Archives for November 2018

Wage and Tax Statements due January 31

Wage and Tax Statements due January 31

The IRS reminds employers and other businesses that January 31 remains the filing deadline for wage statements and independent contractor forms.

Employers are required to file their copies of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by January 31. Certain Forms 1099-MISC, Miscellaneous Income, filed with the IRS to report non-employee compensation to independent contractors, are also due at this time.

Visit IRS.gov and read the instructions for Forms W-2 & W-3 and the Information Return Penalties page for more information.

BUREAU OF CANNABIS CONTROL, Fees

Bureau of Cannabis Control Emergency Regulations CODE OF REGULATIONS TITLE 16 DIVISION

§ 5014. Fees
(a) The application fee for an annual license under section 5002 of this division, a cannabis event
organizer license under section 5600 of this division, a temporary cannabis event license under
section 5601 of this division for each event, and physical modification of the premises under
section 5027 of this division shall be paid by an applicant or licensee as provided by this
division. Applicants and licensees shall pay the appropriate fee as outlined in this subdivision.
Application Fee Schedule
License Type Fee Per
Application
All Annual Licenses $ 1,000
Cannabis Event Organizer License $ 1,000
Temporary Cannabis Event License $ 1,000
Physical Modification of Premises $ 500
(b) The annual licensing fee for each license shall be paid by an applicant or licensee after the
Bureau has approved the application. The Bureau shall not issue the license until the annual
licensing fee has been paid.
(c) In determining the appropriate license fee to be charged, each applicant or licensee shall
estimate the maximum dollar value of its planned operation in terms of the value of the product
expected to be tested, distributed, transported, retailed, cultivated and/or manufactured as
determined in assessing the 15% excise tax pursuant to Revenue and Taxation Code section
34011. The applicant or licensee will use the maximum dollar value of its planned operation to
determine the appropriate fee as outlined in the following fee schedule.

Annual License Fee Schedule
License Type Operations
($ Max. Per License)
Fee Per
License
Testing Laboratory up to 50 million $ 12,500
greater than 50 million to 400 million $ 45,000
greater than 400 million $ 90,000
Distributor up to 3 million $ 1,200
greater than 3 million to 12 million $ 10,000
greater than 12 million to 60 million $ 50,000
greater than 60 million to 120 million $100,000

License Type Operations
($ Max. Per License)
Fee Per License
greater than 120 million $200,000
Distributor Transport Only
Self-Distribution
up to 3 million $500
greater than 3 million to 12 million $1,500
greater than 12 million $4,000
Distributor Transport Only up to 3 million $1,000
greater than 3 million to 12 million $2,800
greater than 12 million $6,000
Retailer up to 0.75 million $ 4,000
greater than 0.75 million to 2.5 million $ 20,000
greater than 2.5 million to 7.5 million $ 64,000
greater than 7.5 million $ 120,000
Microbusiness up to 0.75 million $ 10,000
greater than 0.75 million to 2.5 million $ 30,000
greater than 2.5 million to 7.5 million $ 100,000
greater than 7.5 million $ 180,000

(d) Notwithstanding the fees identified above, cannabis event organizers shall pay the
appropriate fee as outlined in this subdivision.

Annual License Fee Schedule for Cannabis Event Organizers
License Type Planned Operations
(Number of Operations)
Fee Per
License
Event Organizer 1-10 events annually $ 5,000
greater than 10 events annually $ 15,000
(e) All fees are nonrefundable.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26051.5 and
26180, Business and Professions Code.

Get Ready for Taxes: Safekeeping tax records helps for future filing, amended returns, audits

Get Ready for Taxes: Safekeeping tax records helps for future filing, amended returns, audits

With the tax filing season quickly approaching, the Internal Revenue Service wants taxpayers to understand how long to keep tax returns and other documents.

This is the seventh in a series of reminders to help taxpayers Get Ready for the upcoming tax filing season. The IRS has recently updated its Get Ready page with steps to take now for the 2019 filing season.

The IRS generally recommends keeping copies of tax returns and supporting documents at least three years. Employment tax records should be kept at least four years after the date that the tax becomes due or paid, whichever is later. Tax records should be kept at least seven years if a return claims a loss from worthless securities or a bad debt deduction. Copies of previously-filed tax returns are helpful in preparing current-year tax returns and making computations if a return needs to be amended.

Safe-keeping records

Tax records should be kept safe and secure regardless of whether they are stored on paper or kept electronically. Paper records should be kept in a secure location, preferably under lock and key, such as a secure desk drawer or a safe. Records retained electronically should be backed up electronically and encrypted when possible. The IRS also suggests scanning paper tax and financial records into a format that can be encrypted and stored securely on a flash drive, CD or DVD with photos or videos of valuables.

Disposing of records

Tax records contain sensitive data such as Social Security numbers, income amounts and bank account information. Tax documents not properly disposed of can land in the hands of criminals and lead to identity theft. Once past their useful date, records should be disposed of properly. Paper tax returns and supporting documents should be shredded before being discarded. Old computers, back-up drives and media contain sensitive data. Deleting stored tax files will not completely erase them. Using special wiping software ensures the removal of sensitive data.

BUREAU OF CANNABIS CONTROL, Payment of Fees

Bureau of Cannabis Control Emergency Regulations CODE OF REGULATIONS TITLE 16 DIVISION

§ 5015. Payment of Fees
(a) Any fee specified in this division shall be made to the Bureau of Cannabis Control by cash,
check, money order, debit card, or credit card. Check and money order payments may be made
out to the Bureau of Cannabis Control or the Department of Consumer Affairs.

(b) If the fee is paid by debit or credit card:
(1) The payment shall be made through the Bureau’s online licensing system; and
(2) The applicant or licensee may be required to pay any associated processing or convenience
fees to the third-party vendor processing the payment on behalf of the Bureau.
(c) Failure to pay the appropriate licensing fee is grounds for discipline. If the Bureau determines
that the licensee paid an amount less than the appropriate licensing fee under section 5014 of this
division, the licensee will be required to pay the balance of the appropriate fee and a penalty fee
of 50 percent of the appropriate licensing fee. The Bureau in its discretion may waive the penalty
fee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26051.5 and
26180, Business and Professions Code

Get 2018 tax documents ready for upcoming filing season

Get Ready for Taxes: Get 2018 tax documents ready for upcoming filing season

The IRS reminds taxpayers to keep a copy of their past tax returns and supporting documents for at least three years. Certain key information from their prior year return may be required to file in 2019.

This is the fifth in a series of reminders to help taxpayers Get Ready for the upcoming tax filing season. The IRS has recently updated its Get Ready page with steps to take now for the 2019 tax filing season.

Keeping copies of prior year tax returns saves time. Often previous tax information is needed to file a current year tax return or to answer questions from the Internal Revenue Service. Taxpayers claiming certain securities or debt losses should keep their tax returns and documents for at least seven years.

Use a tax return to validate identity

Taxpayers using tax filing software for the first time may need their adjusted gross income (AGI) amount from their prior year’s tax return to verify their identity. Learn more at Validating Your Electronically Filed Tax Return. Those who need a copy of their tax return should first check with their software provider or tax preparer. Taxpayers can also obtain a free tax transcript from the IRS, or for a fee, order a copy of their tax return.

Order a transcript

A tax transcript can be ordered from the IRS. It summarizes tax return information and includes AGI. Tax transcripts are free and available for the most current tax year after the IRS has processed the tax return. Tax transcripts are available for the past three tax years.

Plan ahead. Delivery times for online and phone orders typically take five to 10 days from the time the IRS receives the request. Taxpayers who order by mail should allow 30 days to receive transcripts and 75 days for tax returns.

There are three ways for taxpayers to order a transcript:

Online. Taxpayers can use Get Transcript Online on IRS.gov to view, print or download a copy of all transcript types. Those who use it must authenticate their identity and create an account using the Secure Access process. Please allow five to 10 calendar days for delivery.
By phone. Call 800-908-9946.
By mail. Taxpayers who are unable to register or prefer not to use Get Transcript Online may use Get Transcript by Mail. Taxpayers can complete and send the IRS either Form 4506-T, Request for Transcript of Tax Return, or Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Use Form 4506-T to request other tax records: tax account transcript, record of account, wage and income and verification of non-filing. These forms are available on the Forms, Instructions and Publications page on IRS.gov.Those who need an actual copy of a tax return can get one for the current tax year and as far back as six years. The fee per copy is $50. Taxpayers can complete and mail Form 4506 to request a copy of a tax return and mail the request to the appropriate IRS office listed on the form.
If taxpayers need information to verify payments within the last 18 months or a tax amount owed, they can view their tax account.
The IRS is now redacting tax transcripts so that sensitive information, such as the taxpayer’s name, address and Social Security number, is partially masked. However, all financial entries, such as the adjusted gross income, are visible. The redacted transcript will better protect taxpayers from identity theft.

BUREAU OF CANNABIS CONTROL, Incomplete Applications

Bureau of Cannabis Control Emergency Regulations CODE OF REGULATIONS TITLE 16 DIVISION

§ 5012. Incomplete Applications
(a) If the Bureau determines that the application is incomplete, the Bureau may provide notice to
the applicant in accordance with Business and Professions Code section 124.
(b) If the Bureau issues a notice pursuant to Business and Professions Code section 124, an
applicant has one year from the date of the notice in subsection (a) to correct all deficiencies. If
the applicant fails to correct the deficiencies within the one-year period and has not responded to
the Bureau’s attempts to contact the applicant, the application shall be considered abandoned
under Business and Professions Code section 142.
(c) An applicant may reapply at any time following an abandoned application.
(d) The Bureau will not refund application fees for an incomplete or abandoned application.
Authority: Section 26013, Business and Professions Code. Reference: Sections 124, 142, 26050
and 26051.5, Business and Professions Code.

Some S corporations may want to convert to C corporations

Some S corporations may want to convert to C corporations

After last year’s tax reform legislation, some S corporations may choose to revoke their S election to be a C corporation because of the new, flat 21-percent C corporation tax rate. Before taking any action, S corporations should consult their tax advisors.

S Corporations and C Corporations are among the types of business structures. A C corporation is taxed on its earnings, and then the shareholder is taxed when earnings are distributed as dividends. S corporations elect to pass corporate income, losses, deductions and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the pass-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level.

The Tax Cuts and Jobs Act includes two changes that affect a corporation’s revocation of an S election to be a C corporation:

The corporation should report net adjustments attributable to the revocation over six years. For more information see Revenue Procedure 2018-44.
Distributions of cash following the post-termination transition period may be treated as coming out of the corporation’s accumulated adjustments account and accumulated earnings and profits proportionally resulting in part of the distributions being non-dividend distributions from the C corporation. The non-dividend distributions may not be subject to tax at the shareholder level if the shareholder has sufficient stock basis. Additional guidance will be coming.

These law changes only apply to a C corporation that:

Was an S corporation on December 21, 2017,
Revokes its S corporation election after December 21, 2017, but before December 22, 2019, and
Has the same owners of stock in identical proportions on the date of revocation and on December 22, 2017.

For more information, see the Corporate Methods of Accounting topic on the Tax Reform – Businesses page.

BUREAU OF CANNABIS CONTROL, Compliance with the California Environmental Quality Act

Bureau of Cannabis Control Emergency Regulations CODE OF REGULATIONS TITLE 16 DIVISION

§ 5010. Compliance with the California Environmental Quality Act
(a) All applicants shall provide evidence of exemption from, or compliance with, Division 13 of
the Public Resources Code, California Environmental Quality Act (CEQA), as required by
section 5002(c)(33) of this division.
(b) The evidence provided pursuant to subsection (a) of this section shall be one of the following:
(1) A copy of the applicant’s license, permit, or other authorization from the local jurisdiction if
the local jurisdiction has adopted an ordinance, rule, or regulation pursuant to Business and
Professions Code section 26055(h) that requires discretionary review and approval of permits,
licenses, or other authorizations to engage in commercial cannabis activity.
(2) A copy of the Notice of Determination or Notice of Exemption and a copy of the CEQA
document, or reference to where it can be located electronically, if the applicant does not wish to
provide a copy of the license, permit, or other authorization provided by the local jurisdiction or
if the local jurisdiction has not adopted an ordinance, rule, or regulation pursuant to Business and
Professions Code section 26055(h) that requires discretionary review and approval of permits,
licenses, or other authorizations to engage in commercial cannabis activity.
(c) If an applicant does not have the evidence specified in subsection (b) of this section, or if the
local jurisdiction did not prepare a CEQA document, the applicant will be responsible for the
preparation of an environmental document in compliance with CEQA that can be approved or
certified by the Bureau, unless the Bureau specifies otherwise.
Authority: Section 26013, Business and Professions Code. Reference: Section 26055, Business
and Professions Code.

BUREAU OF CANNABIS CONTROL, Additional Information

Bureau of Cannabis Control Emergency Regulations CODE OF REGULATIONS TITLE 16 DIVISION

§ 5011. Additional Information
The Bureau may request additional information and documents from the applicant. The Bureau
will provide the applicant a deadline for submittal of additional information. The Bureau will
consider the complexity of the information requested and the ease with which the information
can be obtained and transmitted to the Bureau by the applicant in determining the deadline.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26031, 26050
and 26051.5, Business and Professions Code.

Corporate Minutes and Compliance, it’s really necessary!

A lost corporate minute book can be a major problem for both you and your corporation, as the corporate minute book is one of the most important business documents you and the corporation can have. Its purpose is to contain all the corporation’s important documents, such as the certificate of incorporation, articles of incorporation, along with records of important actions taken by the corporation, such as issuing shares, purchasing real estate, purchasing other businesses, obtaining various licenses. When borrowing mony from a bank, the bank will do it’s due diligence and ask to review your corporate minute book. The loss of the corporate minute book can be a catastrophic event for your corporation, so all possible steps should be made to keep it safe.

Wage and Tax Statements due January 31

BUREAU OF CANNABIS CONTROL, Fees

Get Ready for Taxes: Safekeeping tax records helps for future filing, amended returns, audits

BUREAU OF CANNABIS CONTROL, Payment of Fees

Get 2018 tax documents ready for upcoming filing season

BUREAU OF CANNABIS CONTROL, Incomplete Applications

Some S corporations may want to convert to C corporations

BUREAU OF CANNABIS CONTROL, Compliance with the California Environmental Quality Act

BUREAU OF CANNABIS CONTROL, Additional Information

Corporate Minutes and Compliance, it’s really necessary!

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