The Franchise Tax Board is California state governmental agency that is responsible for collecting individual income taxes for California residents. In addition, the board collects business and corporate taxes from entities that operate in this state. California Franchise Tax Board also helps other governmental agencies such as the California Department of Motor Vehicles to 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 controller and the State Board of Equalization were created to handle California taxations. During the 1929 legislative term, the Office of the Franchise Tax Commissioner was formed to administer a new bill, the Bank and Corporation Franchise Tax Act. The Office of Franchise Tax Commissioner was replaced by the California Franchise Tax Board in 1950.
The Board 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 that operate in California. California's general fund receives 60.5 percent of its monies from taxes generated from these taxes.
In addition to collecting taxes, the Franchise Tax Board administers other programs that benefit Californians. For example, the tax board offers assistance to homeowners and renters whose income is lower than specified yearly requirements and assistance for people who are blind, disabled, or at least 62 years old. The Tax Board also offers tax assistance 24 hours a day, seven days a week in English and Spanish as well as helping those who are hearing impaired communicate via the telephone regarding tax issues. People who are elderly, are disabled, do not speak English, or are low income can receive free tax help at more than 1,000 places throughout California on both California and federal returns.
The Franchise Tax Board also helps other governmental agencies in California collect monies owed to them. For example, the Board is authorized to seize and turn over California tax refunds or California lottery winnings to the appropriate agencies if the lottery winner or the entity that is due a tax refund is delinquent in paying that agency. In addition, the Franchise Tax Board helps collect money from those who are delinquent in paying child support fees, paying court-ordered debts, and paying labor law violation fees.
