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FTB Notice 97-6

State Seal

STATE OF CALIFORNIA


FRANCHISE TAX BOARD Legal Branch
P.O. Box 1720
Rancho Cordova, CA 95741-1720
Telephone (916) 845-3309
FAX (916) 845-3648

KATHLEEN CONNELL
Chair

ERNEST J. DRONENBURG, JR.
Member

CRAIG L. BROWN
Member

August 12, 1997

FTB Notice 97-6

SUBJECT: REQUEST FOR PUBLIC COMMENT DISCUSSION DRAFT OF REGULATION 25106.5 COMBINED REPORT MECHANICS

The Franchise Tax Board staff will recommend adoption of a series of regulations under Section 25106.5 Revenue and Taxation Code which would provide rules to describe the general mechanics of combined reporting, currently reflected in FTB Publication 1061, Guidelines for Corporations Filing a Combined Report. Staff has prepared a set of discussion draft regulations directed at that objective.

Because of the continued controversy surrounding the Appeal of Finnigan (Cal. St. Bd. of Equal., 88-SBE-022, Aug. 28, 1988, pet. reh. den. 88-SBE-022A, Jan. 25, 1990), Appeal of NutraSweet (Cal. St. Bd. of Equal., 92-SBE-024, October 29, 1992), and FTB Notice 90-3, staff has prepared two versions of the regulation, one of which adopts the method of apportionment prescribed by FTB Notice 90-3 (Finnigan/ NutraSweet), and the other which adopts the pre-Finnigan approach of Legal Ruling 234 (Oct. 27, 1959).

Because of the potentially broad impact of those regulations, the Franchise Tax Board staff is making the draft regulations, and a brief explanation of the regulations, available to the public for review and comment prior to formal regulatory notice.

For copies of the discussion draft regulations and explanation, or for further information regarding this notice, contact Beverly Moore at the Franchise Tax Board Legal Branch, P.O. Box 1720, Rancho Cordova, CA 95741-1720; Tel. (916) 845-3354; Fax: (916) 845-3648, E-Mail: bev_moore@ftb.ca.gov. The draft and explanation are also available at the Franchise Tax Board’s website at www.ftb.ca.gov.

Written comments regarding the draft regulation may also be addressed to Ms. Moore and should be submitted by December 1, 1997. If there is sufficient interest, the department will hold a public meeting or symposium on the draft regulations prior to commencing the formal notice process.

If you are interested in obtaining supplements to the draft regulations, or the formal notice of the regulations, if applicable, please advise Ms. Moore at the above address, and she will add your name to the mailing list.

Drafting Information

The principal author of this notice is Michael Brownell of the Franchise Tax Board, Legal Branch. For further information regarding this notice, contact Mr. Brownell at the Franchise Tax Board, Legal Branch, P.O. Box 1720, Rancho Cordova, CA 95741-1720.