State Tax FTB

Franchise Tax Board

The State taxing agencies are in direct competition with the IRS for your tax dollars. They usually assess an income tax before the IRS. By State Law, they rely on many creative ways to determine your income. If you possess a business, professional or contractor’s license, the State uses an average “gross” income based upon your profession. They do NOT include any business expenses. Also, if you trade stocks and bonds, stock sales are totaled up and your gross income derived by the total sales price. Again, the State does NOT assume a purchase price paid for the stock. You may sell $100,000 of stock and lose money but the State never assumes this and taxes you based upon $100,000 profit.

EDD –Employment Development Department

The State employment tax arm is the EDD. Again, if you do not file quarterly payroll reports, the EDD assumes employees exist (even if they don’t) and assess you a tax. The EDD accepts payments and even an Offer In Compromise if you qualify.

SBE – State Board of Equalization

The State Sales tax arm is the SBE. The SBE is normally the toughest agency, as money was collected from customers in the name of sales tax, yet it was not paid. Payment plans are available but in very short duration. State tax problems are just as serious as Federal tax problems and can put you and your business in a huge hole. Tax Solutions Group can dig you out.

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