California Business Portal

What is the Franchise Tax Board’s (FTB) City Business Tax Program?

Effective January 2009, and as the result of the enactment of Senate Bill 1146 (Cedillo) (Chapter 345, Statutes of 2008), FTB and participating cities began exchanging data through a reciprocal agreement. 

City data helps identify self-employed individuals who are not filing required individual and business entity income tax returns, and state tax data helps identify businesses that may have a local business tax filing requirement.

Law references are—California Revenue and Taxation Code (R&TC) Sections: 19542, 19542.1, 19542.3, 19551, 19551.1, 19551.5, 19552, and California Civil Code 1798.29

Types of data exchanged 
Cities provide FTB:  
  • Business and owner's name
  • Business or residence address
  • FEIN or SSN
  • North American Industry Classification Code or Standard Industry Classification Code
 FTB provides cities: 
  • Taxpayer name
  • Taxpayer address
  • Taxpayer SSN or FEIN
  • Entity type
  • Principal Business Activity (PBA) Code from Form 540— California Resident Income Tax Return
Safeguarding FTB  data
FTB provides data to city tax officials that is confidential tax information, any improper usage or disclosure of this information carries certain civil and criminal liabilities. Provisions are made within the agreements to ensure: 
  • Taxpayer data is safeguarded. The city must complete and submit a Safeguard Questionnaire. The questionnaire must be on file before FTB can send the data (R&TC 19542).
  • Only city employees named in the confidentiality statement have access to the data. This statement acknowledges that named employees understand the consequences of improper disclosure.
  • The data will only be used for the administration of tax within the city.
  • The city maintains the security and confidentiality of the data. Destruction of the data is mandated after 3 years.
  • The city is aware that FTB disclosure staff conducts safeguard reviews. This review includes inspection of the confidentiality and the security of the data.

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