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The California Franchise Tax Board collects personal and business taxes, helps other government agencies collect debts, and offers assistance programs to Californians. It was established in 1950 to administer the Bank and Corporation Tax and Franchise Tax Act.
The Franchise Tax Board is a California state government agency that is responsible for collecting individual income taxes for California residents. In addition, the board of directors collects business and corporate taxes from entities doing business in this state. The California Franchise Tax Board also helps other government agencies like the California Department of Motor Vehicles collect debts.
California became the 31st state in the United States in 1850. In 1879, California adopted a new constitution, replacing the constitution that was developed in 1849 before California was accepted as a state. As a result of this new constitution, the state comptroller and the state Board of Equalization were created to administer taxes in California. During the 1929 legislative term, the Office of the Franchise Tax Commissioner was established to administer a new bill, the Bank and Corporation Tax and Franchise Tax Act. The Commissioner of Franchise Taxes was replaced by the California Franchise Tax Board in 1950.
The Council collects personal income taxes from residents based on all of their income while taxing non-residents on any income earned in California. In addition to personal taxes, the Tax Board collects taxes from businesses and corporations operating in California. The California General Fund receives 60.5 percent of its money from taxes generated by these taxes.
In addition to collecting taxes, the Franchise Tax Board manages other programs that benefit Californians. For example, the Tax Board offers assistance to homeowners and renters whose income is below specified annual requirements, and assistance for people who are blind, disabled, or are 62 years of age or older. The Tax Board also offers tax assistance 24 hours a day, seven days a week in English and Spanish, as well as helping the hearing-impaired communicate tax matters over the phone. Elderly, disabled, non-English speaking, or low-income individuals can receive free tax assistance at more than 1,000 California locations both in California and on federal returns.
The Franchise Tax Board also helps other government agencies in California raise funds owed to them. For example, the Board is authorized to seize and deliver California tax refunds or California lottery winnings to the appropriate agencies if the lottery winner or the entity to which a tax refund is owed defaults on payment to that agency. In addition, the Franchise Tax Board helps raise money from those who are delinquent in paying child support taxes, paying off court-ordered debts, and paying labor law violation taxes.
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