Amended in Assembly May 9, 2013

Amended in Assembly April 30, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 561


Introduced by Assembly Member Ting

February 20, 2013


An act to amend Sections 11911 and 11925 of, and to repeal Section 11924 of, the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

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 includes, but is not limited to, 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 insert The bill would also require a city, county, or city and county that imposes a documentary transfer tax to submit information to the Board of Equalization annually regarding the imposition of the documentary transfer tax and require the board to compile the information into a publicly available report.end insert

Existing 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.

The bill would eliminate that prohibition.

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 pursuant to that termination with respect to the realty held by the partnership or other entity.

This bill would eliminate those prohibitions.

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 11911 of the Revenue and Taxation Code
2 is amended to read:

3

11911.  

(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 his, her, 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 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 his, her, 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.

P3    1(c) A credit shall be allowed against the tax imposed by a county
2ordinance pursuant to subdivision (a) for the amount of any tax
3due to any city by reason of an ordinance adopted pursuant to
4subdivision (b). No credit shall be allowed against any county tax
5for a city tax that is not in conformity with this part.

6(d) For purposes of this section, “realty sold” includes, but is
7not limited to, any acquisition or transfer of ownership interests
8in a legal entity that would constitute a change in ownership of
9that legal entity’s real property as set forth in Chapter 2
10(commencing with Section 60) of Part 0.5 of Division 1.

begin insert

11(e) A city, county, or city and county that imposes a documentary
12transfer tax shall submit information to the Board of Equalization
13annually regarding the imposition of the documentary transfer
14tax. The board shall compile this information into a report and
15make the report available to the public.

end insert
16

SEC. 2.  

Section 11924 of the Revenue and Taxation Code is
17repealed.

18

SEC. 3.  

Section 11925 of the Revenue and Taxation Code is
19amended to read:

20

11925.  

(a) No levy shall be imposed pursuant to this part by
21reason of any transfer between an individual or individuals and a
22legal entity or between legal entities that results solely in a change
23in the method of holding title to the realty and in which
24proportional ownership interests in the realty, whether represented
25by stock, membership interest, partnership interest, cotenancy
26interest, or otherwise, directly or indirectly, remain the same
27immediately after the transfer.

28(b) Notwithstanding subdivision (a), if there is a termination of
29a partnership or other entity treated as a partnership for federal
30income tax purposes, within the meaning of Section 708 of the
31Internal Revenue Code of 1986, for purposes of this part the
32partnership or other entity shall be treated as having executed an
33instrument whereby there was conveyed, for fair market value,
34exclusive of the value of any lien or encumbrance remaining
35thereon, all realty held by the partnership or other entity at the time
36of the termination.

37(c) No more than one tax shall be imposed pursuant to this part
38by a county, city, or city and county by reason of a termination
39described in subdivision (b), or any transfer pursuant thereto, with
P4    1respect to the realty held by a partnership or other entity treated
2as a partnership at the time of termination.



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