AB 3372 — Taxation: administration: earnings withholding: water's edge elections.

Summary

Existing law allows the Franchise Tax Board, by notice, to require any person, officer, department of the state, or political subdivision or agency of the state, a city organized under a freeholder's charter, or a political body not a subdivision or agency of the state, to withhold the amount of any income tax, interest, or penalties due from a taxpayer, or the amount representing income tax due from an employer or person who has failed to withhold, from any payments due or becoming due to the taxpayer, employer, or person. Existing law allows that notice to be served personally or by first-class mail. This bill would additionally allow that notice to be served by electronic transmission or other electronic technology, as provided. The bill would also allow any notice or document required to be served or provided in connection with the notice to withhold to be served personally, by first-class mail, or by electronic transmission or other electronic technology. Existing law, the Wage Garnishment Law, among other things, allows the Franchise Tax Board to issue an earnings withholding order to collect any liability under the Personal Income Tax Law or Corporation Tax Law. The Wage Garnishment Law requires service of an earnings withholding order for taxes or of any other notice or document required in connection to that order to be made by first-class mail or served personally. Existing law requires any employer who is served with an earnings withholding order to, among other things, deliver to the person from whom the income tax is sought to be collected a copy of the earnings withholding order and to complete the employer's return provided by the Franchise Tax Board and return by first-class mail. This bill would allow the Franchise Tax Board under the Wage Garnishment Law to serve earnings withholding orders for taxes and any other notice or document required to be served or provided in connection with an earnings withholding order for taxes to government and private employers by electronic transmission or other electronic technology upon consent of the party served. The bill would allow the Franchise Tax Board to receive the employer's return by electronic transmission or other electronic technology. The Corporation Tax Law imposes on every corporation doing business in the state, as defined, a tax according to or measured by net income and, in the case of a corporation 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 single sales formula based on the 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. The Corporation Tax Law, for taxable years beginning on or after January 1, 2003, for purposes of determining its income derived from or attributable to sources within this state, allows corporations to make a statutory election as to whether their income is determined on a "water's-edge" basis or on a worldwide unitary basis. Under existing law, the election to report income on a water's-edge basis is made by contract between the taxpayer and the Franchise Tax Board for an initial term of 84 months, except as specified, and the water's edge election is effective only if every member of the self-assessed combined reporting group that is subject to tax under the Corporation Tax Law makes the election, except as specified. This bill would provide, if a unitary corporation not incorporated in the United States that is not itself subject to taxation under the Corporation Tax Law in the year for which the valid water's-edge election is made, but subsequently becomes subject to taxation under the Corporation Tax Law solely due to it becoming engaged in business in this state in a taxable year beginning on or after January 1, 2021, that corporation is deemed to have elected with the other members of the unitary combined reporting group.

Bill Text

• Chaptered 09/29/20 - Chaptered Current pdf September 29, 2020
• Enrolled 09/01/20 - Enrolled pdf September 01, 2020
• Amended 07/22/20 - Amended Senate pdf July 22, 2020
• Amended 05/11/20 - Amended Assembly pdf May 11, 2020
• Introduced 03/16/20 - Introduced pdf March 16, 2020
• AB3372 View text html

Action History

1. September 29, 2020

   Chaptered by Secretary of State - Chapter 297, Statutes of 2020.

2. September 29, 2020

   Approved by the Governor.

3. September 11, 2020

   Enrolled and presented to the Governor at 3 p.m.

4. August 30, 2020

   Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 75. Noes 0. Page 5331.).

5. August 28, 2020

   In Assembly. Concurrence in Senate amendments pending.

6. August 28, 2020

   Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0. Page 4377.).

7. August 14, 2020

   Read second time. Ordered to Consent Calendar.

8. August 13, 2020

   From committee: Be ordered to second reading file pursuant to Senate Rule 28.8 and ordered to Consent Calendar.

9. July 30, 2020

   From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 7. Noes 0.) (July 29). Re-referred to Com. on APPR.

10. July 22, 2020

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

11. June 23, 2020

    Referred to Com. on GOV. & F.

12. June 09, 2020

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

13. June 08, 2020

    Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 4732.)

14. June 03, 2020

    Read second time. Ordered to Consent Calendar.

15. June 02, 2020

    From committee: Do pass. To Consent Calendar. (Ayes 18. Noes 0.) (June 2).

16. May 18, 2020

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 11. Noes 0.) (May 18). Re-referred to Com. on APPR.

17. May 12, 2020

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

18. May 11, 2020

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

19. April 24, 2020

    Referred to Com. on REV. & TAX.

20. March 17, 2020

    From printer. May be heard in committee April 16.

21. March 16, 2020

    Read first time. To print.

Sponsors

• Committee on Revenue and Taxation · Primary

Votes

Subjects