Amended Market-Sourcing Rules for Intangible Property

FTB Archive Disclaimer:  Archived content is not current and may contain broken links. It remains online for historical reference or research. The search function above allows you to search archived and current content separately. If you need archived content in a different format, contact us.

October 3, 2016

Purpose of Bulletin

To advise FTB staff how to handle taxpayer inquiries about the amended market-sourcing rules in Regulation 25136-2.

Background

Recent amendments to the California Code of Regulations, Title 18, Section 25136-2 have been approved by the Office of Administrative Law and have been sent to the Secretary of State for finalization. These amendments are effective on January 1, 2017, and will be operative for most taxpayers for tax years beginning on or after January 1, 2015.

The amendments provide:

  • The definition of and assignment rules for "marketable securities"
  • Assignment rules for dividends and goodwill, and
  • Assignment rules for interest

Additional Information

For tax year 2015, the new amendments may require some taxpayers to file an original return if they were not previously aware they had a filing requirement.

Please see the matrix below for additional information on a taxpayer’s eligibility to file in a group return:

Taxpayer Residency Taxpayer Filing Status Can Taxpayer File in a Group Return? Can Taxpayer File in Multiple Group Return?
Nonresident Filed Own 540NR No No
Nonresident Filed In Group Yes Yes
Nonresident Not Filed Return Yes Yes
Resident Filed 540 No No
Resident Not Filed Return No No

FTB will abate applicable penalties as allowed by law. This will be explained in a Franchise Tax Board Notice which will be issued at a later date.

Taxpayer Inquiries

Taxpayers can obtain information at:

  • 800.852.5711 (within the United States)
  • 916.845.6500 (outside of the United States)

Preparers can call the practitioner hotline at 916.845.7057.

Help Us Improve Our Website

Don't include social security numbers or other personal/confidential information.



Thank you for your help.

If you need assistance, contact us.

Oops! Something went wrong.

We appreciate your feedback. Please try again later

 

You are leaving ftb.ca.gov

We do not control the destination site and cannot accept any responsibility for its contents, links, or offers. Review the site's security and confidentiality statements before using the site.

If you have any issues or technical problems, contact that site for assistance.

Ahora está saliendo de ftb.ca.gov

Nosotros no controlamos el sitio web al que se destina y no podemos aceptar ninguna responsabilidad por su contenido, enlaces, u ofertas. Revise las declaraciones de seguridad y confidencialidad del sitio antes de usar el sitio. Si tiene algún problema en general o técnico, comuníquese con ese sitio para obtener asistencia.

Si tiene algún problema en general o técnico, comuníquese con ese sitio para obtener asistencia.