AB 561, as amended, 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 includesbegin insert, but is not limited to,end insert 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.
begin insertExisting law prohibits the imposition of a documentary transfer tax on the making or delivery of a conveyance to make effective an order of the Securities and Exchange Commission, if specified requirements are met.
end insertbegin insertThe bill would eliminate that prohibition.
end insertExisting 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 transferbegin insert pursuant to that terminationend insert with respect to the realty held bybegin delete aend deletebegin insert theend insert
partnership or other entitybegin delete treated as a partnership at the time of the terminationend delete.
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 delete orend deletebegin insert,end insert herbegin insert,end insert or
9their direction, 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)begin insert,end insert 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 city that is within a county that
15has imposed a tax pursuant to subdivision (a) may, by an ordinance
16adopted pursuant to this part, impose, on each deed, instrument,
17or writing by which any lands, tenements, or other realty sold
18within the city shall be granted, assigned, transferred, or otherwise
19conveyed to, or vested in, the purchaser or purchasers, or any other
20person or persons, by hisbegin delete orend deletebegin insert,end insert
herbegin insert,end insert or their direction, when the
21consideration or value of the interest or property conveyed
22(exclusive of the value of any lien or encumbrance remaining
23thereon at the time of sale) exceeds one hundred dollars ($100), a
24tax at the rate of one-half the amount specified in subdivision (a)
25for each five hundred dollars ($500) or fractional part thereof.
26(c) A credit shall be allowed against the tax imposed by a county
27ordinance pursuant to subdivision (a) for the amount of any tax
28due to any city by reason of an ordinance adopted pursuant to
29subdivision (b). No credit shall be allowed against any county tax
30for a city tax that is not in conformity with this part.
P3 1(d) For purposes of this section, “realty sold” includesbegin insert, but is
2not limited to,end insert any acquisition or transfer of ownership interests
3in a legal entity that would constitute a change in ownership of
4that legal entity’s real propertybegin delete under Section 64end deletebegin insert as set forth in
5Chapter 2 (commencing with Section 60) of Part 0.5 of Division
61end insert.
begin insertSection 11924 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
8repealed.end insert
Any tax imposed pursuant to this part shall not apply
10to the making or delivery of conveyances to make effective any
11order of the Securities and Exchange Commission, as defined in
12subdivision (a) of Section 1083 of the Internal Revenue Code of
131954; but only if--
14(a) The order of the Securities and Exchange Commission in
15obedience to which such conveyance is made recites that such
16conveyance is necessary or appropriate to effectuate the provisions
17of Section 79k of Title 15 of the United States Code, relating to
18the Public Utility Holding Company Act of 1935;
19(b) Such order specifies the property which is ordered to be
20conveyed;
21(c) Such conveyance is made in obedience to such order.
Section 11925 of the Revenue and Taxation Code is
24amended to read:
begin insert(a)end insertbegin insert end insertNo levy shall be imposed pursuant to this part by
26reason of any transfer between an individual or individuals and a
27legal entity or between legal entities that results solely in a change
28in the method of holding title to the realty and in which
29proportional ownership interests in the realty, whether represented
30by stock, membership interest, partnership interest, cotenancy
31interest, or otherwise, directly or indirectly, remain the same
32immediately after the transfer.
33(b) Notwithstanding subdivision (a), if
there is a termination of
34a partnership or other entity treated as a partnership for federal
35income tax purposes, within the meaning of Section 708 of the
36Internal Revenue Code of 1986, for purposes of this part the
37partnership or other entity shall be treated as having executed an
38instrument whereby there was conveyed, for fair market value,
39exclusive of the value of any lien or encumbrance remaining
P4 1thereon, all realty held by the partnership or other entity at the
2time of the termination.
3(c) No more than one tax shall be imposed pursuant to this part
4by a county, city, or city and county by reason of a termination
5described in subdivision (b), or any transfer pursuant thereto, with
6respect to the realty held by a partnership or other entity treated
7as a partnership at the time of termination.
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