AB 561, as introduced, Ting. Taxation: documentary transfer tax.
Existing law authorizes counties and cities and counties to impose a documentary transfer tax at a specified rate upon deeds, instruments, or writings by which any lands, tenements, or other realty sold are transferred.
This bill would provide that “realty sold” for purposes of the imposition of a documentary transfer tax includes any acquisition or transfer of ownership interests in a legal entity that would constitute a change in ownerships of that legal entity’s real property, as specified.
Existing law prohibits the imposition of the documentary transfer tax, in the case of any realty held by a partnership, upon any transfer of an interest in a partnership under specified conditions. Existing law also prohibits more than one documentary tax from being imposed by reason of a specified termination of any partnership or other entity treated as a partnership, and any transfer with respect to the realty held by a partnership or other entity treated as a partnership at the time of the termination.
This bill would eliminate those prohibitions.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 11911 of the Revenue and Taxation Code
2 is amended to read:
(a) The board of supervisors of any county or city and
4county, by an ordinance adopted pursuant to this part, may impose,
5on each deed, instrument, or writing by which any lands, tenements,
6or other realty sold within the county shall be granted, assigned,
7transferred, or otherwise conveyed to, or vested in, the purchaser
8or purchasers, or any other person or persons, by hisbegin insert or herend insert or their
9direction, when the consideration or value of the interest or
10property conveyed (exclusive of the value of any lien or
11encumbrance remaining thereon at the time of sale) exceeds one
12hundred dollars ($100) a tax at the rate of fifty-five cents ($0.55)
13for each five hundred dollars ($500) or
fractional part thereof.
14(b) The legislative body of any citybegin delete whichend deletebegin insert thatend insert is within a county
15begin delete whichend deletebegin insert thatend insert has imposed a tax pursuant to subdivision (a) may, by
16an ordinance adopted pursuant to this part, impose, on each deed,
17instrument, or writing by which any lands, tenements, or other
18realty sold within the city shall be granted, assigned, transferred,
19or otherwise conveyed to, or vested in, the purchaser or purchasers,
20or any other person or persons, by hisbegin insert or herend insert
or their direction,
21when the consideration or value of the interest or property
22conveyed (exclusive of the value of any lien or encumbrance
23remaining thereon at the time of sale) exceeds one hundred dollars
24($100), a tax at the rate of one-half the amount specified in
25subdivision (a) for each five hundred dollars ($500) or fractional
26part thereof.
27(c) A credit shall be allowed against the tax imposed by a county
28ordinance pursuant to subdivision (a) for the amount of any tax
29due to any city by reason of an ordinance adopted pursuant to
30subdivision (b). No credit shall be allowed against any county tax
31for a city taxbegin delete whichend deletebegin insert thatend insert is not in conformity with this part.
32(d) For purposes of this section, “realty sold” includes any
33acquisition or transfer of ownership interests in a legal entity that
34would constitute a change in ownership of that legal entity’s real
35property under Section 64.
Section 11925 of the Revenue and Taxation Code is
37amended to read:
(a) In the case of any realty held by a partnership or
2other entity treated as a partnership for federal income tax purposes,
3no levy shall be imposed pursuant to this part by reason of any
4transfer of an interest in the partnership or other entity or otherwise,
5if both of the following occur:
6(1) The partnership or other entity treated as a partnership is
7considered a continuing partnership within the meaning of Section
8708 of the Internal Revenue Code of 1986.
9(2) The continuing partnership or other entity treated as a
10partnership continues to hold the realty concerned.
11(b) If there is a termination of any partnership or other entity
12treated as a partnership for federal income tax purposes, within
13the meaning of Section 708 of the Internal Revenue Code of 1986,
14for purposes of this part, the partnership or other entity shall be
15treated as having executed an instrument whereby there was
16conveyed, for fair market value (exclusive of the value of any lien
17or encumbrance remaining thereon), all realty held by the
18partnership or other entity at the time of the termination.
19(c) Not more than one tax shall be imposed pursuant to this part
20by a county, city and county or city by reason of a termination
21described in subdivision (b), and any transfer pursuant thereto,
22with respect to the realty held by a partnership or other entity
23treated as a partnership at the time of the termination.
24(d) No
begin insertNo end insertlevy shall be imposed pursuant to this part by reason
26of any transfer between an individual or individuals and a legal
27entity or between legal entities that results solely in a change in
28the method of holding title to the realty and in which proportional
29ownership interests in the realty, whether represented by stock,
30membership interest, partnership interest, cotenancy interest, or
31otherwise, directly or indirectly, remain the same immediately
32after the transfer.
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