California Tax Board Immune From Wrongful Taxation Suit

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By David McAfee

The California Franchise Tax Board prevailed in a lawsuit filed in Kansas federal court over the alleged wrongful taxation of an individual.

Judge Carlos Murguia of the U.S. District Court for the District of Kansas granted the FTB’s motion for relief from default and motion to dismiss in the case, which was brought by plaintiff Ronald E. Davis. Bank of America and its subsidiaries are also named in the complaint ( Davis v. Bank of Am. , D. Kan., No. 2:16-cv-02506, 12/23/16 ).

The court accepted the FTB’s assertion that it is a state agency and therefore “a part of the State of California.”

“As a branch of the State of California, the Franchise Tax Board is immune from suit unless Congress or the State unequivocally waives that immunity,” Judge Murguia wrote Dec. 23 in the six-page memorandum and order.

The judge set aside a default judgment against the FTB and found that alleged civil rights violations must be litigated in state court. Court documents show the lawsuit was filed after the FTB deducted about $700 from Davis’ Bank of America account to satisfy a tax liability.

To contact the reporter on this story: David McAfee in Los Angeles at

To contact the editor responsible for this story: Ryan C. Tuck at

For More Information

Text of the ruling is at

Copyright © 2016 Tax Management Inc. All Rights Reserved.

Request Weekly State Tax Report