The California Franchise Tax Board (FTB) recently issued a news blast that many payments sent by mail to the state tax agency in June were delayed significantly due to post office issues. When the mail finally caught up on June 9th, the FTB received some 115,000 payments for estimated taxes and other purposes. The agency is working to process all the backlogged payments now and will post them with a timely date of June 15, 2019. However, this should serve as a reminder to try to issue online payments to tax agencies whenever possible!
Better Pay Online! Paper Payments to FTB Significantly Delayed in June
California Offers Relief for Qualifying Out-of-State Retailers Selling Through Fulfillment Centers
The California Department of Tax and Fee Administration (CDTFA) recently announced it is offering relief to certain out-of-state retailers (referred to as "marketplace sellers") who are considered to be engaged in business in the state of California based solely on their use of in-state fulfillment centers to store inventory. Qualifying retailers may be entitled to reduced tax liabilities, penalties, and interest, effective June 27, 2019.
U.S. Supreme Court Decides in Favor of Out-of-State Trusts in Tax Case
The U.S. Supreme Court recently issued a unanimous decision in North Carolina Dept. of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust, ruling that residence in a state is not a sufficient reason to tax an out-of-state trust's undistributed income. Justice Sonia Sotomayer delivered the opinion, explaining the Court's two-step analysis of the case in regards to the 14th Amendment on due process. The judges considered that there must be "some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax" and that the "income attributed to the State for tax purposes must be rationally related to 'values connected with the taxing State.'" In this instance, "the presence of in-state beneficiaries alone does not empower a State to tax trust income that has not been distributed to the beneficiaries where the beneficiaries have no right to demand that income and are uncertain ever to receive it."
FTB Update on 2019 Tax Filing Season
The California Franchise Tax Board (FTB) recently released some initial data on the 2019 tax filing season. As of June 1st, the FTB had processed 17.4 million personal income tax returns, a vast majority (88%) of which were e-filed. A total of $11.7 billion in personal income tax refunds were issued to 12 million individual taxpayers, 98% of whom received their refunds within 30 days of filing. The FTB also received 1.1 million business entity returns and issued 92,000 refunds to business taxpayers, totaling $553 million. To read the full update, click here.
Trump Signs Taxpayer First Act
The Taxpayer First Act signed into law by President Trump requires the IRS to make important changes that will benefit taxpayers and improve tax administration.
