Amended in Assembly March 14, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 893

Introduced by Assembly Member Daly

February 22, 2013

begin delete An act to amend Section 6006.3 of the Revenue and Taxation Code, relating to taxation. end delete begin insert An act to add Sections 17239 and 24356.9 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 893, as amended, Daly. begin delete Sales and use taxes: lease: definition. end delete begin insert Income taxes: deductions: Mello-Roos. end insert

begin insert

The Personal Income Tax Law and the Corporation Tax Law authorize various deductions in computing income that is subject to tax under those laws.

end insert begin insert

This bill would allow a deduction, under both of those laws, of amounts paid under the Mello-Roos Community Facilities Act of 1982.

end insert begin insert

This bill would take effect immediately as a tax levy.

end insert begin delete

The Sales and Use Tax Law defines a “lease” for purposes of application of that law.

end delete begin delete

This bill would make technical, nonsubstantive changes to that definition.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 17239 is added to the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

begin insert

begin insert 17239. end insert   

For each taxable year beginning on or after January
1, 2014, there shall be allowed as a deduction the amount paid by
the taxpayer pursuant to the Mello-Roos Community Facilities Act
of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1
of Division 2 of Title 5 of the Government Code).

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 24356.9 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 24356.9. end insert   

For each taxable year beginning on or after January
1, 2014, there shall be allowed as a deduction the amount paid by
the taxpayer pursuant to the Mello-Roos Community Facilities Act
of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1
of Division 2 of Title 5 of the Government Code).

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end insert

begin delete

SECTION 1.  

Section 6006.3 of the Revenue and Taxation
Code is amended to read:

6006.3.  

“Lease” includes rental, hire and license. “Lease” does
not include a use of tangible personal property for less than one
day for a charge of less than twenty dollars ($20) when the
privilege to use the property is restricted to its use on the premises
or at a business location of the grantor of the privilege. If a contract
designated as a lease binds the lessee for a fixed term and the lessee
is to obtain title at the end of the term upon the completion of the
required payment, or has the option at that time to purchase the
property for a nominal amount, the contract shall be regarded as
a sale under a security agreement from its inception and not as a
lease. For a contract designated as a lease with any state or local
governmental body, or any agency or instrumentality thereof, the
lessee shall be treated as bound for a fixed term notwithstanding
any right of the lessee to terminate the contract in the event that
sufficient funds are not appropriated to pay amounts due under the
contract.

end delete