BILL NUMBER: AB 2271	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 12, 2012
	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Member Perea

                        FEBRUARY 24, 2012

    An act to amend Sections 6055 and 6203.5 of the Revenue
and Taxation Code, relating to taxation   An act to add
Section 19846.5 to the Government Code, relating to employment 
.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2271, as amended, Perea.  Sales and Use Taxes:
worthless accounts.  Franchise Tax Board: seasonal
clerks.  
   Under existing law, if an employer discharges an employee, the
wages earned and unpaid at the time of discharge are due and payable
immediately, as specified. Existing law also provides that, unless
otherwise provided for by a collective bargaining agreement, if an
employment contract or policy provides for paid vacations, and an
employee is terminated, the employer must pay the employee for the
employee's unused vested vacation time, as specified.  
   This bill would provide that, notwithstanding any other law, if
the Franchise Tax Board determines there is a lack of work for a
seasonal clerk employed by the board, the board may (1) pay the clerk
a lump-sum payment for accumulated vacation or annual leave credit,
(2) by mutual agreement between the board and the clerk, schedule the
clerk for vacation or annual leave, (3) allow the clerk to retain
his or her vacation or annual leave credit, or (4) effect any
combination of the above.  
   Existing sales and use tax laws authorize a deduction or refund of
tax in the case of worthless and written-off accounts held by a
retailer or lender under specified circumstances, which include
preparing and retaining a proper election before claiming the
deduction or refund.  
   This bill would instead authorize a proper election to be
established when the retailer and lender prepare and retain an
election form, as provided. This would provide that a deduction or
refund claimed shall not be disallowed solely on the ground that a
proper election was not established prior to claiming a refund or
deduction, as specified. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

   SECTION 1.    Section 19846.5 is added to the 
 Government Code  , to read:  
   19846.5.  Notwithstanding any other law, including Section 201 of
the Labor Code, if the Franchise Tax Board determines that there is a
lack of work for a seasonal clerk employed by the board, the board
may, without permanent separation of the clerk, do any of the
following:
   (a) Pay the clerk in a lump-sum payment for accumulated vacation
or annual leave credit.
   (b) By mutual agreement between the board and the clerk, schedule
the clerk for vacation or annual leave.
   (c) Allow the clerk to retain his or her vacation or annual leave
credit.
   (d) Effect a combination of any or all of the actions described in
subdivisions (a) to (c), inclusive.  
  SECTION 1.    Section 6055 of the Revenue and
Taxation Code is amended to read:
   6055.  (a) A retailer is relieved from liability for sales tax
that became due and payable, insofar as the measure of the tax is
represented by accounts that have been found to be worthless and
charged off for income tax purposes by the retailer or, if the
retailer is not required to file income tax returns, charged off in
accordance with generally accepted accounting principles. A retailer
that has previously paid the tax may, under rules and regulations
prescribed by the board, take as a deduction the amount found
worthless and charged off by the retailer. If these accounts are
thereafter in whole or in part collected by the retailer, the amount
collected shall be included in the first return filed after the
collection and the tax shall be paid with the return. For purposes of
this subdivision, the term "retailer" shall include any entity
affiliated with the retailer under Section 1504 of Title 26 of the
United States Code.
   (b) (1) In the case of accounts held by a lender, a retailer or a
lender that makes a proper election under paragraph (4) shall be
entitled to a deduction or refund of the tax that the retailer has
previously reported and paid if all of the following conditions are
met:
   (A) A deduction was not previously claimed or allowed on any
portion of the accounts.
   (B) The accounts have been found worthless and written off by the
lender in accordance with the requirements of subdivision (a).
   (C) The contract between the retailer and the lender contains an
irrevocable relinquishment of all rights to the account from the
retailer to the lender.
   (D) The retailer remitted the tax on or after January 1, 2000.
   (E) The party electing to claim the deduction or refund under
paragraph (4) files a claim in a manner prescribed by the board.
   (2) If the retailer or the lender thereafter collects in whole or
in part any accounts, one of the following shall apply:
   (A) If the retailer is entitled to the deduction or refund under
the election specified in paragraph (4), the retailer shall include
the amount collected in its first return filed after the collection
and pay tax on that amount with the return.
   (B) If the lender is entitled to the deduction or refund under the
election specified in paragraph (4), the lender shall pay the tax to
the board in accordance with Section 6451.
   (3) For purposes of this subdivision, the term "lender" means any
of the following:
   (A) A person that holds a retail account that the person purchased
directly from a retailer that reported the tax.
   (B) A person that holds a retail account pursuant to that person's
contract directly with the retailer that reported the tax.
   (C) A person that is either an affiliated entity, under Section
1504 of Title 26 of the United States Code, of a person described in
subparagraph (A) or (B), or an assignee of a person described in
subparagraph (A) or (B).
   (4) (A) For purposes of this section, a "proper election" shall be
established if the retailer that reported the tax and the lender
prepare and retain an election form, signed by both parties,
designating which party is entitled to claim the deduction or refund.
This election may not be amended or revoked unless a new election,
signed by both parties, is prepared and retained by the retailer and
the lender.
   (B) A deduction or refund under this section shall not be
disallowed solely on the ground that a proper election was not
established prior to claiming the deduction or refund if a proper
election was established after claiming the deduction or refund.
 
  SEC. 2.    Section 6203.5 of the Revenue and
Taxation Code is amended to read:
   6203.5.  (a) A retailer is relieved from liability to collect use
tax that became due and payable, insofar as the measure of the tax is
represented by accounts that have been found to be worthless and
charged off for income tax purposes by the retailer or, if the
retailer is not required to file income tax returns, charged off in
accordance with generally accepted accounting principles. A retailer
that has previously paid the amount of the tax may, under rules and
regulations prescribed by the board, take as a deduction the amount
found worthless and charged off by the retailer. If these accounts
are thereafter in whole or in part collected by the retailer, the
amount collected shall be included in the first return filed after
the collection and the amount of the tax shall be paid with the
return. For purposes of this subdivision, the term "retailer" shall
include any entity affiliated with the retailer under Section 1504 of
Title 26 of the United States Code.
   (b) (1) In the case of accounts held by a lender, a retailer or a
lender that makes a proper election under paragraph (4) shall be
entitled to a deduction or refund of the tax that the retailer has
previously reported and paid if all of the following conditions are
met:
   (A) A deduction was not previously claimed or allowed on any
portion of the accounts.
   (B) The accounts have been found worthless and written off by the
lender in accordance with the requirements of subdivision (a).
   (C) The contract between the retailer and the lender contains an
irrevocable relinquishment of all rights to the account from the
retailer to the lender.
   (D) The retailer remitted the tax on or after January 1, 2000.
   (E) The party electing to claim the deduction or refund under
paragraph (4) files a claim in a manner prescribed by the board.
   (2) If the retailer or the lender thereafter collects in whole or
in part any accounts, one of the following shall apply:
   (A) If the retailer is entitled to the deduction or refund under
the election specified in paragraph (4), the retailer shall include
the amount collected in its first return filed after the collection
and pay tax on that amount with the return.
   (B) If the lender is entitled to the deduction or refund under the
election specified in paragraph (4), the lender shall pay the tax to
the board in accordance with Section 6451.
   (3) For purposes of this subdivision, the term "lender" means any
of the following:
   (A) A person that holds a retail account that the person purchased
directly from a retailer that reported the tax.
   (B) A person that holds a retail account pursuant to that person's
contract directly with the retailer that reported the tax.
   (C) A person that is either an affiliated entity, under Section
1504 of Title 26 of the United States Code, of a person described in
subparagraph (A) or (B), or an assignee of a person described in
subparagraph (A) or (B).
   (4) (A) For purposes of this section, a "proper election" shall be
established if the retailer that reported the tax and the lender
prepare and retain an election form, signed by both parties,
designating which party is entitled to claim the deduction or refund.
This election may not be amended or revoked unless a new election,
signed by both parties, is prepared and retained by the retailer and
the lender.
   (B) A deduction or refund under this section shall not be
disallowed solely on the ground that a proper election was not
established prior to claiming the deduction or refund if a proper
election was established after claiming the deduction or refund.