Cot meets FTB: annual liaison meeting covers timely issues.

• Author: English, Damien B.M.
• Position: CATax

Legislative updates, changes to the auditing department and communication methods were just some of the topics tackled at the Oct. 28 CalCPA Committee on Taxation/FTB annual liaison meeting. A transcript of the questions submitted by CalCPA members and respective answers from the FTB will be available in late January and posted to www.calcpa.org/tax.

The FTB is adjusting to budget cutbacks, said executive officer Selvi Stanislaus, which include a three-day per month furlough program. At the same time, Stanislaus said, the FTB is being asked by more California agencies to assist in collection efforts.

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With fewer resources, however, Stanislaus said taxpayers and practitioners will experience processing and service delays.

Legislative Update

Brian Putler, director of the Legislative Services Bureau, mentioned that the most notable piece of legislation that did not pass was AB 1580, the conformity legislation.

This bill would have changed California's specified date of conformity to federal income tax law from Jan. 1, 2005, to Jan. 1, 2009. Further, this would have extended the California provision for exclusion of cancellation of mortgage debt on a personal residence to 2009.

Other bills of note that passed:

ABX3 3: Addresses the fiscal emergency declared by Gov. Schwarzenegger by:

* Increasing personal income tax rate by .25 percent for tax years 2009 and 2010;

* Increasing the alternative minimum tax rate: and

* Decreasing the dependent exemption credit from $309 to S99.

ABX3 15:

* Provides a $3,000 credit against tax for each increase in qualified, full-time employees hired by a qualified employer, limited to a cumulative total of allowable credit of $400 million; and

* Allows specific entities to elect to use a sales-only formula to apportion income starting Jan. 1, 2011.

ABX4 17:

* Increases the withholding rate on wages by 10 percent for wages paid on or after Nov. 1, 2009. This provision also increases the fixed rate of tax withheld from supplemental wages from 6 percent to 6.6 percent, and increases the fixed rate withheld from stock options and bonus payments from 9.3 percent to 10.23 percent for amounts paid on or after Nov. 1,2009; and

* Modifies the estimated tax payment schedule from 25 percent per quarter to 30 percent, 30 percent, 20 percent and 20 percent until Jan. 1, 2010; and then to 30 percent, 40 percent, 0, and 30 percent for taxable years beginning on or after Jan. 1,2010.

ABX4 18:

* Requires the...