Interest Computation Adjustments - Update
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October 2, 2015
Purpose of bulletin
To provide staff with additional information about interest computations in certain circumstances involving either:
- May Department Stores v. United States (IRS Revenue Ruling 99-40)
- Corporate Interest Netting (IRS Revenue Procedure 94-60)
On July 21, 2015, at the Franchise Tax Board (FTB) meeting staff provided an update on progress made to identify tax years that may be subject to interest computation adjustments as a result of the May Department Store ruling and Corporate Interest Netting.
We provided an update on the fiscal impact prior to the September FTB meeting. We added the estimated fiscal impact to the table below:
|Tax Type||Computation Type||Maximum Taxpayers Impacted||Estimated Maximum Fiscal Impact|
|Personal Income Tax||May Dept Store||24,000||$1.5 million|
|Business Entities||May Dept Store||2,000||$14.5 million|
|Business Entities||Corporate Interest Netting||1,000||To Be Determined|
We will determine the fiscal impact of Corporate Interest Netting and provide an update to include those figures. We will credit impacted accounts, issue refunds, if applicable, and send letters of explanation to impacted taxpayers beginning in the fall 2015.
Taxpayers can call us at 800.852.5711, weekdays, 7 a.m. to 5 p.m., except state holidays.
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