AB 435 — Revises provisions governing the commerce tax. (BDR 32-1049)

A.B.Assembly Bill No.

435435–Committee ASSEMBLYon BILLRevenue NOCHAPTER.......... .

435–COMMITTEE ON REVENUE M ARCH 26, 2021 ____________ Referred to Committee on Revenue SUMMARY—Revises provisions governing the commerce tax.

(BDR 32-1049) FISCAL NOTE:

Effect on Local Government:

No.

Effect on the State:

Yes.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

Except as otherwise provided in subsection 2, “business entity” means a corporation, partnership, proprietorship, limited-liability company, business association, joint venture, - *AB435* – 2 – limited-liability partnership, business trust, professional association, joint stock company, holding company and any other person engaged in a business.

(b) A natural person, unless that person is engaging in a business and is required to file with the Internal Revenue Service a Schedule C (Form 1040), Profit or Loss from Business, or its equivalent or successor form, a Schedule E (Form 1040), Supplemental Income and Loss, or its equivalent or successor form, or a Schedule F (Form- 1040),81st ProfitSession or(2021) Loss– from2 Farming,– successor form, for that business.arming, or its equivalent or successor(c) form,A forgovernmental thatentity. business.

(c)(d) A governmentalnonprofit entity.religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to U.S.C.

(d) A nonprofit religious, charitable, fraternal or other organization that qualifies as a tax-exempt organization pursuant to 26 U.S.C.

(h) An estate of a natural person as defined by section 7701(a)(30)(D)7701(a)(30)(D), ofexcluding thean Internalestate Revenuetaxable Code,as a business entity pursuant to 26 U.S.C.C.F.R.

§ 7701(a)(30)(D), excluding an estate taxable as a business entity pursuant to 26 C.F.R.

- *AB435* – 3 – (j) A real estate mortgage investment conduit, as defined by section 860D of the Internal Revenue Code, 26 U.S.C.

by (k) A trust qualified under section 401(a) of the Internal Revenue Code, 26 U.S.C.

§§ 80a-1 et seq., as - 81st Session (2021) – 3 – amended, and the collection and distribution of the income from such investments or from tangible property physically located outside this State.

For the purposes of this paragraph, “intangible investments” includes, without limitation, investments in stocks, bonds, notes and other debt obligations, including, without limitation, debt obligations of affiliated corporations, real estate investment trusts, patents, patent applications, trademarks, trade names and similar types of intangible assets or an entity that is registered as an investment company under the Investment Company Act of 1940, 15 U.S.C.

H~~~~~ 21 - *AB435*81st Session (2021)