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Analysis

California FTB issues final report on California’s conformity to 2017 federal income tax changes

Multistate Tax alert | May 1, 2018

The California Franchise Tax Board (FTB) issued its fourth and final report, 'Summary of Federal Income Tax Changes 2017—Final report,' summarizing California’s conformity to P.L. 115-97, 'The 2017 Tax Reform Act' (the Act).

FTB—Reports issued

The California Franchise Tax Board (FTB) issued its fourth and final report, Summary of federal income tax changes 2017—Final report, summarizing California’s conformity to P.L. 115-97, The 2017 Tax Reform Act (the Act). Over the last few months, the FTB has issued four reports listed below:

FTB report no.
FTB title for the report
First report Preliminary report on specific provisions of the act; and (Revised) preliminary report on specific provisions of the act
Second report Preliminary summary of federal income tax changes 2017–First release
Third report Preliminary summary of federal income tax changes 2017–Second release
Final report Summary of Federal Income Tax Changes 2017–Final report
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Final report overview

In the Final report, the FTB generally consolidated the elements addressed in the First report, second report, and third report (see Deloitte’s prior tax alert for details regarding the FTB’s initial three reports) and also addressed California’s conformity to various provisions of the act not covered in the prior three reports. Some of the additional provisions addressed include:

  • Individual tax provisions related to tax rates and various other deductions and limitations
  • Deductions for qualified business income from pass-thru entities, various other deductions, and exclusions
  • Various international tax provisions related to Subpart F of the Internal Revenue Code (IRC).

As has been noted previously, California conforms only to certain provisions of the IRC. Where California conforms to the IRC, California’s current IRC conformity date is January 1, 2015, for both individual and corporate tax.

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Contacts

If you have any questions regarding any of the FTB’s reports or other California tax matters, please contact one of the following Deloitte Tax professionals:

Valerie C. Dickerson, partner, Deloitte Tax LLP, Washington, DC, +1 202 220 2693

Christopher Campbell, principal, Deloitte Tax LLP, Los Angeles, CA, +1 213 553 3072

Steve West, managing director, Deloitte Tax LLP, Los Angeles, CA, +1 213 688 5339

Shirley J. Wei, senior manager, Deloitte Tax LLP, Los Angeles, CA, +1 213 553 1715

Brian Toman, Tax specialist leader, Deloitte Tax LLP, San Francisco, +1 415 783 6137

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The Multistate Tax alert archive includes external tax alerts issued by Deloitte Tax LLP's Multistate Tax practice during the last three years. These external alerts highlight selected developments involving state tax legislative, judicial, and administrative matters. The alerts provide a brief summary of specific multistate developments relevant to taxpayers, tax professionals, and other interested persons.

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