Effective January 1, 2022, the California Franchise Tax Board (“FTB”) has the authority under Assembly Bill 466 to share information with the State Controller’s Office (“SCO”) relating to a taxpayer’s compliance with the California’s unclaimed property laws. To gather this information, the FTB has added a few questions to California’s business entity tax returns for tax year 2021, including whether the business has previously filed an unclaimed property Holder Remit Report with the SCO, the date the report was filed, and the amount of unclaimed property remitted. These questions have been added to California forms 100, 100S, 100W, 565, and 568.
Prior to this change, the FTB was authorized to provide the SCO only with information necessary to locate owners of unclaimed property, including the owner’s last known address or location information from income tax returns or other records. The FTB is now permitted to share a taxpayer’s response to these compliance-focused questions with the SCO. Although the SCO may only use this information to educate taxpayers not currently in compliance with its escheat laws, California has a reputation as an aggressive state and there is always the risk of increased California audit activity.
For questions, please reach out to a member of HMB’s SALT Team.