Franchise Tax BO Payments: California Explained

November 28, 2025 |Tax Preparation Services

If you operate restaurants or franchise locations in California, chances are your bank activity includes cryptic entries during tax time.

One of the most common is “FRANCHISE TAX BO PAYMENTS.” Owners often panic—Was I hacked? Did a vendor pull cash? when in reality, this line almost always means an ACH debit to the California Franchise Tax Board (FTB) for a state tax payment you (or your preparer/portal) authorized.

This quick, simple guide explains what the descriptor means, why it looks strange, when it appears, how to verify it, and how to record it properly—especially if you’re running multi-unit books.

The short version

**“**FRANCHISE TAX BO PAYMENTS” = money leaving your account for a California FTB tax payment.
“BO” is just a bank-shortened “Board.”
You’ll usually also see PPD (the ACH entry class for consumer payments) and a company ID tied to FTB.
It’s the debit counterpart to the refund descriptor “FRANCHISE TAX BD CASTTAXRFD” (that one is a credit when FTB deposits your CA refund).

Why the descriptor looks weird

Banks display pieces of the ACH file your payment system sends to FTB (or FTB pulls from your account). That file carries fields like company name/ID, SEC code (e.g., PPD), and a description. Different banks truncate the label, which is why you get “FRANCHISE TAX BO” instead of the full Franchise Tax Board.

When you see “FRANCHISE TAX BO PAYMENTS”

Quarterly estimates for CA personal or corporate income/franchise tax.
Extension payments (April/September).
Balance-due payments after you file your return.
Payment plan drafts if you arranged installments with FTB.
Prior-year adjustments where you authorized an additional debit.

Tip: Add the expected draft dates to your 13-week cash forecast so payroll + rent + taxes don’t collide in the same week.

How to confirm it’s legitimate

Match the amount and date to a payment you scheduled (Web Pay, your tax software, or your CPA’s e-file authorization).
Log into your FTB / tax portal to confirm it cleared for the correct year and account.
Look for an email or receipt from the day you scheduled the debit (subject lines often include “Web Pay” or “EFT”).
Still unsure? Call the number on ftb.ca.gov (not from a random search result) and ask them to confirm the payment by bank account and date.

If you never filed in California, or the amount is totally unexpected, pause and contact FTB and your bank—don’t assume it’s normal.

How to record it in your books

For franchisees/operating entities

Account: Taxes & licenses – state income/franchise tax.
If the business paid a personal (owner) CA tax: book it to Owner’s draw/Distribution rather than expense—it isn’t a deductible company tax.
Sales tax vs. income/franchise tax: keep them separate. Sales tax belongs in Sales tax payable; this entry is income/franchise tax.

For franchisors/management companies

Enterprise-level CA taxes (UBT/local where applicable) post to the appropriate Income tax expense accounts by entity.
If you manage a brand fund or co-op, do not run CA income tax through that fund; brand/ad funds should only carry brand-program costs per the FDD and governing documents.

For multi-unit rollups

Post at the entity level that owes the tax.
If you centralized cash management, record an intercompany due-to/due-from entry so the right entity bears the expense.

FAQ

How is this different from “FRANCHISE TAX BD CASTTAXRFD”?

BO PAYMENTS = debit (you paid FTB). CASTTAXRFD = credit (FTB refunded you).

Is this federal or state?

State (California). Federal ACH descriptors typically look like IRS TREAS 310 for refunds or USATAX/IRS EFTPS for payments.

Our controller booked it as “sales tax.” Is that wrong?

Yes—this is an income/franchise tax. Move it out of sales-tax buckets to keep return prep clean.

Can I reverse it if it was a mistake?

ACH reversals are time-sensitive and not guaranteed. Call your bank and FTB immediately. In practice, FTB will often advise resolving by amended return or credit on account.

Prevent surprises next quarter

Calendar the big three: estimates, extensions, and balance due.
Use alerts: Set bank alerts for any ACH debits over a threshold; you’ll spot unexpected drafts the same day.
Lock approvals: If your CPA schedules payments, require a same-day email confirmation with the amount/date/tax year.
Tie to cash: Park tax events on your 13-week forecast so rent, payroll, and vendor peaks don’t overlap the draft.

When to call for help

You don’t owe California but see a debit.
The amount doesn’t match what you authorized.
You’re unsure which entity should bear the expense in a multi-entity structure.
You need to clean up prior-year postings so your return is accurate (and defensible).

Get a quick, numbers-first checkup for free

If tax drafts keep catching you off guard—or if multi-state filings plus platform deposits are muddying your close—let’s pressure-test your finance stack.

Get a free Profit & Cash-Flow Analysis by our experts at QMK Consulting. We’ll review your last 90 days, map tax events into a 13-week cash view, and give you a simple 30-day action plan.

About us

QMK Consulting is an accounting firm in New York City serving clients nationwide, specializing in franchise accounting and restaurant accounting. We implement T+7 closes, airtight POS→processor→bank tie-outs, and calm, on-time state & federal filings—so your statements never have to be a mystery again.

The post is educational only—please consult your tax advisor for advice tailored to your situation.

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