Bill Text: CA AB832 | 2011-2012 | Regular Session | Amended

---

Bill Title: Property taxation: software.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-02-01 - Died pursuant to Art. IV, Sec. 10(c) of the Constitution. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB832 Detail]

Download: California-2011-AB832-Amended.html

---

BILL NUMBER: AB 832	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JANUARY 17, 2012
	AMENDED IN ASSEMBLY  MAY 26, 2011
	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Ammiano

                        FEBRUARY 17, 2011

   An act  to add Section 995.3 to the Revenue and Taxation
Code,   relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 832, as amended, Ammiano. Property taxation:  storage
media for computer programs.   software. 
   Existing law requires storage media for computer programs to be
valued on the 1972 lien date and thereafter as if there were no
computer program on the media except basic operational programs, and
otherwise prohibits the valuation of computer programs for the
purpose of property taxation.  Existing law defines basic
operational programs to mean, for purposes of the taxation of storage
media for computer programs, a computer program that is fundamental
and necessary to the functioning of a computer, and that is a part of
an operating system that consists of the control program elements of
that system. Existing regulations of the State Board of Equalization
provide that a program is included in the sale or lease price of
computer equipment if, among other things, the equipment and the
program are sold or leased at a single price, and authorizes the
county assessor, in valuing computer equipment that is sold or leased
at a single price, lacking evidence to the contrary, to regard the
total amount charged as indicative of the value of taxable tangible
property. Existing regulations require a person claiming that a
single price sale or lease includes charges for nontaxable programs,
to identify the nontaxable programs and supply specified information
to enable the county assessor to make an informed judgment concerning
the proper value to be ascribed to taxable and nontaxable programs.

   This bill  generally would codify a portion of a
regulation of the State Board of Equalization, and also would require
a person claiming that a single price sale or lease includes charges
for nontaxable programs or services to prove, by clear and
convincing evidence, the existence of nontaxable programs or services
by supplying sales price, costs, or other information regarding the
nontaxable programs and services   would state the
intent of the Legislature to enact legislation creating a standard
for the fair and reasonable valuation of software embedded in
business personal property, as provided  .
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    It is the intent of the Legislature to
enact   legislation codifying a standard for the fair and
reasonable valuation of software embedded in business personal
property resulting from an interested parties process lead by the
State Board of Equalization and that includes the business community
and county assessors.  
  SECTION 1.    Section 995.3 is added to the
Revenue and Taxation Code, to read:
   995.3.  (a) The term "basic operational program" refers to a
"control program" as defined in Section 995.2 that is included in the
sale or lease price of the computer equipment. A program is included
in the sale or lease price of the computer equipment if either of
the following are met:
   (1) The equipment and the program are sold or leased at a single
price.
   (2) The purchase or lease documents set forth separate prices for
the equipment and the program, but the program may not be accepted or
rejected at the option of the customer.
   (b) In valuing computer equipment that is sold or leased at a
single price not segregated between taxable property and nontaxable
programs as defined in Section 995.2, the county assessor, lacking
evidence to the contrary, may regard the total amount charged as
indicative of the value of taxable tangible personal property.
   (c) A person claiming that a single price sale or lease includes
charges for nontaxable programs or services shall have the burden of
proving, by clear and convincing evidence, the existence of
nontaxable programs or services by supplying sales price, costs, or
other information regarding the nontaxable programs or services,
including, but not limited to, a recognized State Board of
Equalization valuation approach, technique, or method, that will
enable the assessor to make an informed judgment concerning the
proper value to be ascribed to taxable and nontaxable components of
the property.