BILL NUMBER: AB 1143	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 22, 2013

INTRODUCED BY   Assembly Member Skinner

                        FEBRUARY 22, 2013

   An act to amend Sections 23304.1 and 23305.5 of the Revenue and
Taxation Code, relating to taxation, and declaring the urgency
thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1143, as amended, Skinner. Tax administration: suspension or
forfeiture: limited liability companies.
   Existing law provides that specified limited liability companies
and corporations that are suspended or forfeited for failure to file
a tax return or for failure to pay delinquent taxes, penalties, or
interest are subject to specified consequences, including contract
voidability for the period in which the entity is suspended or
forfeited.
   This bill would subject foreign nonregistered limited liability
companies to contract voidability where the foreign nonregistered
limited liability company is subject to suspension or forfeiture for
failure to file a tax return or for failure to pay delinquent taxes,
penalties, or interest.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 23304.1 of the Revenue and Taxation Code is
amended to read:
   23304.1.  (a) Every contract made in this state by a taxpayer
during the time that the taxpayer's powers, rights, and privileges
are suspended or forfeited pursuant to Section 23301, 23301.5, or
23775 shall, subject to Section 23304.5, be voidable at the instance
of any party to the contract other than the taxpayer.
   (b) If a foreign taxpayer that neither is qualified to do business
nor has an account number from the Franchise Tax Board, fails to
file a tax return required under this part, any contract made in this
state by that taxpayer during the applicable period specified in
subdivision (c) shall, subject to Section 23304.5, be voidable at the
instance of any party to the contract other than the taxpayer.
   (c) (1) For purposes of subdivision (b), the applicable period
shall be the period beginning on January 1, 1991, or the first day of
the taxable year for which the taxpayer has failed to file a return,
whichever is later, and ending on the earlier of the date the
taxpayer qualified to do business in this state or the date the
taxpayer obtained an account number from the Franchise Tax Board.
   (2) With regard to a limited liability company, the applicable
period shall be the period beginning on January 1, 2014, or the first
day of the taxable year for which the taxpayer has failed to file a
return, whichever is later.
   (d) If a taxpayer fails to file a tax return required under this
part, to pay any tax or other amount owing to the Franchise Tax Board
under this part or to file any statement or return required under
Section 23772 or 23774, within 60 days after the Franchise Tax Board
mails a written demand therefor, any contract made in this state by
the taxpayer during the period beginning at the end of the 60-day
demand period and ending on the date relief is granted under Section
23305.1, or the date the taxpayer qualifies to do business in this
state, whichever is earlier, shall be voidable at the instance of any
party to the contract other than the taxpayer. This subdivision
shall apply only to a taxpayer if the taxpayer has an account number
from the Franchise Tax Board, but has not qualified to do business
under the Corporations Code. In the case of a taxpayer that has not
complied with the 60-day demand, the taxpayer's name, Franchise Tax
Board account number, date of the demand, date of the first day after
the end of the 60-day demand period, and the fact that the taxpayer
did not within that period pay the tax or other amount or file the
statement or return, as the case may be, shall be a matter of public
record.
  SEC. 2.  Section 23305.5 of the Revenue and Taxation Code is
amended to read:
   23305.5.  For purposes of this article:
   (a) "Taxpayer" means either:
   (1) A corporation subject to tax under this chapter.
   (2) A business entity organized under a statute or law, or a state
or a federally recognized Indian Tribe, or another jurisdiction, if
the statute or law describes or refers to the entity as a limited
liability company or if regulations of the Franchise Tax Board
identify a business entity organized under the laws of a foreign
country as a limited liability company.
   (b) With regard to a limited liability company:
   (1) "Articles of incorporation" shall include a limited liability
company's articles of organization.
   (2) "Tax" shall include the tax and fee imposed by Sections 17941
and 17942, or former Sections 23091 and 23092, respectively.
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to ensure that all entities doing business in California
are treated equally under the  Rev and Tax  
Revenue and Taxation  Code, it is necessary that this act take
effect immediately.