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Tax Law

California Franchise Tax Board Announces 20-Day Comment Period for Alternative Apportionment Regulation Amendments

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 request permission to proceed with the formal Administrative Procedures Act (APA) regulatory process.  This regulation project has been ongoing since 2017 and FTB has held a total of four interested parties meetings on the proposed amendments.

After the Interested Parties Meeting held on August 11, 2020, the FTB proposed the following amendments:

  • The first revision takes previously deleted language “Consideration of said petitions by the Board shall be in open session at a regularly-scheduled meeting” and retains it in section 25137(d).
  • The second revision adds language to section 25137(d)(2)(D) to specify that a taxpayer will receive notification of the petition and the briefing schedule either sixty (60) calendar days from the date of the petition, or sixty (60) calendar days from the date of FTB staff’s determination if a determination was not previously made, whichever occurs later.
  • The third revision modifies the time allowed for opening and reply presentations specified in section 25137(d)(3)(A) from thirty (30) minutes for opening presentations and fifteen (15) minutes for taxpayer’s reply presentation to twenty (20) minutes for opening presentations and ten (10) minutes for taxpayer’s reply.
  • The fourth revision replaces “of” with “at” in section 25137(d)(3)(C) to state: “The Franchise Tax Board, itself, shall render its decision on the taxpayer’s petition during an open session at a regularly-scheduled meeting.”

FTB will accept written comments until 5 p.m. on January 18, 2021, by mail and email.

For a more detailed look at the 25137 regulation project, please see our previous post: The Long Road to Clarity: FTB Holds Latest Meeting in Multiyear Project to Clarify Alternative Apportionment Petition Process.