Ask the Advocate January 2020 Tax News
90 years of FTB
Susan Maples, CPA
Taxpayers' Rights Advocate
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The California Franchise Tax Board (FTB) that I work for, and the one you are all familiar with, is overseen by a 3-member board; also known as the Franchise Tax Board. Its members are the:
- California State Controller
- Director of the California Department of Finance
- Chair of the California Board of Equalization
One agenda item that I always enjoy is whenever FTB has a presentation highlighting some of our agency and staff accomplishments, generally those from the prior year. At the most recent board meeting though, our Executive Officer gave a presentation that shared some history and highlights from FTB’s first 90 years and I wanted to share a few of these with you.
FTB began in 1929, when the California Legislature created the office of the Franchise Tax Commissioner, with a staff of 33 employees to administer California's new Bank and Corporation Franchise Tax Act. California's Personal Income Tax Law was enacted in 1935 as part of a major restructuring of the state's tax system. In the first year of operation, nearly 373,000 returns were filed resulting in $11.8 million in personal income taxes. 90 years later, we have now grown to more than 5,800 employees and for 2019 we processed more than 18 million tax returns for a total of $48.8 billion in revenue.
The 1950s saw the abolishment of the office of the Franchise Tax Commissioner and the creation of the Franchise Tax Board as we know it now, with the first of FTB’s 4 executive officers coming on board. The 1970s were also a period of change for FTB with the start of California income tax withholding and the alternative minimum tax. A new development for many taxpayers came about in the 1980s with California’s first tax amnesty program. In the 1990s, we saw significant improvements in the filing process that we now take for granted, including e-filing of tax returns and the direct deposit of tax refunds.
FTB’s workloads will continue to grow along with the state of California but our commitment to helping taxpayers and tax professionals file timely and accurate returns will never change. If the recent past is any indication of what the future holds, I am sure there will be many changes between now and FTB’s next big milestone, our 100th anniversary. Some of these changes will be anticipated while others will not. For my part, my staff and I will help keep you informed about these changes as those come and will work with you to address and resolve any problems or concerns that arise.