BILL NUMBER: SB 1044	CHAPTERED
	BILL TEXT

	CHAPTER  156
	FILED WITH SECRETARY OF STATE  JULY 27, 2007
	APPROVED BY GOVERNOR  JULY 27, 2007
	PASSED THE SENATE  MAY 7, 2007
	PASSED THE ASSEMBLY  JULY 12, 2007

INTRODUCED BY   Committee on Revenue and Taxation (Oropeza (Chair),
Alquist, Cogdill, Harman, Machado, Runner, Scott, and Wiggins)

                        MARCH 14, 2007

   An act to amend Sections 17299.8, 19175, and 24447 of the Revenue
and Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1044, Committee on Revenue and Taxation. Income and corporation
taxes: tax withholding.
   The Personal Income Tax Law and the Corporation Tax Law disallow a
deduction for amounts paid to an individual or entity as
remuneration for personal services if that individual or entity fails
to report payments required under specified provisions of those
laws.
   This bill would correct references to obsolete provisions of those
laws.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17299.8 of the Revenue and Taxation Code is
amended to read:
   17299.8.  The Franchise Tax Board may disallow a deduction under
this part to an individual or entity for amounts paid as remuneration
for personal services if that individual or entity fails to report
the payments required under Section 13050 of the Unemployment
Insurance Code or Section 18631 on the date prescribed therefor
(determined with regard to any extension of time for filing).
  SEC. 2.  Section 19175 of the Revenue and Taxation Code is amended
to read:
   19175.  (a) In addition to the penalty imposed by Section 19183
(relating to failure to file information returns), if any person or
entity fails to report amounts paid as remuneration for personal
services as required under Section 13050 of the Unemployment
Insurance Code or Section 18631 on the date prescribed therefor
(determined with regard to any extension of time for filing), that
person or entity may be liable for a penalty determined under
subdivision (b).
   (b) For purposes of subdivision (a), the amount determined under
this subdivision is the maximum rate under Section 17041 multiplied
by the unreported amounts paid as remuneration for personal services.

   (c) The penalty imposed by subdivision (a) shall be assessed
against that person or entity required to file a return under Section
13050 of the Unemployment Insurance Code or Section 18631.
   (d) Article 3 (commencing with Section 19031) of this chapter
(relating to deficiency assessments) shall not apply with respect to
the assessment or collection of any penalty imposed by subdivision
(a).
   (e) The penalty imposed under subdivision (a) shall be in lieu of
the penalty imposed under Section 13052.5 of the Unemployment
Insurance Code (relating to unreported compensation). In the event
that a penalty is imposed under this section and Section 13052.5 of
the Unemployment Insurance Code, only the penalty imposed under
Section 13052.5 of the Unemployment Insurance Code shall apply.
  SEC. 3.  Section 24447 of the Revenue and Taxation Code is amended
to read:
   24447.  The Franchise Tax Board may disallow a deduction under
this part to an individual or entity for amounts paid as remuneration
for personal services if that individual or entity fails to report
the payments required under Section 13050 of the Unemployment
Insurance Code or Section 18631 on the date prescribed therefor
(determined with regard to any extension of time for filing).