California 2023-2024 Regular Session Status: In Committee 1 D cosponsors

AB 1105 — Personal Income Tax Law: Corporation Tax Law: sale of net operating losses.

Last action — From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Assembly
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2023-2024 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

The Personal Income Tax Law and the Corporation Tax Law, in modified conformity with federal income tax laws, allow various deductions in computing the income that is subject to the taxes imposed by those laws, including a deduction for a net operating loss, as specified. This bill would allow a startup innovator, as defined, to sell a net operating loss to an unrelated taxpayer, except as provided. The bill would require the sale price of a net operating loss to be at least 80% of the value of the net operating loss being transferred, and would limit a startup innovator to selling no more than $20,000,000 worth of net operating losses in the aggregate, as provided. The bill would provide that a net operating loss sold by a startup innovator would retain the attributes it had in the hands of the seller, including any carryback or carryforward attributes. The bill would allow a purchaser of a net operating loss to apply the net operating loss for taxable years beginning on or after January 1, 2024. The bill would require a startup innovator to certify under penalty of perjury that proceeds received from the sale of a net operating loss are used for specified purposes. By expanding the crime of perjury, the bill would establish a state-mandated local program. The bill would repeal these provisions as of January 1, 2029. The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally define "gross income" as income from whatever source derived, except as specifically excluded. Those laws also provide various exclusions from gross income. This bill would, for taxable years beginning on or after January 1, 2024, and before January 1, 2029, exclude from gross income any amount received by a startup innovator for the sale of a net operating loss. Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would take effect immediately as a tax levy.

Bill Text

Action History

  1. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

  2. Died pursuant to Art. IV, Sec. 10(c) of the Constitution.

  3. In committee: Set, final hearing. Held under submission.

  4. In committee: Set, second hearing. Referred to REV. & TAX. suspense file.

  5. Re-referred to Com. on REV. & TAX.

  6. From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

  7. In committee: Set, first hearing. Hearing canceled at the request of author.

  8. Re-referred to Com. on REV. & TAX.

  9. From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

  10. Re-referred to Com. on REV. & TAX.

  11. From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

  12. Referred to Com. on REV. & TAX.

  13. From printer. May be heard in committee March 18.

  14. Read first time. To print.

Sponsors

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 121 not signed on

Sponsors (1)

Co-sponsors (0)

None.

Not signed on (121)

121 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Subjects

taxation
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Frequently asked questions

What does AB 1105 do?
The Personal Income Tax Law and the Corporation Tax Law, in modified conformity with federal income tax laws, allow various deductions in computing the income that is subject to the taxes imposed by those laws, including a deduction for a net operating loss, as specified. This bill would allow a startup innovator, as defined, to sell a net operating loss to an unrelated taxpayer, except as provided. The bill would require the sale price of a net operating loss to be at least 80% of the value of the net operating loss being transferred, and would limit a startup innovator to selling no more than $20,000,000 worth of net operating losses in the aggregate, as provided. The bill would provide that a net operating loss sold by a startup innovator would retain the attributes it had in the hands of the seller, including any carryback or carryforward attributes. The bill would allow a purchaser of a net operating loss to apply the net operating loss for taxable years beginning on or after January 1, 2024. The bill would require a startup innovator to certify under penalty of perjury that proceeds received from the sale of a net operating loss are used for specified purposes. By expanding the crime of perjury, the bill would establish a state-mandated local program. The bill would repeal these provisions as of January 1, 2029. The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally define "gross income" as income from whatever source derived, except as specifically excluded. Those laws also provide various exclusions from gross income. This bill would, for taxable years beginning on or after January 1, 2024, and before January 1, 2029, exclude from gross income any amount received by a startup innovator for the sale of a net operating loss. Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would take effect immediately as a tax levy.
Who sponsors AB 1105?
AB 1105 is sponsored by Petrie-Norris, Cottie (Democratic).
What is the current status of AB 1105?
This bill died with 2023-2024 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track AB 1105?
Track AB 1105 free on One Click Politics — get push/email alerts when it moves.

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Last checked for changes 3 months ago · updated continuously

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