California 2009-2010 Regular Session Status: To Executive

SB 858 — Sales and use taxes: income and corporation taxes: collection cost recovery fee.

Last action — Chaptered by Secretary of State. Chapter 721, Statutes of 2010.

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

This bill died with 2009-2010 Regular Session. It reached “To Executive” 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This bill is no longer active — its legislative session has ended, so there is no live prognosis.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. Chaptered by Secretary of State. Chapter 721, Statutes of 2010.

  2. Approved by Governor.

  3. Enrolled. To Governor at 11:45 a.m.

  4. Senate concurs in Assembly amendments. (Ayes 27. Noes 7. Page 5249.) To enrollment.

  5. Urgency clause adopted.

  6. In Senate. To unfinished business.

  7. Read third time. Urgency clause adopted. Passed. (Ayes 60. Noes 13. Page 7159.) To Senate.

  8. Read third time. Amended. (Page 7115.) To third reading.

  9. Read second time. To third reading.

  10. Placed on second reading file.

  11. In Assembly. Read first time. Held at Desk.

  12. Read third time. Passed. (Ayes 24. Noes 5. Page 3269.) To Assembly.

  13. Read second time. To third reading.

  14. Placed on second reading file.

  15. Withdrawn from committee.

  16. To Com. on RLS.

  17. From print. May be acted upon on or after February 11.

  18. Introduced. Read first time. To Com. on RLS. for assignment. To print.

Sponsors

  • Committee on Budget and Fiscal Review · Primary

Sponsorship breakdown

Export CSV (upgrade) →

1 sponsors · 0 co-sponsors · 121 not signed on · 4 voted No

Sponsors (1)

  • Committee on Budget and Fiscal Review

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

W/O REF. TO FILE SB858 Committee on B. & F.R. (Ducheny) Urgency Clause

Passed 28 Yea · 7 Nay · 5 Other
Party YeaNayPresentNot Voting
Unaffiliated 26605
Democratic 2000
Republican 0100
Total 28705
% of votes cast 70%18%0%13%
How each member voted (40)
Member Party Vote
Yee — Nay
Cedillo — Yea
Corbett — Yea
Florez — Yea
Lowenthal — Yea
Negrete — Yea
Ducheny — Yea
Harman — Yea
Hollingsworth — Yea
Leno — Yea
Liu — Yea
McLeod — Yea
Runner — Yea
Wyland — Nay
Hancock — Nay
Huff — Not Voting
Oropeza — Not Voting
Price — Yea
Simitian — Yea
Steinberg — Yea
Wiggins — Not Voting
Wolk — Nay
Wright — Yea
Aanestad — Not Voting
Alquist — Yea
Ashburn — Yea
Blakeslee — Not Voting
Kehoe — Yea
Pavley — Yea
Romero — Yea
Walters — Yea
Cogdill — Yea
Emmerson — Yea
Correa — Nay
DeSaulnier — Yea
Dutton — Yea
Denham — Nay
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Nay

Official roll call →

SB 858 B.& F. R. Third Reading Urgency By BLUMENFIELD

Passed 69 Yea · 14 Nay · 7 Other
Party YeaNayPresentNot Voting
Unaffiliated 661107
Democratic 2100
Republican 1200
Total 691407
% of votes cast 77%16%0%8%
How each member voted (90)
Member Party Vote
Hagman — Yea
Evans — Yea
Carter — Yea
Chesbro — Yea
Conway — Yea
Bill — Yea
Fuentes — Yea
Fuller — Yea
Galgiani — Yea
Garrick — Yea
Gilmore — Yea
Charles — Yea
Hall — Yea
Harkey — Yea
Hayashi — Yea
Hill — Yea
De — Yea
La — Yea
Torre — Yea
Fong — Yea
Bonnie — Yea
Lowenthal — Yea
Bass — Yea
Beall — Yea
Cook — Yea
Coto — Yea
Davis — Yea
Huffman — Yea
Jeffries — Yea
Lieu — Yea
Logue — Yea
Mendoza — Yea
Monning — Yea
V. — Yea
Manuel — Yea
Perez — Yea
Salas — Yea
Saldana — Yea
John — Yea
A. — Yea
Perez — Yea
Yamada — Yea
Fletcher — Nay
Audra — Nay
Tom — Not Voting
De — Not Voting
Leon — Not Voting
Portantino — Not Voting
Hernandez — Not Voting
Huber — Nay
Anderson — Nay
Nestande — Yea
Norby — Yea
Ruskin — Yea
Skinner — Yea
Smyth — Yea
Swanson — Yea
Torlakson — Yea
Torrico — Yea
Tran — Nay
Adams — Nay
Ammiano — Not Voting
Block — Yea
Blumenfield — Yea
Bradford — Yea
Brownley — Yea
Buchanan — Yea
Knight — Yea
Ma — Yea
Miller — Nay
Nava — Yea
Nielsen — Yea
Silva — Yea
Solorio — Yea
Torres — Yea
Villines — Nay
Eng — Yea
Feuer — Nay
DeVore — Nay
Furutani — Yea
Gatto — Yea
Beth Gaines — Nay
Bill Berryhill — Yea
Bill Berryhill — Not Voting
Arambula, Joaquin Democratic Yea
Caballero, Anna M. Democratic Nay
Calderon, Lisa Democratic Yea
Jones, Brian W. Republican Yea
Niello, Roger W. Republican Nay
Strickland, Tony Republican Nay

Official roll call →

Senate 3rd Reading SB858 Committee on B. & F.R. (Ducheny)

Passed 25 Yea · 5 Nay · 10 Other
Party YeaNayPresentNot Voting
Unaffiliated 234010
Democratic 2000
Republican 0100
Total 255010
% of votes cast 63%13%0%25%
How each member voted (40)
Member Party Vote
Yee — Yea
Cogdill — Not Voting
Corbett — Yea
Ducheny — Yea
Dutton — Nay
Lowenthal — Yea
Negrete — Yea
Hancock — Yea
Kehoe — Yea
Leno — Yea
Liu — Yea
McLeod — Yea
Alquist — Yea
Ashburn — Nay
Oropeza — Yea
Pavley — Yea
Price — Yea
Romero — Yea
Simitian — Yea
Steinberg — Yea
Wolk — Yea
Wright — Yea
Runner — Not Voting
Huff — Not Voting
Aanestad — Not Voting
Harman — Not Voting
Hollingsworth — Not Voting
Maldonado — Not Voting
Walters — Nay
Wiggins — Not Voting
Wyland — Nay
Cedillo — Yea
Correa — Yea
Cox — Not Voting
DeSaulnier — Yea
Denham — Not Voting
Florez — Yea
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Nay

Official roll call →

Subjects

taxation
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Frequently asked questions

What does SB 858 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 SB 858?
SB 858 is sponsored by Committee on Budget and Fiscal Review.
What is the current status of SB 858?
This bill died with 2009-2010 Regular Session. It reached “To Executive” 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 SB 858?
Track SB 858 free on One Click Politics — get push/email alerts when it moves.

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