California FTB issues proposed language for new Regulation Section 23663-6
Multistate Tax alert | May 31, 2018
This tax alert summarizes the proposed language for new California Code of Regulations (CCR) Section 23663-6 issued by California Franchise Tax Board (FTB).
On May 15, 2018, the California FTB issued proposed language for new California Code of Regulations (CCR) Section 23663-6 that provides guidance for certain taxpayers who may wish to assign credits to affiliated members of the taxpayer’s combined reporting group. The FTB will hold its Second Interested Parties Meeting on June 12, 2018, to discuss the proposed language (see meeting notice and information).
Currently, under California Revenue and Tax Code Section 23663, credits may only be assigned to an eligible assignee which generally means an affiliated corporation that is a member of the same combined reporting group as the assignor in the taxable year that the credits were earned and the taxable year that the credits are assigned to the assignee.
However, as the FTB states in the meeting notice, it is “presently unclear as to which members of the assignor's combined reporting group are eligible for assignment of a credit” when a corporate reorganization or restructuring has occurred. The proposed language of new CCR Section 23663-6 seeks to clarify the eligibility rules for assignees that are impacted by corporate mergers, acquisitions, and reorganizations.
The FTB also states in the meeting notice that all written comments must be submitted by July 10, 2018.
If you have any questions regarding the FTB’s new CCR Section 23663-6 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
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.