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Analysis

California FTB issues notice on US Supreme Court’s denied review of multistate tax compact election case

Multistate Tax alert | November 21, 2016

This Multistate Tax alert summarizes the FTB guidance set forth in the notice.

Overview

On November 1, 2016, the California Franchise Tax Board (FTB) issued Notice 2016-03 (Notice) (available here), providing guidance on how it will process cases before the FTB and the California State Board of Equalization (SBE) following the US Supreme Court’s recent decision to deny review of the California Supreme Court’s 2015 ruling [see October 14, 2016, Multistate Tax alert for more details on this denied review].

The California Supreme Court’s 2015 decision unanimously reversed the California Court of Appeal’s 2012 decision and denied the taxpayers’ election to change their state corporation franchise tax apportionment formula to apply the provisions of the multistate tax compact contained in California Revenue & Taxation Code (CRTC) Section 38006.

The notice provides that, generally, in cases where taxpayers attempted to make an election based on the multistate tax compact under CRTC Section 38006, the FTB will process refund claims and audits in the normal course of business and will return FTB protests and SBE appeals to active status. Penalties will be imposed as appropriate on a case-by-case basis.

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Contacts

If you have questions regarding this Notice or California tax matters, please contact any of the following Deloitte Tax LLP professionals.
 

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

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

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

Kent Strader, managing director, Deloitte Tax LLP, San Francisco, CA, +1 415 783 4579

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

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Multistate Tax alert archive

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.

View the list of archived Multistate Tax alerts.

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