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Governor signs budget bills

June 28, 2017

(6/29/17 Update: Although budget trailer bill AB 119 is effective for the 2017 taxable year, for the 2016 taxable year the FTB is directed to presume reasonable cause if a partnership, or an LLC taxed as a partnership, files its 2016 calendar year return by October 16, 2017. We will let you know when the FTB releases procedures to use when filing a partnership return after September 15, 2017, and on or before October 16, 2017.)

The Governor signed the 2017–18 budget, along with numerous tax-related trailer bills that:

  • Authorize a seven-month automatic extension period for partnership returns (AB 119);
  • Transfer most of the current BOE functions to two new agencies (AB 102); and
  • Clarify the imposition of marijuana taxes and allow for cash payments of the taxes (SB 94).

AB 119 authorizes the FTB to grant an automatic seven-month extension period to file partnership returns, including LLCs taxed as partnerships, effective for returns required to be filed for the 2017 and later tax years. (R&TC §18567) For calendar-year partnerships and LLCs taxed as partnerships, the extended due date will be October 15.

Last year, California conformed to the modified federal due dates for partnerships, requiring calendar-year partnerships to file returns by March 15. (AB 1775 (Ch. 16-348)) However, the six-month extension period was not changed for California purposes. As a result, calendar-year partnerships (and LLCs taxed as partnerships) must file their extended 2016 tax year California return by September 15, 2017. This matches the extended due date for federal returns but is one month earlier than prior-year California returns.

The legislation did not address extended due dates for any other entity returns.

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