This post is about the California Statement of Information. This includes who has to file, what properties are reported on the Statement of Information, and how to complete the form.
Is it time for you to file your California Statement of Information? Read this blog post to find out more!
What is a statement of information?
A Statement Of Information (SOI) is a list of all the properties you own located in California. The document must be filed every year with the county assessor where you own property in the State of California. You complete the Statement of Information as of the property owner. Here are all the things that the Statement of Information (SOI) is used for:
- Entering the new property into the system
- Transferring ownership of an existing property to another person.
- Asking for a reassessment by the assessor’s office on your property
- The assessor needs information in order to determine the current market value of your property. This is a standard function for local government agencies and is not limited to the County tax assessor.
- The assessor’s office updates the tax rolls in their county, and they use the information from your statement for this update.
- The update of the tax rolls is used for generating your property tax bill
The Department of Finance (DOF) also uses the statement’s information to allocate funds to cities, counties, schools, and other government agencies. The State Controller’s Office also uses the data from the Statement Of Information in order to prepare an annual report to be given to each California Legislator.
Who has to file the California Statement of Information?
According to the California Franchise Tax Board’s website, it is mandatory for all California residents who own rental property in the state, including non-resident owners. However, some protections are available for non-residents.
If the property is located in a county with rent control, certain rules apply. Here is more information about Non-Resident Owners: http://www.ftb.ca.gov/forms/1115.pdf
Do non-residents have to file their SOI if they pay rent to a non-resident landlord?
If the property owner is a non-resident, then as long as the property is located in a county that does not have rent control, then the rental income must be reported. In counties that do have rent control, the owner can ask to have their rental income reported as long as they provide the rental information to the local assessor. http://www.ftb.ca.gov/faq_RentControlOwners.
What properties are reported on the California Statement of Information?
The exact information that the SOI should include depends on your situation. The information reportable depends on who owns the property and under what title. If you have a single-family residence, including all the property information in the Statement of Information is not required.
However, if you have both residential and real estate investment properties, every property that you own must be reported.
The information reported on a Statement of Information may include:
- Property address
- Property owner information
- Realtor information if you are using a licensed real estate professional to sell your property or assist with listing your property for sale.
- If you own or lease commercial property, you must include your business address.
- Information about rental properties is required if you own more than six residential rental properties located in California.
- In addition, any commercial property you own must be reported.
- Information about limited liability companies (LLCs) is not mandatory for LLC owners as C corporations are not eligible for the STAR program and therefore are not required to report their LLCs.
California LLC Statement of Information
If you own a California limited liability company (LLC), also known as an S-corporation, and maintain a single-member LLC or a multi-member LLC, you are required to file a form of California Statement of Information.
The property information that should be reported on this registration document includes the ownership information of the real estate. If you own multiple properties, the California Statement of Information must be filed for each property.
California Corporation Statement of Information
Like an LLC Statement of Information, the Corporation Statement of Information is also required for corporations that own residential or investment property in the State of California. The reportable information includes details about the ownership of the property.
California Partnership Statement of Information
If you are a partner in a California partnership and you own properties in California, you are required to file the Partnership Statement of Information. The properties should be reported based on ownership share.
First Statement of Information
The first Statement of Information that an individual, corporation, or partnership is required to file with the county assessor and send to the Franchise Tax Board is due by July 1 in the year following the year in which the property was acquired.
For example, a taxpayer bought a rental property on January 1st, 2013. They will then have to complete a Statement of Information by July 1st, 2014, and forward it to both the county assessor and Franchise Tax on or before July 1st, 2014.
Ongoing Statements of Information
After the first Statement of Information, the annual Statement of Information that is required to be filed with the county assessor and Franchise Tax Board by July 1st is due each year on or before that date every year.
California LLC Statement of Information fee
The fee to form an LLC Statement of Information is $250. If the company owns only one property, it is not required to complete the SOI. However, if you own more than one property, the fee for each additional property will be $50.
Statement of Information Form
Filed statement of information with your county assessor should be sent to Franchise Tax Board in Form BOE-101S: Statement of Information: Multifamily, Commercial, and Industrial Real Property – SOI. You can find more information about the form at the following website: http://www.ftb.ca.gov/forms/boe101s_mfci_soi_form.pdf.
To print your statement and file it online, you will need to register with the California Secretary of State website. If you are not sure how to do that, follow this link: https://www.sos.ca.gov/business-programs/statements-information/how-to-file. Secretary of State statement of information online filing system is free.
Sample Statement of Information Requirements
- If you own both residential and investment properties (like a single-family residence and a duplex that you rent out), you have to report on the SOI every property that belongs to you.
- When you are determining what information needs to be included in your statement of information, remember to think about all the different types of property that are owned by a partnership or corporation. For example, if your partnership owns a commercial office building as well as two residential properties, these three properties should be reported on your SOI.
- If you own property but are not in the real estate business, do not report on the SOI.
- It is important to keep your contact information on file up-to-date because of the requirement that you send your SOI to Franchise Tax Board and the county assessor each year by July 1st. If your address changes after the beginning of a tax year, you can wait until you file your next SOI to update your address (and other contact information).
- If you are filing a new SOI, the reportable information will be different than if you are filing an SOI for the same properties at a later date. The reportable information will have changed when you file a new SOI because of changes that may have occurred in the ownership of your property or in the use of your property.
Preferred method of filing
I. The original paper form must be mailed or hand-delivered to the Franchise Tax Board (FTB) and your county tax collector. In order to do this, you may want to send copies of your form to the FTB completely filled out and send your original in blank or with a simple letter.
The FTB recommends that all Forms BOE-101S be sent by registered or certified mail, where available, as proof of receipt by the FTB is required if audited.
II. Electronic filing is also an option. Taxpayers can transmit the SOI electronically to the FTB and their County Assessor. There are a number of third-party software vendors that can assist taxpayers with this process, including Taxware and Jackson Hewitt.
The FTB requires that taxpayers using software use FTB Electronic File Application Software (EFAS) because it has been specifically designed for real property statements of information (SOI).
III. In addition, most counties use an Electronic Filing Management Program (EFMP) to process SOIs; however, not all agencies have adopted EFMP. Taxpayers can determine whether their agency accepts electronic filings by contacting their County Assessor’s office.
The FTB does not charge a fee for electronic filing, but the Assessors’ offices may charge a fee to cover the costs of using their EFMP. Assessors may also charge a fee to cover the costs of using other third-party software. Taxes will still be assessed and collected, but you may not receive a statement of information if your county does not use an EFMP or another third-party software.
For more information about the requirements for filing an SOI, visit the Franchise Tax Board’s website at http://www.ftb.ca.gov/forms/boe101s_mfci_soi_form.
When is my LLC Statement of Information due?
To determine when your LLC Statement of Information is due, you must first figure out what type of business you have. For an LLC that starts up, the due date for the SOI is based on your fiscal year-end.
For example, if your LLC began business on May 10th, 2014, and it uses a calendar year as its fiscal year-end, your SOI will be due by July 1st, 2015.
If your LLC is already in existence and you have not submitted your SOI yet, you should know that failure to file your SOI within 60 days of the due date will create an IRS-issued automatic Federal Tax lien on all property owned by you.
To avoid this penalty, the LLC can act on its own to file its Statement of Information. However, the requirement for paying the FTB a $250 filing fee can make this option less appealing.
In addition, the IRS may impose additional penalties as well.
Common penalties and fees
The formal process to remove the lien is called a “request for release of the federal tax lien.” You do not have to take this step if the IRS does it for you.
You can check if your sales tax return was accepted by filing your sales tax return search results at a website like http://www.businessesforsales.com/ or by calling the California State Board of Equalization at (800) 400-7115.
You can also simply contact the California Board of Equalization and ask if your business sales tax return was accepted and sent out. They will tell you if it was or not.
Penalties when you file a tax return late or don’t file
The penalty for failing to file your tax return within the deadline is $260 + interest.
If you pay the taxes and then later file a late return, it is a $260 penalty + interest.
Statement of Information reminders
The penalty for failure to file your Statement of Information within 60 days of the due date is a $500 penalty + interest.
Failure to Pay Penalty
The penalty on failure to pay is $300 + 1.5% per month until paid, up to a maximum of 25% maximum. You may be charged this penalty if you file your sales tax return late, you didn’t pay enough taxes in full and on time, or if you don’t pay the amount shown due on your notice.
Business Tax Return for New Businesses
This is the tax return used when starting a new business. You must complete Form BOE-100 and file it along with the $150 fee. As stated above, this tax return will also be called the “statement of information” by some county assessors or tax collectors. However, there will not be a penalty for the non-filing of this tax return.
Weekly reporting of information
When business owners or managers get into the habit of filing their income tax and business tax returns each week, they will likely end up paying less in taxes each year. When you report your income on a weekly basis, you become better organized with your finances, which may result in better financial decisions.
Additionally, and most importantly, this form of filing is highly recommended as it is the easiest to set up and use.
California statement of information FAQ
Q. What is an automatic federal tax lien?
A. It is a lien the IRS automatically places on all of your assets in California when you fail to file your SOI
Q. What does the IRS do with all of the money that it receives from me?
A. File a Statement of Information, you’ll be sent a bill for $250 + interest. If you don’t pay, the IRS can place a lien on all of your assets in California and charge you additional penalties.
Q. What does the IRS do with my money after it receives my filing fee?
A. The IRS sends a receipt and adds it to your account. After that, you get a bill for $250 + interest.
Q. What is a notice from the IRS?
A. A notice is an official letter or email from the IRS reminding you to file your Statement of Information, pay your taxes or penalties on time, or other official communications from the Revenue Service as well as California state tax laws.
Q. Can I use a third-party e file service?
A. The IRS requires all taxpayers to file their tax returns with the Taxpayer Advocate Service (TAS). All e filing services are not accepted by TAS.
Q. What is the difference between an e filing service and a secure e-file service?
A. For a business, this is not an issue. As long as the e-filing software meets IRS requirements, it can file using either one.
A business only needs to know that the IRS will not accept a third-party e filing service to file an LLC Statement of Information.
Q. How can I find out if my Statement of Information was received by the IRS?
A. The IRS will send you a letter or email within 30 days of receiving your Statement of Information to let you know if there is anything wrong with your filing.
Q. How do I know when my business sales tax return is accepted?
A. You can check if your sales tax return was accepted by filing your sales tax return search results at a website like http://www.businessesforsales.com/ or by calling the California State Board of Equalization at (800) 400-7115.
Q. What can I use to pay my taxes to the SBOE?
A. You can use any method accepted by the IRS, including credit cards, debit cards, checks, money orders, or cashier’s checks.
Owning a business can be confusing, especially when it comes to money and taxes. The best way to stay organized is to file your forms on time and in the correct manner. Even though you are a small business owner, you are still expected to file your income tax and sales tax form each year.
To meet these requirements, you can fill out a statement of information for your LLC every year.