California Tax Amnesty…Not?

On August 16, 2004, Governor Schwarzenegger signed into law S.B. 1100 establishing two tax amnesty programs: the personal and corporate income tax amnesty program and the sales/use tax amnesty program to be administered by the Franchise Tax Board (FTB) and Board of Equalization (BOE), respectively. The BOE and FTB will administer the tax amnesty programs beginning February 1, 2005 and ending on March 31, 2005, inclusive. Both tax amnesty programs will apply to tax liabilities due and payable for tax reporting periods (sales/use tax) and for taxable years (personal/corporate income tax) beginning before January 1, 2003.

The FTB Amnesty Program and the BOE Amnesty Program are in reality nothing more than tax payment acceleration programs to reduce the magnitude of California’s budget deficits. With few exceptions, personal and corporate income taxpayers with open tax periods or unpaid liabilities relating to taxable years prior to January 1, 2003—whether or not under audit, in