Detailed California Development
The California FTB has released guidance on application of the proposed market-based sourcing regulations (CCR section 25136-2) to 2020 returns. A recently-issued Public Service Bulletin addresses the fact that the market-based sourcing regulatory project is still ongoing and there is uncertainty as to what tax years the revised regulation will apply. Accordingly, the FTB has announced that 2020 tax returns are not required to be prepared in accordance with the proposed changes to CCR section 25136-2. At the fifth (and most recent) Interested Parties Meeting, there was some discussion that the effective date of the regulatory changes, once finalized, would be retroactive to tax years beginning on January 1, 2019. However, the Bulletin notes that the “actual applicability date for the proposed revisions has yet to be finally determined.” The FTB goes on to advise “that the proposed revisions to CCR section 25136-2 will not apply for taxable years beginning during the 2020 calendar year.” Please stay tuned to TWIST for future updates on the revisions to CCR section 23536-2.
This Week's Developments