California 2009-2010 Regular Session Status: Passed Assembly

AB 1618 — Sales and use taxes: income and corporation taxes: collection cost recovery fee.

Last action — Read third time. Urgency clause refused adoption. (Ayes 26. Noes 10. Page 5256.)

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

This bill died with 2009-2010 Regular Session. It reached “Passed Assembly” 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This bill is no longer active — its legislative session has ended, so there is no live prognosis.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

(1) The Sales and Use Tax Law provides that every person storing, using, or otherwise consuming in this state tangible personal property purchased from a retailer is liable for use tax, and must pay the use tax to the State Board of Equalization, unless that person has paid the use tax to a retailer registered to collect the tax. That law requires a person selling tangible personal property for storage, use, or other consumption in this state to register with, and to obtain a seller's permit or certification of registration-use tax from, the State Board of Equalization. For taxable years beginning on or after January 1, 2003, and on or before December 31, 2009, a person not otherwise registered with the board could make an irrevocable election to report qualified use tax, as defined, on that person's income tax return, and the Franchise Tax Board was required to revise the income tax returns to allow a person to report and remit qualified use tax to it and to remit the qualified use tax collected to the board. This bill would authorize an eligible person to make an irrevocable election to report qualified use tax, as defined, on that person's income tax return, for taxable years beginning on and after January 1, 2010, and would require the Franchise Tax Board to allow a person to report and remit qualified use taxes to it and to remit the qualified use taxes collected to the board, as provided. (2) Existing law imposes a penalty on a taxpayer subject to the Corporation Tax Law with an understatement of tax, as defined, in excess of $1,000,000 in an amount equal to 20% of that understatement, except as specified. This bill would, for each taxable year beginning on or after January 1, 2010, revise those provisions to impose a penalty for understatement of tax for each taxable year that exceeds the greater of $1,000,000 or 20% of the tax shown on an original return or shown on an amended return filed on or before the original or extended due date of the return for the taxable year, as provided. (3) Existing law allows individual and corporate taxpayers to utilize net operating losses and carryovers and carrybacks of those losses for purposes of offsetting their individual and corporate tax liabilities. Existing law, for net operating losses incurred in taxable years beginning on or after January 1, 2008, provides a carryover period of 20 years and allows net operating losses attributable to taxable years beginning on or after January 1, 2011, to be carrybacks to each of the preceding 2 taxable years, as provided. Existing law disallows the deduction for net operating losses and net operating loss carryovers in the 2008 and 2009 taxable years for a taxpayer with business income of $500,000 or more and extends the carryover period for those net operating losses, thus allowing the taxpayer to have the same number of years to utilize the deduction as it would have had if the disallowance for 2008 and 2009 had not occurred. This bill would extend the disallowance of the net operating loss deduction and carryovers, and the carryover extension, to the 2010 and 2011 taxable years for a taxpayer with income of $300,000 or more. This bill would disallow net operating loss carrybacks for any net operating losses attributable to taxable years beginning before January 1, 2013, but would allow net operating losses attributable to taxable years beginning on or after January 1, 2013, to be carrybacks to each of the preceding 2 taxable years, as provided. This bill would, under the Corporation Tax Law, specify that the above provisions do not apply to a taxpayer that ceased to do business or has a final taxable year ending prior to August 28, 2008, that sold or transferred substantially all of its assets resulting in a gain on sale during a taxable year ending prior to August 28, 2008, for which the gain could be offset with existing net operating loss deductions and the sale or transfer occurred pursuant to a reorganization under federal bankruptcy provisions. The bill would also specify that an amended tax return claiming net operating loss deductions allowed pursuant to those provisions shall be treated as a timely filed original return. (4) The Corporation Tax Law imposes taxes measured by income and, in the case of a business with income derived from or attributable to sources both within and without this state, apportions the income between this state and other states and foreign countries in accordance with a specified 4-factor formula based on the property, payroll, and sales within and without this state, except that in the case of an apportioning trade or business that derives more than 50% of its gross business receipts from conducting one or more qualified business activities, as defined, business income is apportioned in accordance with a specified 3-factor formula. That law, for taxable years beginning on or after January 1, 2011, allows a taxpayer to have that income apportioned in accordance with a single sales factor formula, except as provided, pursuant to an irrevocable annual election, as specified. That law also provides that sales of tangible and intangible personal property are in this state in accordance with specified criteria. This bill would, for taxable years beginning or after January 1, 2011, revise provisions for determining whether sales of services and intangibles occur in this state for purposes of taxpayers who elect to have their business income apportioned in accordance with the single sales factor formula, as provided, and for purposes of the 4-factor formula if the single sales factor formula election is not allowed. (5) Existing law requires the payment of taxes, fees, and surcharges that are administered by the State Board of Equalization under the provisions of the Sales and Use Tax Law, Use Fuel Tax Law, Private Railroad Car Tax Law, Cigarette and Tobacco Products Tax Law, Alcoholic Beverage Tax Law, Timber Yield Tax Law, Energy Resources Surcharge Law, Emergency Telephone Users Surcharge Act, Hazardous Substances Tax Law, Integrated Waste Management Fee Law, Oil Spill Response, Prevention, and Administration Fees Law, Underground Storage Tank Maintenance Fee Law, Fee Collection Procedures Law, and Diesel Fuel Tax Law, as prescribed. This bill would require the payment of a collection cost recovery fee if a person fails to pay a tax, fee, or surcharge under the laws stated above, and the State Board of Equalization has mailed the person a demand notice, on or after January 1, 2011, that explains that the failure to pay the amount due may result in collection action, including the imposition of the collection cost recovery fee. This bill would authorize the collection cost recovery fee to be collected and deposited in the same manner in which the tax, fee, or surcharge that the person failed to pay is collected and deposited. This bill would deposit the collection cost recovery fee in the same manner as the revenues derived from the tax, fee, or surcharge imposed by the laws stated above, which deposit those revenues into various funds, some of which are continuously appropriated. Because the bill would provide additional amounts payable from a continuously appropriated fund, the bill would make an appropriation. (6) This bill would require the State Board of Equalization to relieve a person from paying the collection cost recovery fee if that person files a statement under penalty of perjury, setting forth the reasonable cause for not paying the tax, fee, or surcharge, to the State Board of Equalization. Because this bill would expand the scope of the existing crime of perjury, it would impose a state-mandated local program. 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. (7) This bill would declare that it is to take effect immediately as an urgency statute.

Bill Text

Action History

  1. Read third time. Urgency clause refused adoption. (Ayes 26. Noes 10. Page 5256.)

  2. Joint Rule 10.5 suspended. (Page 5222.)

  3. Senate Rule 29.3 suspended.

  4. Read second time. To third reading.

  5. Read third time, amended. To second reading.

  6. Read second time. To third reading.

  7. Withdrawn from committee. Ordered placed on second reading file.

  8. Referred to Com. on RLS.

  9. In Senate. Read first time. To Com. on RLS. for assignment.

  10. Read third time, passed, and to Senate. (Ayes 45. Noes 7. Page 4803.)

  11. Read second time. To third reading.

  12. Read second time and amended. Ordered returned to second reading.

  13. From committee: Amend, and do pass as amended. (Ayes 14. Noes 0.) (April 15).

  14. Joint Rule 62(a), file notice suspended. (Page 4592.)

  15. Referred to Com. on BUDGET.

  16. From printer. May be heard in committee February 11.

  17. Read first time. To print.

Sponsors

  • Committee on Budget · Primary

Sponsorship breakdown

Export CSV (upgrade) →

1 sponsors · 0 co-sponsors · 121 not signed on · 2 voted No

Sponsors (1)

  • Committee on Budget

Co-sponsors (0)

None.

Not signed on (121)

121 members have not signed on to this bill.

Show all 121 →

"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.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

Assembly 2nd Reading AB1618 Committee on BUDGET (Blumenfield) Urgency Clause

Failed 27 Yea · 10 Nay · 3 Other
Party YeaNayPresentNot Voting
Unaffiliated 25903
Democratic 2000
Republican 0100
Total 271003
% of votes cast 68%25%0%8%
How each member voted (40)
Member Party Vote
Yee — Nay
Cedillo — Yea
Corbett — Yea
Florez — Yea
Ducheny — Yea
Dutton — Yea
Harman — Yea
Lowenthal — Yea
Kehoe — Yea
Liu — Yea
Negrete — Yea
Runner — Yea
Cogdill — Nay
Hancock — Nay
Huff — Nay
Blakeslee — Nay
Oropeza — Not Voting
Pavley — Yea
Romero — Yea
Simitian — Yea
Steinberg — Yea
Wiggins — Not Voting
Wolk — Nay
Aanestad — Not Voting
Alquist — Yea
Ashburn — Yea
Hollingsworth — Yea
Leno — Yea
McLeod — Yea
Price — Yea
Walters — Yea
Wright — Yea
Wyland — Nay
Emmerson — Yea
Correa — Nay
DeSaulnier — Yea
Denham — Nay
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Nay

Official roll call →

AB 1618 BUDGET Assembly Third Reading By BLUMENFIELD

Passed 54 Yea · 7 Nay · 30 Other
Party YeaNayPresentNot Voting
Unaffiliated 517027
Democratic 2001
Republican 1002
Total 547030
% of votes cast 59%8%0%33%
How each member voted (91)
Member Party Vote
Hagman — Not Voting
V. — Yea
Carter — Yea
Eng — Yea
Feuer — Yea
Furutani — Yea
Galgiani — Yea
Hall — Yea
Chesbro — Yea
Hayashi — Yea
Hill — Yea
Charles — Yea
De — Yea
La — Yea
Torre — Yea
De — Yea
Leon — Yea
Fong — Yea
Bonnie — Yea
Lowenthal — Yea
Beall — Yea
Mendoza — Yea
Monning — Yea
Manuel — Yea
Perez — Yea
Salas — Yea
Saldana — Yea
John — Yea
A. — Yea
Perez — Yea
Conway — Not Voting
Bill — Not Voting
Tom — Not Voting
Fletcher — Not Voting
Portantino — Not Voting
Audra — Not Voting
Garrick — Not Voting
Gilmore — Not Voting
Cook — Not Voting
Huber — Not Voting
Huffman — Not Voting
Blakeslee — Not Voting
Knight — Nay
Miller — Not Voting
Norby — Not Voting
Ruskin — Yea
Silva — Not Voting
Smyth — Not Voting
Solorio — Yea
Torlakson — Yea
Torres — Yea
Tran — Not Voting
Adams — Not Voting
Ammiano — Yea
Anderson — Nay
Bass — Yea
Block — Yea
Blumenfield — Not Voting
Bradford — Yea
Brownley — Yea
Buchanan — Yea
Harkey — Nay
Hernandez — Yea
Jeffries — Nay
Lieu — Yea
Logue — Nay
Ma — Yea
Nava — Yea
Nestande — Not Voting
Nielsen — Not Voting
Skinner — Yea
Swanson — Yea
Torrico — Yea
Villines — Not Voting
Emmerson — Not Voting
Coto — Yea
Evans — Yea
Davis — Yea
DeVore — Not Voting
Yamada — Yea
Fuentes — Yea
Fuller — Nay
Beth Gaines — Nay
Bill Berryhill — Not Voting
Bill Berryhill — Not Voting
Arambula, Joaquin Democratic Yea
Caballero, Anna M. Democratic Not Voting
Calderon, Lisa Democratic Yea
Jones, Brian W. Republican Yea
Niello, Roger W. Republican Not Voting
Strickland, Tony Republican Not Voting

Official roll call →

Do pass as amended.

Passed 16 Yea · 0 Nay · 14 Other
Party YeaNayPresentNot Voting
Unaffiliated 140013
Democratic 2000
Republican 0001
Total 160014
% of votes cast 53%0%0%47%
How each member voted (30)
Member Party Vote
Carter — Yea
Evans — Not Voting
Fuller — Not Voting
Furutani — Yea
Chesbro — Yea
De — Yea
La — Yea
Torre — Yea
Cook — Not Voting
Bill — Not Voting
Huffman — Yea
Beall — Yea
Ruskin — Yea
Swanson — Yea
Gilmore — Not Voting
Jeffries — Not Voting
Nestande — Not Voting
Silva — Not Voting
Adams — Not Voting
Blumenfield — Yea
Brownley — Yea
Buchanan — Yea
Harkey — Not Voting
Nielsen — Not Voting
Emmerson — Not Voting
Feuer — Yea
Bill Berryhill — Not Voting
Arambula, Joaquin Democratic Yea
Caballero, Anna M. Democratic Yea
Jones, Brian W. Republican Not Voting

Official roll call →

Subjects

taxation
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Frequently asked questions

What does AB 1618 do?
(1) The Sales and Use Tax Law provides that every person storing, using, or otherwise consuming in this state tangible personal property purchased from a retailer is liable for use tax, and must pay the use tax to the State Board of Equalization, unless that person has paid the use tax to a retailer registered to collect the tax. That law requires a person selling tangible personal property for storage, use, or other consumption in this state to register with, and to obtain a seller's permit or certification of registration-use tax from, the State Board of Equalization. For taxable years beginning on or after January 1, 2003, and on or before December 31, 2009, a person not otherwise registered with the board could make an irrevocable election to report qualified use tax, as defined, on that person's income tax return, and the Franchise Tax Board was required to revise the income tax returns to allow a person to report and remit qualified use tax to it and to remit the qualified use tax collected to the board. This bill would authorize an eligible person to make an irrevocable election to report qualified use tax, as defined, on that person's income tax return, for taxable years beginning on and after January 1, 2010, and would require the Franchise Tax Board to allow a person to report and remit qualified use taxes to it and to remit the qualified use taxes collected to the board, as provided. (2) Existing law imposes a penalty on a taxpayer subject to the Corporation Tax Law with an understatement of tax, as defined, in excess of $1,000,000 in an amount equal to 20% of that understatement, except as specified. This bill would, for each taxable year beginning on or after January 1, 2010, revise those provisions to impose a penalty for understatement of tax for each taxable year that exceeds the greater of $1,000,000 or 20% of the tax shown on an original return or shown on an amended return filed on or before the original or extended due date of the return for the taxable year, as provided. (3) Existing law allows individual and corporate taxpayers to utilize net operating losses and carryovers and carrybacks of those losses for purposes of offsetting their individual and corporate tax liabilities. Existing law, for net operating losses incurred in taxable years beginning on or after January 1, 2008, provides a carryover period of 20 years and allows net operating losses attributable to taxable years beginning on or after January 1, 2011, to be carrybacks to each of the preceding 2 taxable years, as provided. Existing law disallows the deduction for net operating losses and net operating loss carryovers in the 2008 and 2009 taxable years for a taxpayer with business income of $500,000 or more and extends the carryover period for those net operating losses, thus allowing the taxpayer to have the same number of years to utilize the deduction as it would have had if the disallowance for 2008 and 2009 had not occurred. This bill would extend the disallowance of the net operating loss deduction and carryovers, and the carryover extension, to the 2010 and 2011 taxable years for a taxpayer with income of $300,000 or more. This bill would disallow net operating loss carrybacks for any net operating losses attributable to taxable years beginning before January 1, 2013, but would allow net operating losses attributable to taxable years beginning on or after January 1, 2013, to be carrybacks to each of the preceding 2 taxable years, as provided. This bill would, under the Corporation Tax Law, specify that the above provisions do not apply to a taxpayer that ceased to do business or has a final taxable year ending prior to August 28, 2008, that sold or transferred substantially all of its assets resulting in a gain on sale during a taxable year ending prior to August 28, 2008, for which the gain could be offset with existing net operating loss deductions and the sale or transfer occurred pursuant to a reorganization under federal bankruptcy provisions. The bill would also specify that an amended tax return claiming net operating loss deductions allowed pursuant to those provisions shall be treated as a timely filed original return. (4) The Corporation Tax Law imposes taxes measured by income and, in the case of a business with income derived from or attributable to sources both within and without this state, apportions the income between this state and other states and foreign countries in accordance with a specified 4-factor formula based on the property, payroll, and sales within and without this state, except that in the case of an apportioning trade or business that derives more than 50% of its gross business receipts from conducting one or more qualified business activities, as defined, business income is apportioned in accordance with a specified 3-factor formula. That law, for taxable years beginning on or after January 1, 2011, allows a taxpayer to have that income apportioned in accordance with a single sales factor formula, except as provided, pursuant to an irrevocable annual election, as specified. That law also provides that sales of tangible and intangible personal property are in this state in accordance with specified criteria. This bill would, for taxable years beginning or after January 1, 2011, revise provisions for determining whether sales of services and intangibles occur in this state for purposes of taxpayers who elect to have their business income apportioned in accordance with the single sales factor formula, as provided, and for purposes of the 4-factor formula if the single sales factor formula election is not allowed. (5) Existing law requires the payment of taxes, fees, and surcharges that are administered by the State Board of Equalization under the provisions of the Sales and Use Tax Law, Use Fuel Tax Law, Private Railroad Car Tax Law, Cigarette and Tobacco Products Tax Law, Alcoholic Beverage Tax Law, Timber Yield Tax Law, Energy Resources Surcharge Law, Emergency Telephone Users Surcharge Act, Hazardous Substances Tax Law, Integrated Waste Management Fee Law, Oil Spill Response, Prevention, and Administration Fees Law, Underground Storage Tank Maintenance Fee Law, Fee Collection Procedures Law, and Diesel Fuel Tax Law, as prescribed. This bill would require the payment of a collection cost recovery fee if a person fails to pay a tax, fee, or surcharge under the laws stated above, and the State Board of Equalization has mailed the person a demand notice, on or after January 1, 2011, that explains that the failure to pay the amount due may result in collection action, including the imposition of the collection cost recovery fee. This bill would authorize the collection cost recovery fee to be collected and deposited in the same manner in which the tax, fee, or surcharge that the person failed to pay is collected and deposited. This bill would deposit the collection cost recovery fee in the same manner as the revenues derived from the tax, fee, or surcharge imposed by the laws stated above, which deposit those revenues into various funds, some of which are continuously appropriated. Because the bill would provide additional amounts payable from a continuously appropriated fund, the bill would make an appropriation. (6) This bill would require the State Board of Equalization to relieve a person from paying the collection cost recovery fee if that person files a statement under penalty of perjury, setting forth the reasonable cause for not paying the tax, fee, or surcharge, to the State Board of Equalization. Because this bill would expand the scope of the existing crime of perjury, it would impose a state-mandated local program. 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. (7) This bill would declare that it is to take effect immediately as an urgency statute.
Who sponsors AB 1618?
AB 1618 is sponsored by Committee on Budget.
What is the current status of AB 1618?
This bill died with 2009-2010 Regular Session. It reached “Passed Assembly” 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 1618?
Track AB 1618 free on One Click Politics — get push/email alerts when it moves.

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