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State of California Franchise Tax Board

Changes to 2002 Forms

2002 Updates to Form 100S Booklet

Revision Date: 04/28/2004

Revision Details: Revisions to Form 100S Corporation Tax Booklet, Schedule B/C/D/H (100S) Page 27, Instructions for Schedule H(100S) Page 28, Flat Side 3, and Package X Page 77 & 78

The Internet versions of the form and instruction have been revised. These revisions are due to the California Court of Appeal ruling that found the R&TC Section 24402 deduction unconstitutional, the form and instructions have been revised to reflect the court decision rules. These changes may increase or decrease the corporate tax liabilities.

  • Schedule H (100S), Page 27, all of Part II

It should read:

Shading all of Part II of Schedule H (100S) due to Farmer Bros. Co. v. Franchise Tax Board court decision.

  • Schedule H (100S) Instructions, Page 28, columns 1, 2, & 3

It should read:

Add What's Changed to the beginning of the instructions for Schedule H (100S):Sh.

Forms, Schedules, and instructions impacted by the court decision in Farmer Bros. Co. v. Franchise Tax Board (2003) have been revised to disallow any deduction taken based on R&TC Section 24402. In Farmer Bros. Col. V. Franchise Tax Board (2003) 108 Cal App 4th, 134 Cal Rptr. 2nd 390, the California Court of Appeal found that the R&TC Section 24402 deductible dividend provision discriminated against interstate commerce in violation of the Commerce Clause of the United States Constitution. R&TC Section 24402 provided for a deduction to the extent that the dividend payer was taxable in California. A statute that is held to be unconstitutional is invalid and unenforceable. Therefore, the deduction is not available.

  • Schedule H (100S) Instructions, Page 28, Part II, are deleted in full.
  • Schedule H (100S) Instructions, Page 28, Part II, explanation added:

It should read:

Part II has been deleted due to the Farmer Bros. Co. v. Franchise Tax Board decision (2003). See What's Changed paragraph above.

  • Schedule H (100S) Instructions, Page 28, column 2, Part III, 2nd paragraph:

It should read:

In no event will a R&TC Section 24411 deduction be allowed with respect to a dividend which was eliminated under R&TC Section 25106.

A revised copy is available to download - April 28, 2004.

Back to Tax Form Changes for 2002

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