This article is from Cal-Tax Digest, published
by the California Taxpayers' Association.
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Open Letter: FTB Meeting Needed to Resolve Ceridian

Editor’s Note: The following letter has been sent to State Controller Kathleen Connell, chair of the Franchise Tax Board, urging her to call a meeting of the FTB to deal with uncertainty surrounding millions of dollars in taxes.

Dear Dr. Connell:

The undersigned coalition of taxpayers requests that the Franchise Tax Board meet and formally act to resolve the ongoing uncertainty which has arose as a consequence of the Court of Appeal’s decision in Ceridian v. Franchise Tax Board.

In March of this year, FTB staff proposed that your Board adopt a policy statement in this area that would have limited the refunds the state owes to taxpayers for some years and would also impose millions of dollars in taxes, both retroactively and prospectively, on some California-domiciled companies.

In April, the Cal-Tax coalition submitted its own proposal for consideration by the Franchise Tax Board that was consistent with the Court’s decision and existing statutory law. Most importantly, our proposal would not increase taxes retroactively as the staff proposes. The issues have been thoroughly discussed and presented to the Board by both FTB staff and taxpayers.

At the Board’s May hearing, many speakers indicated the need for the Board to announce its policy on this issue as expeditiously as possible. FTB audits of corporate groups with insurance company members have ground to a halt awaiting the Board’s decision. Transactions are being held up, and the possibility of retroactive tax increases that were completely unplanned cloud corporate decision-making. Now almost three more months have passed without a decision from the Board, and these problems have worsened.

We write to ask your help. These serious uncertainties will only be resolved by decisive action on the part of the Franchise Tax Board by calling a meeting and placing this matter on the agenda as soon as possible. We respectfully request that you do so, and resolve this issue and give California taxpayers the kind of guidance they need to continue their affairs and to build a California economy that will provide prosperity for all. Thank you for your consideration of this request.

California Taxpayers’ Association
California Chamber of Commerce
California Business Roundtable
Association of California Life & Health Insurance Companies
American Insurance Association
California Land Title Association
Fireman’s Fund Insurance Company
Fremont General Corporation
American General Financial Group
Zenith Insurance Company
Citigroup
Pacific Life Insurance Company