Franchise Tax Board California Competes Tax Credit Review Procedures

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The Franchise Tax Board (“FTB”) will begin reviewing California Competes Tax Credit Agreements of all recipient of the credit (except for small businesses) beginning this summer. If FTB determines that credit recipients have failed to achieve the employment and investment milestones set forth in their credit agreements, FTB may recommend that the awarded credits be recaptured. During the course of FTB’s review, it may request from credit recipients any information relevant to the credit agreements, and will have access to all of the information submitted in the course of the recipients’ application for a credit award. Credit recipients and future credit applicants should be aware that FTB is not prohibited from using any of this information for purposes of an unrelated income or franchise tax audit, and that contesting an FTB recommendation to recapture the credit may present unique procedural challenges.

Additional Source: Franchise Tax Board California Competes Tax Credit Review Procedures, co-authored by Michael Cataldo and Paul Casas.