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Sacramento Tax Law Blog

California's New 2019 Rules for Sales & Use Tax for Out-of-State Businesses

The California Department of Tax and Fee Administration (CDTFA) announced this week that, starting April 1, 2019, out-of-state retailers whose sales for delivery into California exceed $100,000 or 200 deliveries will be required to register with California and collect and pay over sales tax. Businesses that meet these thresholds for a single local jurisdiction will also need to collect and pay over that district's use tax, in addition to the state tax.

California Fund Manager Sentenced to Prison for Fraud and False Tax Return

A 74-year-old former fund manager who resided in San Francisco was recently sentenced to 30 months in prison for investment adviser fraud and filing a false income tax return that failed to report millions of dollars in illegally diverted funds. The California resident moved funds between several entities related to Burrill Capital, LLC, using advance management fees he was not permitted to draw. His accountant was convicted of assisting with the filing of the false income tax return and will be sentenced soon.

TIGTA Releases Semi-Annual Report to Congress

The Treasury Inspector General for Tax Administration (TIGTA) recently released its semi-annual report to Congress on federal tax administration for the period from April 1 through September 30, 2018. A major highlight during this period was TIGTA's success protecting taxpayers from IRS impersonation scams: As of the end of the reporting period, 130 individuals have been charged for their roles in a massive phone scam involving multiple India-based call centers. Twenty-one of those individuals have been sentenced to prison sentences of up to 20 years each, and all are jointly and severally liable for over $8.9 million in restitution.

California Assembly Members File Competing Bills Following California Supreme Court Dynamex Decision

I often think of the worker classification case I was involved with as a new attorney at the Employment Development Department. One of my witnesses, an independent contractor truck driver, testified that he netted over $30,000 more per year than I was grossing as a state attorney. I realized at that moment that I was involved in restricting this gentleman from engaging in a lawful business which worked very well for him. The California legislature may soon be faced with a similar burden.

California Updates 2018 Tax Rates and Exemptions

The California Franchise Tax Board (FTB) recently updated its list of individual and corporate tax rates, exemption credits, and other fees and requirements for 2018, based upon the state rate of inflation. The current California tax rate for corporations (not banks or financials) is 8.84%, and the maximum rate for individuals is 12.3%. For additional details, click here.

Ohio Becomes First State to Accept Bitcoin for Tax Payments

The Treasurer of Ohio announced this week that taxpayers in his state will be able to pay business taxes with cryptocurrency - making Ohio the first state in the U.S. to do so.

California Post-Wayfair Update: Change is On the Horizon

The California Legislative Analyst's Office (LAO) released a fiscal outlook report recently that indicates California will soon be implementing changes to sales and use tax collection for out-of-state businesses in the wake of the June 2018 Wayfair decision. "The administration plans to start registering out-of-state taxpayers soon," the LAO wrote, and anticipates increases to state revenue from related changes starting around $100 million or more in the next couple years. To read the full report, click here.

IRS Tax Inflation Adjustments for 2019

The Internal Revenue Service (IRS) recently announced the annual inflation adjustments for tax rate schedules and other tax provisions for 2019.  Due to the Tax Cuts and Jobs Act, there are important changes to review concerning the standard deduction, rate tiers, minimum essential health coverage penalty, and other items.  For the detailed announcement, click here.

Californian Gets Prison Time for Failing to Report Over $1 Million in Marijuana Sales

A California real estate professional was recently sentenced to 2 years in prison for filing false income tax returns that failed to report over $1 million in cash earned through marijuana sales made between 2012 and 2014. In addition, he was ordered to serve one year of supervised release and pay $466,707 in restitution to the IRS.

Good News for Taxpayers with Defunct California Entities!

California taxpayers who ceased doing business but continue to get requests for unpaid taxes or unfiled returns from the Franchise Tax Board (FTB) may benefit from a new bill, AB 2503, which goes into effect January 1, 2019, and provides two options for an administrative dissolution of qualified domestic corporations and LLCs. The FTB will be able to administratively dissolve a business that has been suspended for 5 years or longer, or has ceased doing business, and meets other qualifications. Otherwise, taxpayers may request that the FTB abate unpaid, qualified taxes, interest, and penalties for years for which the entity certifies under penalty of perjury that it did not do business and has no remaining assets.

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