California State Controller Sets Date to Stop Issuing IOU’s

State Controller John Chiang has announced that after his stress test of the Department of Finance’s cash projections, the state should be able to stop issuing IOU’s on September 4, 2009.

A complete copy of the State’s press allowance can be found here.

Filed under: California

California –Corporate, Personal Income Taxes: Tax Relief Available to Santa Cruz County Wildfire Victims

The California Franchise Tax Board (FTB) has announced special corporation franchise and income and personal income tax relief available to California taxpayers affected by the recent wildfires in Santa Cruz County. Taxpayers that have lost homes or suffered property damages as a result of the fires can quickly get some financial relief by immediately claiming their disaster losses on their tax returns.

The Franchise Tax Board has instructed that taxpayers claiming the disaster losses should write "California Wildfires 2009" in red ink at the top of their tax returns to alert the FTB to expedite tax refunds. Original and amended return forms for the 2008 tax year are available on the FTB’s Web site at http://www.ftb.ca.gov.

Taxpayers needing copies of lost or damaged state returns should complete Form FTB 3516, Request for Copy of Tax Return, and print "California Wildfires 2009" in red ink at the top of the request. Disaster victims can receive copies of their tax returns for free.

Filed under: California, Tax

California LLC Fee Constitutionality Update

Via Spidell

The US Supreme Court declined to review the Ventas case pertaining to LLC fees paid by LLC’s with income from both California and non-California sources.

According to the FTB, they will issue a notice sometime in the next few weeks with instructions on when and how to obtain refunds for LLCs that have income inside and outside the state of California and have filed protective claims for refunds.

LLC’s that had income outside of California in a year prior to 2007 should file a protective for refund as the statute of limitations of four years expires in 2009.

Filed under: California, Tax, Tax Season

California Apparently Postpones Penalties for Failure to Comply with the New E-Pay Requirements

Via Spidell

Spidell has reported that the California Franchise Tax Board will NOT assess penalties if a taxpayer subject to the new mandatory e-pay requirements pays by check instead of electronically during 2009.

The law currently states that all payments made by an individual on or after January 1, 2009, regardless of taxable year or amount, must be remitted electronically to the FTB after the individual has:

• Made a single estimated tax or extension payment greater than $20,000 for a taxable year beginning on or after January 1, 2009; or
• Filed an original return with a tax liability greater than $80,000 for a taxable year beginning on or after January 1, 2009

Filed under: California, Tax

No More California Tax Refund Delays!

The California Controller announced that it will begin releasing the delayed refunds, including $1.96 billing in personal income tax refunds and $181 million in bank and corporate tax refunds.  The controller will make all refund payments on a “first in, first out” basis and anticipates all of the refunds will be made within the next several weeks.

Filed under: California, Tax

California Real Estate Withholding Laws Change

Via the California Franchise Tax Board 

Assembly Bill 3078 amended California Revenue and Taxation Code sections 18662 and 18668 withholding laws effective January 1, 2009. Changes are as follows:

Withholding Rates –Non-California partnerships are now subject to withholding requirements on the sale of California real property at a rate of 3 1/3% of sales proceeds or 9.3% of gain. The alternative withholding rates for the sale of California real property increased to 10.8 percent for S corporations and 12.8 percent for financial S corporations.

Installment Sales – Buyers are required to withhold on the principal portion of each installment payment if the sale of California real property is structured as an installment sale.

In addition, withholding amounts can be collected from the withholding agent if the withholding agent fails to withhold or fails to remit to us the withheld amounts. The new statute provides a clearer method for assessment and collection of unremitted withholding.

Forms – Changes have been made to the following withholding forms:  Form 593-I, Real Estate Withholding Installment Sale Acknowledgement; Form 593-E, Real Estate Withholding – Computation of Estimated Gain or Loss; Form 593, Real Estate Withholding Tax Statement.

As a continued benefit to withholding agents and taxpayers, Form 593-E automatically computes the estimated gain or loss on the sale of California real property and the alternative withholding amount. The following maximum tax rates can be selected:

• Individuals 9.3 percent.
• Non-California partnerships 9/3 percent(new rate).
• Corporations 8.84 percent.
• Bank and financial corporations 10.84 percent.
• S corporations 10.8 percent (new rate).
• Financial S corporations 12.8 percent (new rate).

The form also computes the withholding amount based on 3 1/3 percent of the total sales price for comparison.

Filed under: California, Real Estate, Tax

California Refunds Continue to be Delayed

Despite the budget enacted last week, the California State Controller announced on Thursday, February 19, 2009, that refunds will continue to be delayed.  Following is a quote from the California Franchise Tax Board Website:

“The State Controller announced on Thursday, February 19, 2009, that once the budget plan provides the needed cash in the treasury, his office will work around the clock to get delayed payments out the door. Check this website for updated information on the status of the delayed tax refunds.”

Filed under: California, Tax

California Franchise Tax Board Developing Schedule M-3

Following in the footsteps of the IRS, the California Franchise Tax Board has announced that it too is developing a Schedule M-3.

 
 

According to the FTB: “We are developing a Schedule M-3 (Reconciliation of Net Income (Loss) per Books With Income per Return) and want your input. We are in the process of designing this form, and will be placing draft versions on our website for public review and comment. We will hold an Interested Parties Meeting in Sacramento on August 11. If you’re an interested party, sign up soon.”

Filed under: California, Tax