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On December 21, 2020, a three-judge panel of California’s Office of Tax Appeals (“OTA”) ruled in a non-precedential opinion that an ophthalmologist successfully abandoned his California domicile and became a California nonresident from May 25, 2013 through December 31, 2013 after moving to Saudi Arabia. For a brief overview of the various legal concepts involved…

On January 27, 2021, a California Court of Appeal in the state’s First Appellate District affirmed a San Francisco trial court decision which held the California Constitution’s requirement that local taxes be approved by a supermajority vote does not apply to taxes imposed by voter initiative. This is the second decision out of the First…

On December 29, 2020, California’s Franchise Tax Board (FTB) staff announced a twenty-day comment period for four changes to the proposed draft language of its 25137 Regulation (Alternative Apportionment). After the twenty-day comment period expires, FTB staff intends to present the newly revised proposed draft Regulation language to the three member Franchise Tax Board to…

Last week, California voters passed Proposition 22 – which considers app-based drivers for rideshare and delivery companies to be independent contractors – and San Francisco voters passed Proposition L – which imposes an additional tax on businesses where compensation for executives significantly exceeds the median compensation of San Francisco employees. These ballot measures could have…

In a pending precedential decision, the California Office of Tax Appeals (OTA) held that the California Department of Tax and Fee Administration (CDTFA) is bound to follow its own regulation and could not rely on its audit manual to disregard that regulatory authority.  Regulation 1595 provides that the agency will use “book value” as the…

On September 29, 2020, Democratic Governor Gavin Newsom vetoed S.B. 972, the controversial taxpayer disclosure bill that would have required the California Franchise Tax Board (FTB) to provide the Legislature annually with the names, tax liabilities, and tax credits claimed by corporate taxpayers that meet a $5 billion gross receipts threshold.

S.B. 972 proposed…

On July 7, 2020, the California Office of Tax Appeals (OTA) held that a foreign LLC was subject to the state’s $800 LLC tax because it held a 0.7830849% ownership interest in an LLC that owned property in San Diego. In addition to a more traditional nexus test based on an entity’s business activities in…

On September 9, 2020, the California Supreme Court denied review of the opinion of the First District Court of Appeal in City and County of San Francisco v. All Persons Interested in the Matter of Proposition C, which held a voter-initiated local special tax may pass with only a simple majority.  With appeals currently…