The maximum number of months that the Franchise Tax Board (FTB) may grant as an automatic extension of time for filing California partnership returns is increased from six months to seven months, applicable to returns required to be filed for taxable years beginning on or after Jan. 1, 2017. This authorizes the FTB to extend the due date to October 15 instead of September 15.

Also, due to the challenges of complying with the new due date for filing partnership returns that was enacted by Ch. 348 (A.B. 1775), Laws 2016, and the inherent complexities of preparing partnership returns, the Legislature has expressed its intent that, for the 2016 taxable year only, the FTB will presume reasonable cause and not willful neglect if:

• A partnership’s return for taxable year 2016 is filed by October 15, 2017, for calendar-year filers, or by the 15th day of the 10th month following the close of the taxable year for fiscal-year filers; and
• The partnership requests relief, in the form and manner specified by the FTB, from imposition of either or both the delinquent filing penalty under Rev. & Tax. Code Sec. 19131 and the failure of a partnership to comply with filing requirements penalty under Rev. & Tax. Code Sec. 19172.

Sales and use tax provisions affected by this legislation are discussed separately.

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