Speaker 03.05.25
03.05
California Tax Trends
Kimpton Sawyer
500 J Street
Sacramento, CA 95814
Jeff Vesely's award-winning practice focuses on state and local tax matters, including income, franchise, sales and use, gross receipts and other taxes.
His practice consists of administrative and judicial tax litigation, state and local tax planning and transactional work, and he has been named “Lawyer of the Year” four times by Best Lawyers in America. Prior to joining the firm in 1985, Jeff was a tax attorney with Getty Oil Co., the California Department of Justice Tax Division, and the California Franchise Tax Board. He has litigated state and local tax matters throughout the United States, in administrative tribunals, state and federal trial courts, courts of appeal, state supreme courts and the U.S. Supreme Court.
Representative Experience
- Prevailed on behalf of Apple in challenging Franchise Tax Board’s treatment of foreign dividends and the disallowance of interest expense deductions in a water’s edge setting. In the first published court decision dealing with the interest expense issues, the California Court of Appeal fully allowed the deductions.
- Defended Roman Catholic Archbishop of San Francisco in an unprecedented $22 million tax dispute with the City and County of San Francisco, reaffirming that internal transfers of property between affiliated corporations are exempt from documentary transfer taxes. (Kerne Matsubara, co-counsel)
- Achieved victory for Beneficial New Jersey in New Jersey Tax Court case involving interest add-back provisions. Court concluded that the taxpayer’s interest expense deductions should be fully allowed under the unreasonable exception.
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- In the lead case for the entertainment industry in the Indiana tax court challenging the Department of Revenue’s controversial use of an audience factor in computing income, completely abated assessments of $21 million for a well-known cable TV network. (Annie Huang, co-counsel)
- Successfully abated a multimillion-dollar assessment in Michael J. and Mary E. Bills, a State Board of Equalization appeal involving contentious California residency and source of income issues. (Annie Huang, co-counsel)
- Argued General Electric v. Franchise Tax Board, which challenged the validity of California’s controversial amnesty penalty.
- In Save Mart Supermarkets, successfully argued the first case decided in California involving the Manufacturers’ Investment Credit. The Franchise Tax Board’s regulation defining qualified taxpayers was invalidated.
- Argued Guy F. Atkinson Co. of California v. Franchise Tax Board, which involved the application of tax credits in a unitary business setting.
- Argued Navistar International Transportation Corp., et al. v. State Board of Equalization, which involved the taxability of intangibles under the California sales and use tax law.
Professional Highlights
- Chambers USA, Tax—California (2007 – 2013), Tax: State & Local—California (2014 – 2024)
- Ranked by the Best Lawyers in America guide (published by BL Rankings LLC), for Tax Law (2008 – 2025) and Litigation and Controversy – Tax (2011 – 2024)
- Best Lawyers (published by BL Rankings LLC), Lawyer of the Year, Litigation & Controversy – Tax—San Francisco (2013, 2016, 2019 and 2024)
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- Honors & Awards
- Best Lawyers in America, Lawyer of the Year, Tax Law — San Francisco (2012)
- The Legal 500 U.S., Domestic Tax — Leading Lawyer (2013 – 2015), Tax Controversy (2008, 2011 – 2015, 2017) and Taxes: Non-Contentious (2017)
- PLC Which Lawyer?, Tax—San Francisco and Silicon Valley (2007 – 2012)
- Tax Disputes/Controversy Leaders' Guide, International Tax Review (2011)
- World Tax Directory, International Tax Review (2003 – 2008)
- Super Lawyers (2004 – 2021)
- External Publications
- Author of the chapter on Judicial Remedies and co-author of the chapter on Administrative Procedures in California Tax Analysis, a Commerce Clearing House publication.
- Co-author (with Kerne Matsubara), Distinctions Between Unitary and Nonunitary Businesses: A Practical Guide, published by Commerce Clearing House in 2001.
- Firm Publications
- “California Governor Releases 2025 Budget Proposal to Move Banks and Financial Corporations to Single-Sales-Factor Apportionment,” SeeSALT Blog Post, with Zachary Atkins and Jeff Phang, February 20, 2025.
- “Technology Transfer Agreements: An Update on Latest Developments in California,” SeeSALT Blog Post, with Richard Nielsen, February 18, 2025.
- “Technology Transfer Agreements: Latest Developments in California,” Pillsbury Client Alert, with Richard Nielsen, August 26, 2024.
- "California’s 2024-2025 Budget Seeks to Block $1.3 Billion of Refunds for Water’s Edge Taxpayers, Suspend NOL Deductions, and Limit Tax Credit Utilization,” SeeSALT Blog Post, with Carley Roberts, Robert P. Merten III, and Jeff Phang, June 5, 2024.
- “Proposed Initiative to Amend San Francisco Business Taxes,” SeeSALT Blog Post, with Richard Nielsen, May 9, 2024.
- “California Trial Court Denies FTB’s Motion to Vacate and Modify Judgment that Declared Technical Advice Memorandum 2022-01 and FTB Publication 1050 Invalid,” SeeSALT Blog Post, with Carley Roberts and Nolan Kessler, February 15, 2024.
- “California Trial Court Grants Industry Trade Association’s Motion for Summary Adjudication, Declaring Technical Advice Memorandum 2022-01 and FTB Publication 1050 Invalid,” SeeSALT Blog Post, with Carley Roberts and Nolan Kessler, December 20, 2023.
- “California Trial Court Rejects Industry Trade Association's Motion for Summary Judgment Seeking to Declare Technical Advice Memorandum 2022-01 and FTB Publication 1050 Invalid,” SeeSALT Blog Post, with Carley Roberts and Nolan Kessler, September 21, 2023.
- “California Court of Appeal Concludes That a Trust with a Non-California Trustee May Be Subject to Tax on All of Its Gain from the Sale of Stock,” SeeSALT Blog Post, with Annie H. Huang, August 6, 2020
- “California Legislature Passes Governor Newsom's Proposal to Suspend California Net Operating Loss Deductions and Limit Tax Credits during 2020 – 2022,” Pillsbury Client Alert, with Craig A. Becker, Carley Roberts, and Breann Robowski, June 24, 2020
- “Oregon Tax Court Applies Wayfair Retroactively in Telecommunications Tax Case,” SeeSALT Blog Post, March 31, 2020
- “Michigan Alternative Apportionment Formula Victory for Taxpayer,” SeeSALT Blog Post, March 16, 2020
- “‘Interactive’ Website Will Defeat P.L. 86 – 272 Immunity If the MTC Has Its Way,” SeeSALT Blog Post, with Pillsbury SALT, November 11, 2019
- “The California Franchise Tax Board Convenes a Public Meeting on the Gig Economy,” SeeSALT Blog Post, with Pillsbury SALT, October 2, 2019
- “California OTA Rejects FTB’s 0.2 Percent Bright-Line Nexus Standard for Out-Of-State Minority Interest LLC Members,” SeeSALT Blog Post, with Pillsbury SALT, September 9, 2019
- “Four Things You Should Know About the Supreme Court's Decision in Direct Marketing,” with Michael J. Cataldo, Paul T. Casas, Kerne H.O. Matsubara, March 4, 2015
- “United States Supreme Court to Review Ruling in Direct Marketing,” with Michael J. Cataldo, Paul T. Casas, July 22, 2014
- “California Tax Board Provides Guidance on the Broadened Definition of 'Retailer Engaged in Business in This State',” with Annie H. Huang, Paul T. Casas, June 5, 2012
- “Tax Provisions of the 2010 – 2011 California Budget,” with Annie H. Huang, Michael J. Cataldo, October 19, 2010
- “New Jersey Tax Court Decides in Favor of Taxpayer in First Interest Addback Case,” with Annie H. Huang, September 7, 2010
- Recent Speaking Engagements
- “California Tax Trends,” CalTax Annual Meeting, March 2025, Sacramento, CA.
- “Where Is Your Purchaser (Sourcing) and Why is Obtaining More Information of Increasing Importance,” COST SALT Workshop for Technology Companies, August 2024, Cupertino, CA.
- “Substantial and Occasional Developments in Alternative Apportionment for Corporate Income Tax,” California Tax Policy Conference, November 2023, Palm Springs, CA.
- “State Tax Policy: As Deficits Return, Will the Tide Change?” TEI Annual Conference, October 2023, New York, NY.
- “Ask the Experts,” COST State and Local Tax Workshop for the Tech Industry, August 2022, Burlingame, CA.
- “Trends in Corporate Income Tax,” California Tax Policy Conference, November 2021, San Diego, CA.
- “California Department of Tax and Fee Administration – Assessments, Appeals and Litigation,” Western States Petroleum Association Virtual Property Tax and Excise Tax Educational Forum, October 2021, Virtual.
- “Ask the Experts,” COST State and Local Tax Workshop for the Tech Industry, August 2021, Webinar.
- “Significant Litigation Impacting Transactional Taxes,” COST Transactional Tax Webinar, July 2021,
- “Market Based Sourcing: Developing a Multistate Approach,” TEI Chicago Chapter SALT Program, December 2020, Virtual.
- “Market-Based Sourcing Issues in the Southwestern States with a Focus on California,” COST’s Pacific Southwest Regional Tax Webinar, August 2020, Virtual.
- “California Update,” Financial Institutions State Tax (FIST) Coalition 2019, November 2019, Virtual.
- “Ask the Experts” panel, COST State and Local Tax Workshop for the Tech Industry, July 2019, Foster City, CA.
- “Understanding the Concepts of Apportionment & Sourcing,” COST Forum U.S. State and Local Taxes for European Companies, June 2019, London, UK.
- “Income Tax – TCJA and Other SALT Matters,” TEI New England Chapter Meeting, February 2019.
- “Federal Tax Reform – How Have the States Reacted So Far?” COST Pacific Southwest Regional State Tax Seminar, November 2018, Glendale, CA.
- “What’s New at the California Office of Tax Appeals,” COST Pacific Southwest Regional State Tax Seminar, November 2018, Glendale, CA.
- “National Judicial Update and Discussion of State Tax Cases –Including Wayfair,” COST Pacific Southwest Regional State Tax Seminar, November 2018, Glendale, CA.
- “Best Practices for Dispute Resolution at the Formal Appeal and Litigation Levels Using California as a Model,” COST Pacific Southwest Regional State Tax Seminar, November 2018, Glendale, CA.
- “California Update,” Financial Institutions State Tax Coalition Annual Meeting 2018, November 2018, Las Vegas, NV.
- “California and Arizona Updates,” COST 2018 49th Annual Meeting, October 2018, Phoenix, AZ.
- “California’s New Office of Tax Appeals – A Review of its First Year,” COST 49th Annual Meeting, October 2018, Phoenix, AZ.
- “Wayfair, What’s Next?” Pillsbury presentation, July 2018, Webinar
- “Recent State and Local Tax Developments,” 18th Annual Oregon Tax Institute, June 2018, Portland, OR.
- “Ask The Experts,” 2018 COST and OFII Forum on US State and Local Taxes for European Companies, May 2018, London, UK.
- 2018 COST Spring Audit Session, April 2017, Boston, MA.
- “California’s State Board of Equalization is Being Substantially Replaced,” COST 48th Annual Meeting, October 2017, Orlando, FL.
- “Audits – Practices and Tips for Establishing the Best Case for Protest,” – COST Spring Audit Session / Income Tax Conference, April 2017, Chandler, AZ.
- “Recent Developments in Alternative Apportionment, Market-Based Sourcing and Related Issues,” COST California & Pacific Northwest Regional State Tax Seminar, March 2017, San Francisco, CA.
- “Emerging Issues,” California Taxpayers Association Annual Meeting, March 2017, Sacramento, CA.
- “Combined Reporting: New Developments and Have We Strayed From the Original Concept,” National Association of State Bar Tax Sections 37th Annual Meeting, October 2016, San Francisco, C
- “Pitfalls and Opportunities Arising from New Sales Factor Sourcing Regimes,” COST 2016 47th Annual Meeting/Fall Audit Session, October 2016, Las Vegas, NV.
- “California and Arizona Updates,” COST 2016 47th Annual Meeting/Fall Audit Session, October 2016, Las Vegas, NV.
- “Current Developments in State and Local Taxes,” North Bay Tax Directors, June 2016, San Francisco, CA.
- “Defuse the Ticking Time Bombs,” COST 2016 Spring Audit Session/Income Tax Conference, April 2016, Asheville, NC.
- “California and Arizona Update,” COST 2016 Spring Audit Session/Income Tax Conference, April 2016, Asheville, NC.
- “Law & Order: Taxpayer Unit,” 90th Annual California Taxpayers Association Meeting, March 2016, Sacramento, CA.
- “What the ‘L’, Local Taxes,” 22nd Annual Paul J. Hartman State & Local Tax Forum, October 2015, Nashville, TN.
- “California and Arizona Updates,” COST 2015 46th Annual Meeting/Fall Audit Session, October 2015, Chicago, IL.
- “Hidden Taxes and Fees,” COST 2015 46th Annual Meeting/Fall Audit Session, October 2015, Chicago, IL.
- “California and Arizona Update,” COST 2015 Spring Audit Session/Income Tax Conference, April 2015, Memphis, TN.
- “The MTC ALAS Project and the Growing Interest in Transfer Pricing at the State and Local Level,” COST 2015 Spring Audit Session/Income Tax Conference, April 2015, Memphis, TN.
- “Are You Paying Too Much Tax? Drafting Contracts to Minimize Taxes (Including the Potential Impact of International Taxes),” COST 2015 Sales Tax Conference & Audit Session, February 2015, Orlando, FL.
- “Alternative Apportionment Developments,” COST Pacific Southwest Regional State Tax Seminar, February 2015, Phoenix, AZ.
- “Credit & Incentive Influx: Getting and Retaining What You Bargained For,” National Multistate Tax Symposium 2015: Navigating State Taxation in a Global Environment, February 2015.
- “California Update,” Financial Institutions State Tax Coalition Annual Meeting, November 2014.
- “Seeking Apportionment for a Fair Reflection of Business Activity? Which is the Fairest of Them All?” 2014 Annual Meeting of the California Tax Bar & the California Tax Policy Conference, November 2014, Coronado, CA.
- “California and Arizona Update,” COST 2014 45th Annual Meeting/Fall Audit Session, October 2014, Hollywood, FL.
- “Seeking Apportionment for a Fair Reflection of Business Activity? Which is the Fairest of Them All?” 2014 Annual Meeting of the California Tax Bar & the California Tax Policy Conference, November 2014, Coronado, CA.
- “Due Process Has Gotten Its Groove Back: The Re-Emergence of Due Process Challenges,” COST 2014 45th Annual Meeting/Fall Audit Session, October 2014, Hollywood, FL.
- “Latest Developments in California and Other States’ Research and Development Credits,” COST California & Pacific Southwest Regional State Tax Seminar, August 2014, Aliso Viejo, CA
- “Wrap Up & Summary of Key Discussions,” COST California & Pacific Southwest Regional State Tax Seminar, August 2014, Aliso Viejo, CA.
- “California Update,” COST 2014 Spring Audit Session/Income Tax Conference, April 2014, Colorado Springs, CO.
Education
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J.D., San Fernando Valley University, 1975
M.B.A., Taxation, Golden Gate University, 1982
B.A., University of California, Santa Barbara, 1972
Admissions
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California