Revenue and Taxation

Enacted legislation significant to revenue and taxation included SB 663 (Migden) clarifying existing law that prohibits a controlled foreign corporation from excluding part of its income from the water’s edge combined report; SB 1249 (Alquist) removing the annual information factor adjustment on the minimum tax contribution for the California Fund for Senior Citizens; SB 1341 (Cedillo) extending the sales and use tax exemption for sales of certain items by thrift stores to assist individuals with HIV disease or AIDS; SB 1374 (Cedillo) extending the sunset date on the current law that allows the Franchise Tax Board to provide information to tax officials of any city in California which assists cities to more effectively collect outstanding business license taxes; SB 1449 (Migden) establishing a penalty for knowingly collecting sales tax reimbursement and failing to timely remit that sales tax reimbursement to the Board of Equalization; SB 1827 (Migden) requiring registered domestic partners to file personal income tax returns, as either (a) married filing joint or (b) married filing separate; AB 385 (Lieber) allowing local agencies to exempt persons receiving supplemental security income, regardless of age, from paying qualified special taxes; AB 1282 (Mullin) extending the availability of the Employer Child Care Program Credit and Employer Child Care Contribution Credit; AB 1418 (J. Horton) requiring public disclosure of the largest tax delinquencies; AB 1798 (Berg) and AB 2735 (Nava) providing tax relief to those counties which were declared disasters from December 2005 to June 2006; AB 1809 (Assembly Budget Committee) enacting the Budget Trailer Bill on taxation; AB 1890 (Mountjoy) increasing, from three years to five years, the time frame within which a property owner may transfer the base-year value of property damaged or destroyed in a Governor-declared disaster to a replacement property; AB 2239 (Emmerson) allowing an owner to present evidence to rebut the presumption that a vehicle purchase out of California, but brought into this state within 12 months of its purchase, is subject to California use tax; AB 2341 (Villines) providing that the minimum tax will not be imposed against certain business entities in limited circumstances; AB 2533 (Leno) providing an exemption from Sales and Use Tax to original works of art leased for 35 years or more from one nonprofit organization to another, or leased by a state or local government; and AB 2831 (Ridley Thomas) extending and amending exiting law to allow credits against the tax imposed on insurers or under the personal income and corporation tax laws for specific investments with a Community Development Financial Institution.

Vetoed legislation of note included AB 675 (Klehs) requiring specified corporations to provide the Franchise Tax Board with an annual reconciliation of financial statement income or loss to net income or loss for tax reporting purposes; AB 926 (Chu) substituting a $10,000 maximum penalty for the existing $2,500 cap on the penalty for failure to report a change of ownership statement for property other than property eligible for a homeowners’ exemption; and AB 1614 (Ruskin) amending the limited liability companies minimum tax to apply to income derived from, or attributable to, this state.