In light of the recent wildfires in Los Angeles County, California is providing relief for state franchise and income tax, sales and use tax, property tax, and payroll tax.
Franchise and Income Tax
In alignment with the federal extension recently given to California wildfire victims, California Gov. Gavin Newsom announced that for taxpayers in Los Angeles County, the California Franchise Tax Board (FTB) will postpone until October 15, 2025, the deadline for filing 2024 California tax returns and making any tax payments that would have been due January 7, 2025, through October 15, 2025. The postponement includes:
- Individual income tax returns and payments for 2024 that would normally be due April 15, 2025;
- Quarterly estimated tax payments that would normally be due January 15, April 15, June 15, and September 15, 2025;
- Calendar-year 2024 partnership, limited liability company, and S corporation tax returns and payments that would normally be due March 15, 2025;
- Calendar-year 2024 corporate and fiduciary income tax returns and payments that would normally be due April 15, 2025;
- Calendar-year 2024 returns filed by tax-exempt organizations that would normally be due May 15, 2025; and
- Elective pass-through entity tax payments that would normally be due March 15 and June 15, 2025.
The FTB has posted answers to commonly asked questions about the relief.
Taxpayers whose principal residences or principal places of business are in Los Angeles County are eligible for tax relief even if they were not directly affected by the fires, and generally, no supporting documentation is required. To alert the FTB of their filing status, taxpayers should write the name of the disaster (for example, “Los Angeles County Fire”) in blue or black ink at the top of their tax returns; taxpayers filing electronically should follow the relevant software instructions to enter disaster information. Further, to ensure payments are processed timely and accurately, the FTB requests that separate payments for different tax years be submitted instead of one lump-sum payment.
Sales and Use Tax
Newsom also announced that the California Department of Tax and Fee Administration (CDTFA) has automatically extended the return filing deadline for three months for taxpayers in Los Angeles County. Accordingly, returns and payments due on or before January 31, 2025, are automatically extended to April 30, 2025, for Los Angeles County taxpayers that owed less than $1 million in tax on their last returns. That includes sales and use tax and most other CDTFA-administered programs. Affected business owners not subject to the automatic extension or who require additional relief should contact the CDTFA for assistance.
On request, the CDTFA will continue to offer extensions to those affected beyond Los Angeles County. The state might also provide relief from interest and penalties and offer flexible payment plans for businesses.
Property Tax
Los Angeles County property owners whose property was damaged by the fires may be eligible for property tax relief through the misfortune and calamity program. To qualify, property owners must file Form ADS-820, “Application for Reassessment: Property Damaged or Destroyed by Misfortune or Calamity,” with the Los Angeles County Assessor’s Office within 12 months of the date the property was damaged or destroyed and have suffered a loss exceeding $10,000 in current market value.
Also, if the property was substantially damaged or destroyed by a governor-declared disaster, California Proposition 19, which took effect in 2021, provides for the property's tax base to be transferred to a comparable property in California.
Payroll Tax
Employers in Los Angeles and Ventura Counties directly affected by the wildfires can ask the California Employment Development Department for a 60-day extension to file state payroll reports or deposit payroll taxes without penalties or interest. A request for extension must be received within two months from the original delinquent date of the payment or return.
BDO Insight
- Affected taxpayers should review the announcements to see if they qualify for relief and consult their tax advisors on appropriate next steps.
- Disaster losses from the wildfires may be claimed either in the tax year the disaster occurred or the tax year preceding that when the disaster occurred. Thus, California taxpayers may consider claiming disaster losses in tax year 2024 or 2025.
- Even taxpayers that do not think they qualify for relief might be able to benefit in other ways, including from potential tax savings opportunities. They should contact their tax advisors to explore potential alternatives.
Please visit BDO’s State & Local Tax Services page for more information on how BDO can help.