I hope everyone had a great 4th of July, below are some of the latest Senate Bills from the FTB to cross my desk.

Senate Bills

• SB 516 (DeSaulnier/Torlakson) Establish Voluntary Contribution For California Fund For Youth – Amended 06/15/10
• SB 1056 (Denham, et al.) Employer Credit/Wages Paid To Each Qualified Veteran – Amended 05/24/10
• SB 1071 (DeSaulnier) Prescription Drug Credit/Persons 55 Or Older – Amended 06/16/10
• SB 1316 (Romero) Low Income Community Investment Credit/Non-recognized Gain Doesn’t Include Out-Of-State Property Exchanges – Amended 06/16/10
• SB 1324 (Negrete McLeod) State Agencies Authorized To Impose Additional Fees For Requests Of Public Records For Commercial Use – Introduced 02/19/10
• SB 1425 (Simitian, et al.) California Public Employees’ Retirement System – Retirees Who Have Not Reinstated May Not Perform Services For State Until Separated From Service For At Least 180 Days – Introduced 02/19/10 & Amended 04/05/10 & 05/04/10
• SBX6 19 (Florez) FTB Compile Specified Corporation Tax Expenditure Information & Include On The State Reporting Transparency In Government Internet Web Site – Revised Introduced 05/26/10

Below is what has been happening with the FTB over the past week:

Assembly Bills

• AB 1662 (Portantino, et al.) Disaster Loss Deduction/Excess Loss Carryover/August 2009 Los Angeles & Monterey County Wildfires & January 2010 Calaveras, Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Francisco, & Siskiyou County Winter Storms – Original Analysis Revised 01/19/10
• AB 1690 (Chesbro) Disaster Loss Deduction/Excess Loss Carryover/January 2010 Humboldt County Earthquake – Original Analysis Revised 01/27/10
• AB 1766 (Gaines) Disaster Loss Deductions/Excess Loss Carryover/August 2009 Placer County Wildfires – Original Analysis Revised 04/06/10 & 04/15/10;
• AB 1973 (Swanson) Jobs Tax Credit – Amended 05/28/10
• AB 1993 (Strickland) State Agency Written Reports Required To Be Submitted To The Legislature, Any State Legislative Or Executive Body Shall Include Signed Statement By The Head Of The Agency – Amended 05/11/10 & 05/20/10
• AB 2091 (Conway) Public Records/Exempts Public Agency Information Security Records From Disclosure – Introduced 02/18/10
• AB 2136 (Perez, et al.) Disaster Loss Deduction/Excess Loss Carryover/April 2010 Imperial County Earthquake – Amended 06/16/10
• AB 2666 (Skinner) Employer Tax Credits/Information Reporting/Failure To File Information Penalty/FTB Compile Information Received & Submit To State Chief Information Officer For Publication On The Reporting Transparency In Government Internet Web Site – Amended 05/28/10
• AB 2671 (Cook) Minimum Franchise Tax/Exempt Corporations And Limited Liability Companies Owned Solely By Deployed Member Of U.S. Armed Forces That Operate At A Loss Or Ceases Operation – Amended 06/16/10

Senate Bills

• SB 1426 (DeSaulnier, et al.) State Budget/Two-Year Spending Plan – Amended 05/26/10

Assembly Bills

• AB 1779 (Niello, et al.) Mortgage Forgiveness Debt Relief Modification and Extension – Amended 05/03/10
• AB 1899 (Eng/Lieu) State Agencies Post Specified Audits & Contracts To The Reporting Transparency In Government Internet Web Site – Amended 05/28/10
• AB 2017 (Hall, et al.) California YMCA Youth And Government Fund – Amended 05/28/10
• AB 2041 (Villiness/Smyth) Health Savings Account Deduction Conformity – Amended 05/11/10
• AB 2126 (Garrick, et al.) Minimum Franchise Tax/Small Businesses That First Commence Business On Or After January 1, 2011, Exempt First Taxable Year And $100 Succeeding 9 Taxable Years – Amended 05/18/10
• AB 2148 (Tran/Portantino) Deduction For Physician’s Medical Services Performed Free Of Charge To Local Community Clinic Or Emergency Department Of General Acute Care Hospital – Amended 05/18/10
• AB 2403 (Strickland) State Agencies Post Specified Audits & Contracts To The Reporting Transparency In Government Internet Web Site – Introduced 02/19/10 & Amended 04/26/10
• AB 2528 (Knight) Exclusion/Payments Or Vouchers From Federal Consumer Assistance To Recycle & Save Act Of 2009 (aka “Cash For Clunkers”) – Amended 05/05/10
• AB 2559 (Perez, John A.) State Agencies/Prohibits Requiring Social Security Numbers For Benefit, Service, Privilege, Or Participation In Any Program – Introduced 02/19/10
• AB 2589 (Tran) Dual Renewable Energy Device Credit – Amended 04/08/10
• AB 2605 (De La Torre) State Property Sales Or Long-Term Leases – Amended 06/01/10
• AB 2630 (Emmerson/Cook, et al.) Jobs Tax Credit – Amended 05/18/10

Senate Bills

• SB 1008 (Padilla) Limited Partnerships & Foreign Limited Partnerships/Engineers & Land Surveyors – Amended 03/15/10 & 04/28/10
• SB 1391 (Yee) Employer Tax Credit/Reporting Information/New Credits Chaptered After January 1, 2011, Would Be Recaptured If Taxpayer Has Net Decrease In Full-Time Employees – Amended 05/19/10
• SB 1426 (De Saulnier, et al.) State Budget/ Two-Year Spending Plan – Introduced 02/19/10
• SB 1463 (De Saulnier) Corporate Flexibility Act Of 2010/Flexible Purpose Corporation – Introduced 02/19/10 & Amended 04/05/10
• SBX6 19 (Florez) FTB Compile Specified Corporation Tax Expenditure Information & Include On The State Reporting Transparency In Government Internet Web Site – Introduced 05/26/10

Sacramento — The statewide median income for all personal income tax returns rose slightly to $35,923 (0.78 percent over 2007), while the median income listed on joint returns grew to $68,981 (0.27 percent over 2007) according to statistics released today by the Franchise Tax Board (FTB).

The four Bay Area counties of Contra Costa, Marin, San Mateo, and Santa Clara counties have led California for 37 years in reported highest median incomes.

“Median income” is the point where one-half of the tax returns are above and one-half are below the midpoint of the range of values. Median income represents the amount reported by a typical California individual or couple.

California taxpayers filed 15.53 million 2008 state income tax returns reporting $1.113 trillion, a 7.2 percent decrease over 2007 figures. Adjusted gross income is a figure taken from tax returns that reports total income after specific tax deductions are subtracted.

Marin County had the highest median income for joint returns at $118,704, a decrease of 3.85 percent over 2007.San Mateo County ranked second with $100,165,Santa Clara County ranked third with $100,077, Contra Costa County ranked fourth with $90,956, and Alameda County ranked fifth with $88,138.

Los Angeles County taxpayers filed 25.5 percent of all 2008 income tax returns in California. They reported median incomes of $31,679 for all returns, and $59,950 for joint returns, ranking 36th and 28th, respectively for all counties. The largest percentage gain in median income for all counties was 5.36 percent, reported in Colusa County. The largest increase in joint filings was also in Colusa County with a 4.55 percent increase.

Assembly Bills

• AB 1836 (Furutani) PIT Rates/Increase Maximum Rates To 10 Percent & 11 Percent & AMT To 8.5 Percent Beginning On Or After January 1, 2011, & Before January 1, 2016 – Amended 04/05/10
• AB 1990 (Anderson) Unemployed Worker’s Child Care Costs Contributions Credit – Amended 04/05/10
• AB 2041 (Villines/Smyth) Health Savings Account Deduction Conformity – Introduced 02/17/10 & Amended 03/10/10
• AB 2177 (Beall) Allow Electronic Communication To Taxpayers To Inform Of Tax Change Or Obligation – Amended 04/14/10
• AB 2492 (Ammiano) Property Taxes/Change In Ownership – Amended 04/08/10
• AB 2591 (Feuer/Perez) State Budget/Nonrecurring Revenue/FTB & BOE identify Each Source Of General Fund Proceeds Of Taxes Higher Than Tax Proceeds Received In Preceding Fiscal Year & Report To Legislature, Governor, Controller & Public By May 15 Each Year – Amended 03/17/10
• AB 2630 (Emmerson, Cook, et al.) Employer Hiring Credit – Introduced 02/19/10
• AB 2640 (Arambula) Section 1245 Property Credit For Manufacturer’s Investment In Qualified Property/Eliminate Income Exclusion Of Free Or Subsidized Parking For Participating In A California Ridesharing Arrangement – Amended 04/08/10
• AB 2641 (Arambula/Solorio) Tax Expenditures/Legislative Review Of Each Tax Expenditure/Add 5 Year Sunset – Amended 04/27/10
• AB 2656 (De Leon) Postsecondary Education/Contracts For Academic Research – Amended 04/08/10
• AB 2665 (Strickland) Service Station Emergency Standby Generator Credit – Amended 04/26/10

Senate Bills

• SB 913 (Calderon) Principal Residence Credit – Introduced 01/28/10
• SB 952 (Wyland) Repeal PIT Temporary Rate Increases/Repeal Decreased Personal Exemption Credit for Dependents/Withholding Tables/Eliminate 10 Percent Increase – Introduced 02/04/10
• SB 952 (Wyland) Repeal PIT Temporary Rate Increases/Repeal Decreased Personal Exemption Credit for Dependents – Amended 04/05/10
• SB 1073 (Ashburn) Research Expense Credit/20 Percent Of Qualified Green Technology & Renewable Energy Research And Development Costs – Introduced 02/17/10
• SB 1185 (Maldonado) Adopted Animal Food And Supply Costs Deduction – Introduced 02/18/10
• SB 1216 (Cedillo) Low-Income Housing Credit/Allocation Of Surplus Credits By The California Tax Credit Allocation Committee – Amended 04/05/10
• SB 1244 (Walters) Limited Liability Company Employment Taxes – Amended 04/21/10
• SB 1272 (Wolk) Tax Expenditures/Add 7 Year Sunset – Amended 04/21/10
• SB 1391 (Yee) Employer Tax Credit/Reporting Information/New Credits Chaptered After January 1, 2011, Would Be Recaptured If Taxpayer Has Net Decrease In Full-Time Employees – Amended 04/06/10
• SB 1430 (Walters) Renter Credit & Homeowners’ Property Tax Exemption/Increase Credit & Exemption Amounts For Taxpayers 62 Or Older – Introduced 02/19/10 & Amended 03/24/10

Senate Special Session Bills

• SBX6_14 (Calderon/Correa) Mortgage Forgiveness Debt Relief Extension – Introduced 03/11/10
• SBX8_58 (Dutton/Runner) Research Expense Credit/20 Percent Of Excess Qualified Expenses/Conformity To Election Of Alternative Incremental Credit – Introduced 02/12/10

Assembly Bills

• AB 183 (Caballero) Principal Residence Credit (Stats. 2010, Ch. 10-12)- Legislative Change 10-04
• AB 347 (Bass) Charitable Contribution Deduction Haiti Earthquake (Stats. 2010, Ch. 10-08) – Legislative Change 10-03
• AB 658 (Hayashi,et al.) Voluntary Contribution Fund Designation/California Police Activities League Fund – Introduced 03/04/10
• AB 1700 (Gaines) Personal Exemption Credit For Dependents/Repeal Decrease In Credit January 1, 2010/Pit Rates/Repeal Temporary Increase January 1, 2010 – Introduced 02/01/10 & Amended 03/23/10
• AB 1936 (De Leon) Remove Net Operating Loss Carryback Provisions – Introduced 02/17/10
• AB 1973 (Swanson) Employer Hiring Credit/Ex-Offender – Introduced 02/17/10
• AB 1973 (Swanson) Employer Hiring Credit/Ex-Offender/Reentry Employment Business Tax Credit Act – Amended 04/05/10
• AB 2017 (Hall) California YMCA Youth and Government Fund – Introduced 02/17/10
• AB 2078 (Calderon) Use Tax/Retailers Engaged In Business In This State – Amended 04/05/10
• AB 2100 (Coto) Sweetened Beverage Tax Law – Introduced 02/18/10 & Amended 03/25/10
• AB 2126 (Garrick) Minimum Franchise Tax/Corporations That First Commence Business On Or After January 1, 2009, Exempt First Taxable Year And $100 Succeeding 9 Taxable Years – Introduced 02/18/10
• AB 2126 (Garrick, et al.) Minimum Franchise Tax/Corporations That First Commence Business On Or After January 1, 2009, Exempt First Taxable Year And $100 Succeeding 9 Taxable Years – Amended 04/05/10
• AB 2148 (Tran) Deduction For Physician’s Medical Services Contributed Free Of Charge To Local Community Clinic – Introduced 02/18/10
• AB 2458 (Saldana) Corporation Penalties – Introduced 02/19/10
• AB 2528 (Knight) Exclusion/Payments Or Vouchers From Federal Consumer Assistance To Recycle & Save Act Of 2009 (aka “Cash For Clunkers”) – Introduced 02/19/10
• AB 2564 (Swanson) State Budget/Tax Expenditures – Introduced 02/19/10 & Amended 03/25/10
• AB 2665 (Strickland) Service Station Emergency Standby Generator Credit – Introduced 02/19/10
• AB 2671 (Cook) Minimum Franchise Tax/Exempt Corporations Owned Solely By Deployed Member Of U.S. Armed Forces That Operate At A Loss Or Ceases Operation – Introduced 02/19/10
• AB 2676 (Ma) FTB Revise Income Tax Forms And Instructions To Continue To Enable A Person To Report & Pay Qualified Use Tax – Amended 04/06/10

Senate Bills

• SB 936 (Strickland) Income Exclusion for Energy Property Grants – Amended 03/08/10
• SB 1020 (Wolk, DeSaulnier, et al.) State Budget/Performance-Based Budget – Introduced 02/11/10
• SB 1036 (Cedillo/Huffman) FTB Disclosure Of Tax Return Information To Cities/Expands To Allow Disclosure By City Officials To Other Persons Designated By City Resolution – Introduced 02/12/10
• SB 1244 (Walters) LLC Employment Taxes and Contribution – Introduced 02/19/10 & Amended 04/05/10

Senate Special Session Bills

• SBX8 25 (Calderon/Correa) Mortgage Forgiveness Debt Relief Extension – Introduced 02/04/10

Assembly Bills

• AB 1662 (Portantino/Jeffries) Disaster Loss Deduction/Excess Loss Carryover/August 2009 Los Angeles County Wildfires/January 2010 Los Angeles County Winter Storms – Amended 03/10/10
• AB 1705 (Perez) Income Exclusion for Specified Energy Property Grants – Introduced 02/01/10 & Amended 03/08/10
• AB 1735 (Harkey) Back To School Tax Credit – Introduced 02/04/10
• AB 1779 (Niello) Mortgage Forgiveness Debt Relief Modification and Extension -Introduced 02/09/10
• AB 1806 (Hagman, et al.) Exclusion Of Capital Gain On Sale Of Principal Residence By Surviving Spouse -Amended 03/15/10
• AB 2177 (Torlakson/Beall) Allow Electronic Communication To Taxpayers To Inform Of Tax Change Or Obligation – Introduced 02/18/10

Assembly Special Session Bills

• ABX8 34 (Jeffries) Principal Residence Credit – Introduced 02/01/10

Senate Bills

• SB 1076 (Price) Voluntary Contribution Fund Designation/Arts Council Fund – Introduced 02/17/10
• SB 1316 (Romero) Legislative Intent To enact Legislation To Phase Out Specified Tax Credits – Introduced 02/19/10
• SB 1391 (Yee) PIT Definitions Technical Amendment – Introduced 02/19/10

Analyses Posted This Week

Assembly Bills

• AB 347 (Bass, et al.) Charitable Contribution Deduction Haiti Earthquake – Revised Original 01/27/10
• AB 347 (Bass, et al.) Charitable Contribution Deduction Haiti Earthquake – FINAL
• AB 1806 (Hagman) Exclusion Of Capital Gain On Sale Of Residence By Surviving Spouse – Introduced 02/10/10
• AB 1983 (Torrico) Safely Surrendered Baby Fund – Introduced 02/18/10

Assembly Special Session Bills

• ABX8 8 (Comm on Budget) Occupational And Professional License Suspension For Unpaid Tax/Abusive Tax Shelters/Financial Institution Record Match- Amended 02/17/10

Senate Special Session Bills

• SBX6 3 (Calderon) Principal Residence Credit – Introduced 02/08/10
• SBX8 8 (Budget Comm) Occupational And Professional License Suspension For Unpaid Tax/Abusive Tax Shelters/Financial Institution Record Match – Introduced 02/22/10
• SBX8 29 (Steinberg, et al.) FTB, BOE & Employees In Positions Funded 95 Percent By Other Sources Than General Fund Exempt From Furloughs – Introduced 02/05/10 & Amended 03/04/10
• SBX8 29 (Steinberg, et al.) FTB, BOE & Employees In Positions Funded 95 Percent By Other Sources Than General Fund Exempt From Furloughs – FINAL
• SBX8 39 (Calderon) Principal Residence Credit – Introduced 02/08/10

Top 12 tax scams

It’s a new year and a good time to remind your clients about the top tax scams. / more+

Pass-through entities must timely file original tax returns claiming new jobs tax credit in order for owners to claim the credit

A new jobs tax credit of $3,000 is available to small businesses with 20 or less employees for each additional net full-time employee hired and employed in California for tax years beginning on or after January 1, 2009. The total amount of the credit that we can allocate may not exceed $400 million, and claims must be made before a statutorily provided “cut-off” filing date. / more+

Using the Annualization Method in 2009 and 2010

Estimated tax payments have undergone many changes since we started filing season one year ago. / more+

Small Business

Timing is everything

Is your client considering making an S corporation election? Selling or exchanging 50 percent or more of the total interests in an LLC or limited partnership? / more+

Ask the Advocate

Withholding and estimate tax payment changes

This summer the California legislature again revised the estimated tax payment percentages, and also passed some clean-up legislation to clear up confusion on how wage earners with only wage withholding would meet the new estimated tax payment requirements. / more+

Inside FTB

Take a look at the changes happening here at FTB. / more+

Criminal Corner

Our monthly summary on bringing tax criminals to justice, and closing the tax gap one case at a time. / more+

Big Business

California code of civil procedure and foreclosures

Will you clarify how California civil procedures interact with the Internal Revenue Code (IRC)? Specifically how does California Civil Procedure Code (CCP) Sections interact with IRC Section 108, Income from Discharge Indebtedness? / more+

Spidell’s Flash Email has reported the following news from the Franchise Tax Board for 2010:

The FTB will not assess the mandatory e-pay penalty for individuals in 2010. The FTB will continue to focus efforts on education and outreach so that taxpayers and their representatives can implement processes and procedures to comply with the mandatory e-pay requirement. The law requires taxpayers who make a payment of more than $20,000, or who have a tax liability of more than $80,000 in a year beginning on or after January 1, 2009, to make all future payments electronically. The FTB will continue to monitor compliance levels to determine the appropriate time to begin imposing the penalty provision of the statute.