Posts tagged "California Franchise Tax Board"

Better Pay Online! Paper Payments to FTB Significantly Delayed in June

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!

California Business Tax Question Put To U.S. Supreme Court

Arizona Attorney General Mark Brnovich recently asked the U.S. Supreme Court for permission to file suit against the State of California over the $800 minimum business tax imposed on investors in certain LLCs. Brnovich contends that the California minimum tax, and California's related collection efforts when investors or businesses do not pay, is illegal because the investors have "purely passive investments in California companies." In addition, since the $800 minimum tax is deductible on Arizona tax returns, the California practice is costing Arizona more than $484,000 annually.

FTB Releases 2018 Filing Season Update

The California Franchise Tax Board (FTB) recently released an update about the 2018 tax filing season. As of May 31, 2018, the FTB had processed over 17 million personal income tax (PIT) and business entity (BE) returns. Ninety-one percent of personal returns and 85 percent of business returns were e-filed. The FTB issued 10.9 million personal refunds totaling $10 billion and 76,000 business refunds totaling $363 million, averaging $917 and $4,776, respectively. Over 1.3 million California Earned Income Tax Credits were claimed, and $292 million in credits/refunds were allowed.

Californians Can e-File Amended Returns Starting in 2018

According to the October 2017 newsletter of the California Franchise Tax Board, beginning in January 2018, California taxpayers will be able to e-file amended individual returns for tax year 2017 and later on a new Schedule X, California Explanation of Amended Return Changes. The Form 540X will be eliminated going forward, but you will still need to paper file Forms 540X to amend returns for prior tax years.

FTB Rules on Market-Based Sourcing of Non-Marketing Services

The California Franchise Tax Board (FTB) issued Chief Counsel Ruling 2017-01 on August 2, 2017, regarding market-based sourcing rules for performance of "non-marketing" services. Where a subcontractor performed administrative or non-marketing business services for a health plan client, the members or sponsors of the health plan are not considered the direct customers of that subcontractor, but rather only the health plan entity.

FTB Releases Data on 2017 Filing Season

The California Franchise Tax Board (FTB) recently released an update on the current state tax filing season. The number of personal returns that were e-filed in 2017 increased by one percentage point as compared to 2016 (88% in 2017, and 87% in 2016). Some 133,400 people used CalFile to file returns this year, and 95% of CalFile users found that the program was easy to use and understand.

FTB Changes Cost Recovery Fees for Delinquent Returns and Tax Payments

The Franchise Tax Board has updated its cost recovery fees, which are assessed against individuals and business entities when they fail to file tax returns upon demand or fail to pay their delinquent taxes. The filing enforcement fee for individuals and most entities will be $84, and the collection fee will be $287. For corporations and LLC's treated as corporations, the filing enforcement fee will be $85 and the collection fee $374.

A New Solution to an Old California Business Problem

We experienced an original success this month, trying a new approach to a very old problem. Businesses that register with the California Office of the Secretary of State (SOS) must, among other things, file annual income tax returns with the California Franchise Tax Board (FTB) and pay either the appropriate amount of income tax due based on the business' California net income, or pay a minimum $800 franchise tax, whichever is larger. Frequently, a taxpayer may set up a business but ultimately abandon the idea before ever operating the business. Or, sometimes a business ceases to operate, but the requisite documents are not correctly filed with the SOS, leaving the FTB to believe the business is still active. Many years may pass before the would-be business owner realizes an annual $800 franchise fee has been assessed against the business, along with additional penalties and interest.

Moving your Business to California, or Keeping your Business in California - California Offers a Tax Credit

The Franchise Tax Board announced it will be accepting applications for the California Competes Tax Credit from March 6 through March 27, 2017. The credit is available to businesses that relocate to California or stay and expand within the state. During Fiscal Year 2016/2017, credits totaling $243.3 million will be available for allocation during three application periods.

FTB Tax Return Due Dates

The California Franchise Tax Board (FTB) issued a reminder regarding tax return due dates, which have changed for taxable years starting January 1, 2016 going forward. For calendar-year filers, tax returns are due on:

Contact the Law Office of Williams & Associates

For more information about our tax law services, or to discuss your tax matter, call our Sacramento office at (916) 488-8501 or toll free at (800) 684-7147. You may also send us an inquiry via email.

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