Bill Text: CA AB1546 | 2009-2010 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Taxation: limited partnerships: income tax: dependent
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 544, Statutes of 2009. [AB1546 Detail]
Download: California-2009-AB1546-Amended.html
Bill Title: Taxation: limited partnerships: income tax: dependent
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 544, Statutes of 2009. [AB1546 Detail]
Download: California-2009-AB1546-Amended.html
BILL NUMBER: AB 1546 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 30, 2009
AMENDED IN ASSEMBLY MAY 14, 2009
INTRODUCED BY Committee on Revenue and Taxation (Charles Calderon
(Chair), Beall, Coto, Ma, Portantino, and Saldana)
MARCH 5, 2009
An act to amend Section 15902.09 of the Corporations Code, and to
amend Sections 19136.1 and 19591 17054,
19136, 19136.1, 19136.8, 19591, 25128, and 25128.5 of the
Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1546, as amended, Committee on Revenue and Taxation. Taxation:
limited partnerships: income tax: estimated
payments. payments: dependent exemption credit:
corporation tax apportionment.
Existing
(1) The Personal Income Tax Law and the Corporation Tax Law impose
a penalty for underpayment of estimated income tax. Existing law
provides for a credit based on taxes withheld on wages, in modified
conformity with federal income tax laws, against the estimated tax
payments, including a provision that "an equal part" of that amount
is deemed paid on each due date for a taxable year.
This bill would substitute "the applicable percentage," as
defined, for "an equal part" under this provision, as provided.
This bill would also make technical, nonsubstantive changes to
provisions of personal and corporation income tax laws relating to
penalties, dependent exemption credit, and apportionment of income.
(2) Existing law sets forth rules
of organization and governance for limited partnerships. Current law
allows a canceled domestic limited partnership to revive by
accompanying a certificate of revival, filed with the Secretary of
State, with specified information confirmed by the Franchise Tax
Board, including confirmation that all taxes owed by the partnership
have been paid to the Franchise Tax Board.
This bill would require the partnership, on or after January 1,
2010, to accompany the certificate of revival with written
confirmation, obtained from the Franchise Tax Board, that all
required tax returns have been filed by the partnership. This bill
would further authorize the Franchise Tax Board to assess a
specialized tax service fee of $100 for a limited partnership revival
confirmation letter request, until January 1, 2011, after which the
amount of the fee shall be set by regulation.
Existing income tax laws require specified individuals to pay
estimated income taxes in installments and impose additional
liability for underpayments.
This bill would adjust the amount of those installments under
specified circumstances.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 15902.09 of the Corporations Code is amended to
read:
15902.09. (a) A domestic limited partnership whose certificate of
limited partnership has been canceled pursuant to Section 15902.03
may be revived by filing with, and on a form prescribed by, the
Secretary of State a certificate of revival. The certificate of
revival shall be accompanied by written confirmation by the Franchise
Tax Board that all of the following have occurred:
(1) All of the following have been paid to the Franchise Tax
Board:
(A) The annual tax due under Section 17935 of the Revenue and
Taxation Code.
(B) All fees and penalties, and interest thereof, for each year
for which the domestic limited partnership failed to pay such annual
tax, including each year between the cancellation of its certificate
of limited partnership and its revival.
(2) All required tax returns have been filed, including returns
for each taxable year between the cancellation of its certificate of
limited partnership and its revival.
(b) The certificate of revival shall set forth all of the
following:
(1) The name of the limited partnership at the time its
certificate of limited partnership was cancelled
canceled , and if the name is not available at the time of
revival, the name under which the limited partnership is to be
revived.
(2) The date of filing of the original certificate of limited
partnership.
(3) The address of the limited partnership's designated office.
(4) The name and address of the initial agent for service of
process in accordance with paragraph (1) of subdivision (d) of
Section 15901.16.
(5) A statement that the certificate of revival is filed by one or
more general partners of the limited partnership authorized to
execute and file the certificate of revival to revive the limited
partnership.
(6) The Secretary of State's file number for the original limited
partnership.
(7) The name and address of each general partner.
(8) Any other matters the general partner or partners executing
the certificate of revival determine to include therein.
(c) The certificate of revival should be deemed to be an amendment
to the certificate of limited partnership, and the limited
partnership shall not be required to take any further action to amend
its certificate of limited partnership pursuant to Section 15902.02
with respect to the matter set forth in the certificate of revival.
(d) Upon the filing of the certificate of revival, the limited
partnership shall be revived with the same force and effect as if the
certificate of limited partnership had not been canceled pursuant to
Section 15902.03. The revival shall validate all contracts, acts,
matters, and things made, done, and performed by the limited
partnership, its partners, employees, and agents following the time
its certificate of limited partnership was canceled pursuant to
Section 15902.03 with the same force and effect and all intents and
purposes as if the certificate of limited partnership had remained in
full force and effect. This provision shall apply provided that
third parties are relying on the acts of the partnership, its
partners, employees, and agents. All real and personal property, and
all rights and interests, that belong to a limited partnership at the
time its certificate of limited partnership was cancelled
canceled pursuant to Section 15902.03 or that
were acquired by the limited partnership following the cancellation
of the certificate of limited partnership, that were not disposed of
prior to the time of its revival, shall be vested in the limited
partnership after its revival as fully as if they were held by the
limited partnership at, and during the time after, as the case may
be, the time the certificate of limited partnership was
cancelled canceled . After its revival, the
limited partnership and its partners shall have all of the same
liability for contracts, acts, matters, and things made, done, or
performed in the limited partnership's name and on behalf of its
partners, employees, and agents, as the limited partnership and its
partners would have had if the limited partnership's certificate of
limited partnership had at all times remained in full force and
effect.
(e) The amendments made to this section by the act adding this
subdivision shall apply to written confirmations made by the
Franchise Tax Board on or after January 1, 2010.
SEC. 2. Section 17054 of the Revenue
and Taxation Code is amended to read:
17054. In the case of individuals, the following credits for
personal exemption may be deducted from the tax imposed under Section
17041 or 17048, less any increases imposed under paragraph (1) of
subdivision (d) or paragraph (1) of subdivision (e), or both, of
Section 17560.
(a) In the case of a single individual, a head of household, or a
married individual making a separate return, a credit of fifty-two
dollars ($52).
(b) In the case of a surviving spouse (as defined in Section
17046), or a husband and wife making a joint return, a credit of one
hundred four dollars ($104). If one spouse was a resident for the
entire taxable year and the other spouse was a nonresident for all or
any portion of the taxable year, the personal exemption shall be
divided equally.
(c) In addition to any other credit provided in this section, in
the case of an individual who is 65 years of age or over by the end
of the taxable year, a credit of fifty-two dollars ($52).
(d) (1) A credit of two hundred twenty-seven dollars ($227) for
each dependent (as defined in Section 17056) for whom an exemption is
allowable under Section 151(c) of the Internal Revenue Code,
relating to additional exemption for dependents. The credit allowed
under this subdivision for taxable years beginning on or after
January 1, 1999, shall not be adjusted pursuant to subdivision (i)
for any taxable year beginning before January 1, 2000.
(2) The credit allowed under paragraph (1) may not be denied on
the basis that the identification number of the dependent, as defined
in Section 17056, for whom an exemption is allowable under Section
151(c) of the Internal Revenue Code, relating to additional exemption
for dependents, is not included on the return claiming the credit.
(3) (A) For taxable years beginning on or after January 1, 2009,
the credit allowed under paragraph (1) for each dependent shall be
equal to the credit allowed under subdivision (a). This subparagraph
shall cease to be operative on for taxable
years beginning on or after January 1, 2011, unless the
Director of Finance makes the notification pursuant to Section 99040
of the Government Code, in which case this subparagraph shall cease
to be operative on for taxable years
beginning on or after January 1, 2013.
(B) Commencing on the date For taxable
years that subparagraph (A) ceases to be operative, the credit
allowed under paragraph (1) for each dependent shall be equal to the
amount that would be allowed if subparagraph (A) had never been
operative.
(e) A credit for personal exemption of fifty-two dollars ($52) for
the taxpayer if he or she is blind at the end of his or her taxable
year.
(f) A credit for personal exemption of fifty-two dollars ($52) for
the spouse of the taxpayer if a separate return is made by the
taxpayer, and if the spouse is blind and, for the calendar year in
which the taxable year of the taxpayer begins, has no gross income
and is not the dependent of another taxpayer.
(g) For the purposes of this section, an individual is blind only
if either (1) his or her central visual acuity does not exceed 20/200
in the better eye with correcting lenses, or (2) his or her visual
acuity is greater than 20/200 but is accompanied by a limitation in
the fields of vision such that the widest diameter of the visual
field subtends an angle no greater than 20 degrees.
(h) In the case of an individual with respect to whom a credit
under this section is allowable to another taxpayer for a taxable
year beginning in the calendar year in which the individual's taxable
year begins, the credit amount applicable to that individual for
that individual's taxable year is zero.
(i) For each taxable year beginning on or after January 1, 1989,
the Franchise Tax Board shall compute the credits prescribed in this
section. That computation shall be made as follows:
(1) The California Department of Industrial Relations shall
transmit annually to the Franchise Tax Board the percentage change in
the California Consumer Price Index for all items from June of the
prior calendar year to June of the current calendar year, no later
than August 1 of the current calendar year.
(2) The Franchise Tax Board shall add 100 percent to the
percentage change figure which is furnished to them pursuant to
paragraph (1), and divide the result by 100.
(3) The Franchise Tax Board shall multiply the immediately
preceding taxable year credits by the inflation adjustment factor
determined in paragraph (2), and round off the resulting products to
the nearest one dollar ($1).
(4) In computing the credits pursuant to this subdivision, the
credit provided in subdivision (b) shall be twice the credit provided
in subdivision (a).
SEC. 3. Section 19136 o f the
Revenue and Taxation Code is amended to read:
19136. (a) Section 6654 of the Internal Revenue Code, relating to
failure by an individual to pay estimated income tax, shall apply,
except as otherwise provided.
(b) Section 6654(a)(1) of the Internal Revenue Code is modified to
refer to the rate determined under Section 19521 in lieu of Section
6621 of the Internal Revenue Code.
(c) (1) Section 6654(e)(1) of the Internal Revenue Code, relating
to exceptions where the tax is a small amount, does not apply.
(2) No addition to the tax shall be imposed under this section if
the tax imposed under Section 17041 or 17048 and the tax imposed
under Section 17062 for the preceding taxable year, minus the sum of
any credits against the tax provided by Part 10 (commencing with
Section 17001) or this part, or the tax computed under Section 17041
or 17048 upon the estimated income for the taxable year, minus the
sum of any credits against the tax provided by Part 10 (commencing
with Section 17001) or this part, is less than five hundred dollars
($500), except in the case of a separate return filed by a married
person the amount shall be less than two hundred fifty dollars
($250).
(d) Section 6654(f) of the Internal Revenue Code does not apply
and for purposes of this section the term "tax" means the tax imposed
under Section 17041 or 17048 and the tax imposed under Section 17062
less any credits against the tax provided by Part 10 (commencing
with Section 17001) or this part, other than the credit provided by
subdivision (a) of Section 19002.
(e) (1) The credit for tax withheld on
wages, as specified in Section 6654(g) of the Internal Revenue Code,
shall be the credit allowed under subdivision (a) of Section 19002.
(2) (A) Section 6654(g)(1) of the Internal Revenue Code is
modified by substituting the phrase "the applicable percentage" for
the phrase "an equal part."
(B) For purposes of this paragraph, "applicable percentage" means
the percentage amount prescribed under Section 6654(d)(1)(A) of the
Internal Revenue Code, as modified by paragraph (1) of subdivision
(a) of Section 19136.1.
(f) This section shall apply to a nonresident individual.
(g) (1) No addition to tax shall be imposed under this section to
the extent that the underpayment was created or increased by any
provision of law that is chaptered during and operative for the
taxable year of the underpayment.
(2) Notwithstanding Section 18415, this section applies to
penalties imposed under this section on and after January 1, 2005.
(h) The amendments made to this section by the act adding
this subdivision Section 5 of Chapter 305 of the
Statutes of 2008 shall apply to taxable years beginning on or
after January 1, 2009.
(i) The amendment made to this section by the act adding this
subdivision shall apply to amounts withheld on wages beginning on or
after January 1, 2009.
SEC. 2. SEC. 4. Section 19136.1 of
the Revenue and Taxation Code is amended to read:
19136.1. (a) (1) Section 6654(d)(1)(A) of the Internal Revenue
Code is modified to provide that in lieu of the required installments
specified in that section, the amount of required installments shall
instead be as follows:
(A) For the 1st and 2nd required installments, 30 percent of the
required annual payment.
(B) For the 3rd and 4th required installments, 20 percent of the
required annual payment.
(2) Section 6654(d)(2)(C)(ii) of the Internal Revenue Code,
relating to applicable percentage, is modified by substituting "27"
for "22.5," "54" for "45," and "72" for "67.5."
(b) This section, including paragraph (2) of subdivision (a),
shall apply to installments due for each taxable year beginning on or
after January 1, 2009.
SEC. 5. Section 19136.8 of the
Revenue and Taxation Code , as added by Section 5 of
Chapter 10 of the 3rd Extraordinary Session of the Statutes of 2009,
is repealed.
19136.8. (a) No addition to tax shall be made under Section 19136
with respect to any underpayment of an installment to the extent
that the underpayment was created or increased by the disallowance of
a credit under subdivision (f) of Section 17053.80.
(b) No addition to tax shall be made under Section 19142 with
respect to any underpayment of an installment to the extent that the
underpayment was created or increased by the disallowance of a credit
under subdivision (f) of Section 23623.
(c) The Franchise Tax Board shall adopt procedures, forms, and
instructions necessary to implement this section in a reasonable
manner.
SEC. 6. Section 19136.8 of the
Revenue and Taxation Code , as added by Section 5 of
Chapter 17 of the 3rd Extraordinary Session of the Statutes of 2009,
is amended to read:
19136.8. (a) No addition to tax shall be made under Section 19136
with respect to any underpayment of an installment to the extent
that the underpayment was created or increased by the disallowance of
a credit under subdivision (f) (g) of
Section 17053.80.
(b) No addition to tax shall be made under Section 19142 with
respect to any underpayment of an installment to the extent that the
underpayment was created or increased by the disallowance of a credit
under subdivision (f) (g) of Section
23623.
(c) The Franchise Tax Board shall adopt procedures, forms, and
instructions necessary to implement this section in a reasonable
manner.
SEC. 3. SEC. 7. Section 19591 of the
Revenue and Taxation Code is amended to read:
19591. (a) Specialized tax services fees shall be imposed upon
the following services provided by the board:
(1) Installment payment programs.
(2) Expedited services for:
(A) Corporation revivor requests.
(B) Tax clearance certificate requests.
(C) Tax-exempt status requests.
(D) Limited partnership revival confirmation letter requests.
(b) (1) For periods on or after the effective date of this section
and prior to January 1, 2006, the Franchise Tax Board shall publish
by notice a schedule of specialized tax services fees to be imposed,
which notice shall be exempt from the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. The amounts of these fees under this paragraph
shall be calculated in the same general manner as required under
paragraph (2).
(2) Commencing on January 1, 2006, the amount of the specialized
tax services fees shall be established by the board through
regulations adopted pursuant to Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, and
shall be established in the manner and in the amounts necessary to
reimburse the board for the costs of administering the specialized
services, including the board's direct and indirect costs for
providing specialized tax services.
(3) For periods on or after the effective date of this section,
and prior to January 1, 2011, the amount of the specialized tax
service fee for limited partnership revival confirmation letter
requests shall be one hundred dollars ($100). Commencing on January
1, 2011, the special tax service fee for limited partnership revival
confirmation letter requests shall be calculated in the same general
matter as required under paragraph (2).
SEC. 8. Section 25128 of the Revenue
and Taxation Code is amended to read:
25128. (a) Notwithstanding Section 38006, all business income
shall be apportioned to this state by multiplying the business income
by a fraction, the numerator of which is the property factor plus
the payroll factor plus twice the sales factor, and the denominator
of which is four, except as provided in subdivision (b) or (c).
(b) If an apportioning trade or business derives more than 50
percent of its "gross business receipts" from conducting one or more
qualified business activities, all business income of the
apportioning trade or business shall be apportioned to this state by
multiplying business income by a fraction, the numerator of which is
the property factor plus the payroll factor plus the sales factor,
and the denominator of which is three.
(c) For purposes of this section, a "qualified business activity"
means the following:
(1) An agricultural business activity.
(2) An extractive business activity.
(3) A savings and loan activity.
(4) A banking or financial business activity.
(d) For purposes of this section:
(1) "Gross business receipts" means gross receipts described in
subdivision (e) or (f) of Section 25120 (other than gross
receipts from sales or other transactions within an apportioning
trade or business between members of a group of corporations whose
income and apportionment factors are required to be included in a
combined report under Section 25101, limited, if applicable, by
Section 25110), whether or not the receipts are excluded from the
sales factor by operation of Section 25137.
(2) "Agricultural business activity" means activities relating to
any stock, dairy, poultry, fruit, furbearing animal, or truck farm,
plantation, ranch, nursery, or range. "Agricultural business activity"
also includes activities relating to cultivating the soil or raising
or harvesting any agricultural or horticultural commodity,
including, but not limited to, the raising, shearing, feeding, caring
for, training, or management of animals on a farm as well as the
handling, drying, packing, grading, or storing on a farm any
agricultural or horticultural commodity in its unmanufactured state,
but only if the owner, tenant, or operator of the farm regularly
produces more than one-half of the commodity so treated.
(3) "Extractive business activity" means activities relating to
the production, refining, or processing of oil, natural gas, or
mineral ore.
(4) "Savings and loan activity" means any activities performed by
savings and loan associations or savings banks which have been
chartered by federal or state law.
(5) "Banking or financial business activity" means activities
attributable to dealings in money or moneyed capital in substantial
competition with the business of national banks.
(6) "Apportioning trade or business" means a distinct trade or
business whose business income is required to be apportioned under
Sections 25101 and 25120, limited, if applicable, by Section 25110,
using the same denominator for each of the applicable payroll,
property, and sales factors.
(7) Paragraph (4) of subdivision (c) shall apply only if the
Franchise Tax Board adopts the Proposed Multistate Tax Commission
Formula for the Uniform Apportionment of Net Income from Financial
Institutions, or its substantial equivalent, and shall become
operative upon the same operative date as the adopted formula.
(8) In any case where the income and apportionment factors of two
or more savings associations or corporations are required to be
included in a combined report under Section 25101, limited, if
applicable, by Section 25110, both of the following shall apply:
(A) The application of the more than 50 percent test of
subdivision (b) shall be made with respect to the "gross business
receipts" of the entire apportioning trade or business of the group.
(B) The entire business income of the group shall be apportioned
in accordance with either subdivision (a) or (b), or subdivision
(b) of Section 25128.5, as applicable.
SEC. 9. Section 25128.5 of the
Revenue and Taxation Code , as added by Section 11 of
Chapter 10 of the 3rd Extraordinary Session of the Statutes of 2009,
is repealed.
25128.5. (a) Notwithstanding Section 38006, any apportioning
trade or business, other than an apportioning trade or business
described in subdivision (b) of Section 25128, may make an
irrevocable annual election on an original timely filed return, in
the manner and form prescribed by the Franchise Tax Board to
apportion its income in accordance with this section, and not in
accordance with Section 25128.
(b) Notwithstanding Section 38006, for taxable years beginning on
or after January 1, 2011, all business income shall be apportioned to
this state by multiplying the business income by the sales factor.
(c) The Franchise Tax Board is authorized to issue regulations
necessary or appropriate regarding the making of an election under
this section, including regulations that are consistent with rules
prescribed for making an election under Section 25113.
SEC. 10. Section 25128.5 of the
Revenue and Taxation Code , as added by Section 11 of
Chapter 17 of the 3rd Extraordinary Session of the Statutes of 2009,
is amended to read:
25128.5. (a) Notwithstanding Section 38006, for taxable
years beginning on or after January 1, 2011, any apportioning
trade or business, other than an apportioning trade or business
described in subdivision (b) of Section 25128, may make an
irrevocable annual election on an original timely filed return, in
the manner and form prescribed by the Franchise Tax Board to
apportion its income in accordance with this section, and not in
accordance with Section 25128.
(b) Notwithstanding Section 38006, for taxable years beginning on
or after January 1, 2011, all business income of an
apportioning trade or business making an election described in
subdivision (a) shall be apportioned to this state by
multiplying the business income by the sales factor.
(c) The Franchise Tax Board is authorized to issue regulations
necessary or appropriate regarding the making of an election under
this section, including regulations that are consistent with rules
prescribed for making an election under Section 25113.
