BILL NUMBER: SB 105 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 19, 2007
INTRODUCED BY Senator Migden
JANUARY 17, 2007
An act to amend Section 18521 17021.7
of the Revenue and Taxation Code, relating to taxation ,
to take effect immediately, tax levy .
LEGISLATIVE COUNSEL'S DIGEST
SB 105, as amended, Migden. Taxation.
Taxation: registered domestic partners.
The Personal Income Tax Law imposes tax
taxes on taxable income and provides, among other
things, that specified definitions govern the construction of that
law. Existing law allows treats married couples
and registered domestic partners to file joint or separate
state tax returns, as specified the same in
determining ownership of business interests and stock shares .
Under existing franchise and income tax laws and the Corporation
Tax Law, the marital status of a person is considered in determining
the ownership of business interests and stock shares. The
Katz-Harris Taxpayers' Bill of Rights provides taxpayers with
specified protections for purposes of, among other things,
determining their correct tax liability, and includes a release from
a levy upon a finding that the levy threatens the health or welfare
of the taxpayer or the taxpayer's spouse.
This bill would make technical, nonsubstantive changes to
this provision provide that a domestic partner or
former domestic partner be treated as the spouse or former spouse of
that taxpayer for purposes of applying the Personal Income Tax Law,
specified franchise and income tax laws, the Corporation Tax Law, and
the Katz-Harris Taxpayer's Bill of Rights Act, except where that
treatment would result in the classification of a business entity
under those laws that would be different than the classification of
that entity for federal income tax purposes, as provided .
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17021.7 of the
Revenue and Taxation Code is amended to read:
17021.7. (a) (1) For purposes of this part,
the domestic partner of the taxpayer shall be treated as the spouse
of the taxpayer for purposes of applying only Sections 105(b), 106
(a), 162(), 162(n), and 213(a) of the Internal Revenue Code and for
purposes of determining whether an individual is the taxpayer's
"dependent" or "member of their family" as these terms are used in
those sections.
(2) This subdivision shall apply to each taxable year beginning on
or after January 1, 2002.
(b) (1) Except as otherwise provided, the domestic partner or
former domestic partner of a taxpayer shall be treated as the spouse
or former spouse of that taxpayer for purposes of applying provisions
of this part, Part 10.2 (commencing with Section 18401), Part 10.7
(commencing with Section 21001), and Part 11 (commencing with Section
23001), and for purposes of applying provisions of the Internal
Revenue Code that are applicable for purposes of this part, Part
10.2, Part 10.7, or Part 11.
(2) A domestic partner shall not be treated as the spouse of a
taxpayer if the treatment required by paragraph (1) would result in
the classification of a business entity for purposes of this part,
Part 10.2, or Part 11 that would be different than the classification
of that business entity for federal income tax purposes.
(3) The amendments made by the act adding this subdivision shall
be operative for each taxable year beginning on or after January 1,
2007.
(b)
(c) For purposes of this section, the term "domestic
partner" means an individual partner in a domestic partner
relationship within the meaning of Section 297 of the Family Code.
SEC. 2. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.
SECTION 1. Section 18521 of the Revenue and
Taxation Code is amended to read:
18521. (a) (1) Except as otherwise provided in this section, an
individual shall use the same filing status that he or she used on
his or her federal income tax return filed for the same taxable year.
(2) If the Franchise Tax Board determines that the filing status
used on the taxpayer's federal income tax return was incorrect, the
Franchise Tax Board may, pursuant to Section 19033 (relating to
deficiency assessments), revise the return to reflect a correct
filing status.
(3) If either spouse or domestic partner was a nonresident for any
portion of the taxable year, and the couple files a joint federal
income tax return, the spouses or domestic partners shall be required
to file a joint nonresident return.
(b) In the case of an individual who is not required to file a
federal income tax return for the taxable year, that individual may
use any filing status on the return required under this part that he
or she would be eligible to use on a federal income tax return for
the same taxable year if a federal income tax return was required.
(c) Notwithstanding subdivision (a), spouses and registered
domestic partners, as described in Section 297 of the Family Code,
who are registered as domestic partners as of the close of the
taxable year, may file separate returns under this part if either
spouse or registered domestic partner was either of the following
during the taxable year:
(1) An active member of the Armed Forces or any auxiliary branch
thereof.
(2) A nonresident for the entire taxable year who had no income
from a California source.
(d) Notwithstanding subdivision (a), registered domestic partners,
as described in Section 297 of the Family Code, who are registered
as domestic partners as of the close of the taxable year and who are
prohibited under federal law from filing a joint federal income tax
return, shall either file a joint state income tax return or separate
state income tax returns by applying the standards applicable to
spouses who file separately pursuant to Section 6013 of the Internal
Revenue Code. A separate return filed by a domestic partner of a
registered domestic partnership shall be subject to the same
conditions and limitations applicable to the separate return of a
spouse.
(e) Except for taxpayers described in subdivision (c), for any
taxable year with respect to which a joint return has been filed, a
separate return shall not be made by either spouse or domestic
partner after the period for either to file a separate return has
expired.
(f) No joint return shall be made if the spouses or the domestic
partners have different taxable years; except that if their taxable
years begin on the same day and end on different days because of the
death of either or both, then a joint return may be made with respect
to the taxable year of each. The above exception shall not apply if
the surviving spouse remarries or the surviving domestic partner
enters into a new domestic partnership before the close of his or her
taxable year, or if the taxable year of either spouse or domestic
partner is a fractional part of a year under Section 443(a) of the
Internal Revenue Code.
(g) In the case of the death of one spouse or domestic partner or
both spouses or both domestic partners the joint return with respect
to the decedent may be made only by the decedent's executor or
administrator; except that, in the case of the death of one spouse or
domestic partner, the joint return may be made by the surviving
spouse or surviving domestic partner with respect to both that spouse
or domestic partner and the decedent if no return for the taxable
year has been made by the decedent, no executor or administrator has
been appointed, and no executor or administrator is appointed before
the last day prescribed by law for filing the return of the surviving
spouse or surviving domestic partner. If an executor or
administrator of the decedent is appointed after the making of the
joint return by the surviving spouse or surviving domestic partner,
the executor or administrator may disaffirm the joint return by
making, within one year after the last day prescribed by law for
filing the return of the surviving spouse or surviving domestic
partner, a separate return for the taxable year of the decedent with
respect to which the joint return was made, in which case the return
made by the survivor shall constitute his or her separate return.