-ranging impacts for a water's edge filer in California, particularly one...more
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
On February 14, 2024, the California Office of Tax Appeals (OTA) denied the California Franchise Tax Board’s (FTB) request for rehearing in the Appeal of Microsoft Corporation and Subsidiaries (OTA Case No. 21037336)....more
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
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
In 1995, Panrox International (USA), Inc. recorded a deed of trust on a home in Los Angeles to secure an indebtedness of $141,000. On January 2, 2001, the State of California suspended Panrox for failure to pay taxes. ...more
In 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...more
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
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
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
The California Legislature has sent two landmark bills to Gov. Gavin Newsom for approval that will have global repercussions. Bundled with Senate Bill (SB) 252 as part of the Climate Accountability Package, SB 253 and SB 261...more
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
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
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
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
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
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