Bill Text: CA AB405 | 2015-2016 | Regular Session | Introduced

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Bill Title: State Board of Equalization: administration: interest.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2016-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB405 Detail]

Download: California-2015-AB405-Introduced.html

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BILL NUMBER: AB 405	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Brough

                        FEBRUARY 19, 2015

   An act to amend Section 6591.5 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 405, as introduced, Brough. State Board of Equalization:
administration: interest.
   The Sales and Use Tax Law, and other laws by reference to that
law, provide that interest is paid by taxpayers and feepayers with
respect to underpayments of various taxes, surcharges, and fees at a
modified adjusted rate per annum, as defined by reference to a
specified federal statute, and that interest is paid to taxpayers and
feepayers with respect to overpayments of various taxes, surcharges,
and fees as determined in accordance with a specified federal
statute, which requires that the rate paid on overpayments be based
on the rate of 13-week treasury bills, as specified.
   This bill would revise the definition of "modified adjusted rate
per annum," which would thereby require that interest on overpayments
be determined in the same manner as interest on underpayments is now
determined.
   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 6591.5 of the Revenue and Taxation Code is
amended to read: 
   6591.5.  (a) (1) For interest required to be paid to the state
upon underpayments of tax to the state, " modified adjusted rate per
annum" means the adjusted annual rate established pursuant to
subdivision (c), plus three percentage points.
   (2) For interest required to be paid by the state upon
overpayments of tax, "modified adjusted rate per annum" means the
adjusted annual rate established pursuant to subdivision (d).
   (b) "Modified adjusted rate per month, or fraction thereof" means
the modified adjusted rate per annum divided by 12.
   (c) The 
    6591.5.    (a)     "Modified
adjusted  rate  established for interest to be paid upon
underpayments of tax shall be   per annum" means the
rate  determined in accordance with the provisions of Section
 6621   6621(a)(2)  of the Internal Revenue
Code  ,  which  establish  establishes
 the underpayment  rate, except   rate
under  that  the determination specified in 
 code, plus three percentage points, except its reference to
 Section 6621(b) of the Internal Revenue Code  , and the
  determination therein,  shall be modified to be
determined semiannually as follows:
   (1) The rate for January shall apply for the following July 1 to
December 31, inclusive.
   (2) The rate for July shall apply for the following January 1 to
June 30, inclusive. 
   (d) (1) Except as provided in paragraph (2), the rate established
for interest to be paid by the state upon overpayments of tax shall
be equal to the bond equivalent rate of 13-week treasury bills
auctioned, rounded to the nearest full percent (or if a multiple of
one-half of 1 percent, the rate shall be increased to the next
highest full percent), as follows:  
   (A) The bond equivalent rate of 13-week treasury bills established
at the first auction held during the month of January shall apply
for the following July 1 to December 31, inclusive. 

   (B) The bond equivalent rate of 13-week treasury bills established
at the first auction held during the month of July shall apply for
the following January 1 to June 30, inclusive.  
   (2) For the period July 1, 1991, through June 30, 1992, the rate
to be paid by the state upon overpayments of tax shall be equal to
the bond equivalent rate of 13-week treasury bills established at the
auction held on July 1, 1991, rounded to the nearest full percent
(or if a multiple of one-half of 1 percent, the rate shall be
increased to the next highest full percent).  
   (e)  
   (b) "Modified adjusted rate per month, or fraction thereof" means
the modified adjusted rate per annum divided by 12. 
    (c)  For purposes of this part, and any other provision
of law referencing this method of computation, in computing the
amount of any interest required to be paid by the state or by the
taxpayer, or any other amount determined by reference to that amount
of interest, that interest and that amount shall be computed as
simple interest, not compound interest.