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New Laws Archives

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.

Legislators Seek to Limit Impact of Wayfair Decision through New House Bill

On September 13, 2018, a bill was introduced in the U.S. House of Representatives "to prohibit States from retroactively imposing a sales tax collection duty on a remote seller," among other purposes. H.R. 6824, also called the Online Sales Simplicity and Small Business Relief Act of 2018, seeks to limit the impact of the recent Wayfair decision, which eliminated the need for a business to be physically present in a state in order to have economic nexus in that state.

Californians to Vote on Two Tax-Related Ballot Measures in June 2018

Californians will be able to vote on two new legislative measures related to taxes on the June 5, 2018 Statewide Direct Primary Election ballot.

Out-of-State Trusts Can Now Participate in California Voluntary Disclosure Program

On September 25, 2017, Governor Brown signed S.B. 813 into law, which, effective January 1, 2018, expands the existing California state voluntary disclosure program to include out-of-state trusts with California beneficiaries and non-resident partners. Such taxpayers will now be eligible to use the voluntary disclosure program to bring non-California trusts into compliance with California state tax laws. In addition, the Franchise Tax Board (FTB) may waive late-filing penalties for certain types of entities and returns under the program.

Gov. Brown Signs Historic State Bar Fee Bill Into Law

On October 2, 2017, California Governor Jerry Brown signed SB 36, the fee bill for the State Bar of California, into law. This year's annual attorney licensing fee bill includes major reforms for the agency, including the separation of voluntary sections into a new, private non-profit entity. The Board of Trustees will transition to being composed entirely of trustees appointed by the California Supreme Court, Legislature, and Governor. Attorneys will no longer elect any of the trustees. The Supreme Court will appoint the Board's Chair and Vice Chair.

Update Regarding the New Office of Tax Appeals

As we inch closer to the January 1, 2018 official changeover of many responsibilities from the Board of Equalization to California's two new tax agencies (the Department of Tax and Fee Administration [TFA], and the Office of Tax Appeals [OTA]), legislators are refining and narrowing the details of future responsibilities and processes for taxpayers to avail themselves of these administrative bodies.

New Loophole May Lead to Local Tax Hikes in California

The California Supreme Court issued a ruling on August 28, 2017 in California Cannabis Coalition v. City of Upland that may have created a loophole for special interests to get around the limitations on tax increases established by Propositions 13 and 218. In the instant case, an initiative was proposed in Upland, California to repeal an ordinance banning medical marijuana dispensaries and instead allow up to three dispensaries to obtain permits, subject to an "annual Licensing and Inspection fee" totaling $75,000. Since this fee exceeds the costs incurred by the government for issuing the license, it is considered a general tax. Normally, such taxes can only be heard at general elections, but an exception was made and the initiative was voted on in a special election.

California Luxury Counties Targeted by the Treasury Department

The Financial Crimes Enforcement Network (FinCEN) announced on August 22, 2017 that it will be targeting shell companies purchasing luxury properties for $2 million or more in the California counties of San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara. Luxury property purchases in certain counties in Texas, Florida, New York, and Hawaii will also be under scrutiny per FinCEN's recent Geographic Targeting Order.

Federal Bill Introduced to Simplify State Income Taxes for Mobile Workers

The Mobile Workforce State Income Tax Simplification Act of 2017, which aims to make a person's wages and other remuneration subject to income tax only in the employee's state of residence and the state where the employee was physically present and performed employment duties for more than 30 calendar days, was passed by the U.S. House of Representatives on June 20, 2017. Employers will not have state income tax withholding or reporting requirements for employees who do not fit these criteria. Certain classes of workers will not be considered employees for the purposes of this bill, including professional athletes and entertainers; film and video production employees; and prominent public figures providing services on a per-event basis. The U.S. Senate Committee on Finance currently has the proposed bill under review.  Click here to track its progress.

Department of Labor Eases Federal Guidance on Use of Contract Labor

U.S. Secretary of Labor Alexander Acosta announced on June 7, 2017 that the Department will no longer follow the informal guidance issued as Administrator Interpretation Letters in 2015 and 2016 regarding joint employment and independent contractors [here], signaling an easing of the federal guidance on the use of contract labor. According to its press release, "The Department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act." To read the full press release, click here.

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