BILL ANALYSIS Ó
AB 1412
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1412 (Bocanegra and Gatto)
As Amended September 6, 2013
Majority vote
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|ASSEMBLY: | |(May 30, 2013) |SENATE: |36-1 |(September 11, |
| | | | | |2013) |
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(vote not relevant)
Original Committee Reference: REV. & TAX.
SUMMARY : Temporarily reinstates the income exclusion and
deferral provisions for gain from the sale or exchange of
qualified small business stock (QSBS), as defined, for taxable
years beginning on or after January 1, 2008, and before January
1, 2013.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Provide that, for taxable years beginning on or after January
1, 2008, and before January 1, 2013, a taxpayer may exclude
from gross income, under the Personal Income Tax (PIT) Law,
50% of any gain attributable to the sale or exchange of QSBS
held by the taxpayer for more than five years.
2)Limit the aggregate amount of eligible gain for the taxable
year, in the case of one or more dispositions of QSBS by a
taxpayer, to the greater of the following:
a) Ten million dollars, reduced by the aggregate amount of
eligible gain taken into account by the taxpayer for prior
taxable years and attributable to dispositions of QSBS, as
provided.
b) Ten times the aggregate adjusted basis of QSBS issued by
the corporation and disposed of by the taxpayer during the
taxable year.
3)Define a QSBS as a stock in a "C" corporation that is
originally issued after August 10, 1993, if both of the
following requirements are met:
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a) As of the date of issuance, the corporation is a
qualified small business.
b) The stock is acquired in exchange for money or property,
or as compensation for services provided to the
corporation, as specified.
4)Define a "qualified small business" as a domestic "C"
corporation, provided all of the following apply:
a) The aggregate gross assets of the corporation at all
times on or after July 1, 1993, and before the issuance did
not exceed $50 million;
b) The aggregate gross assets of the corporation
immediately after the issuance do not exceed $50 million;
c) At least 80% of the corporation's payroll, as measured
by total dollar value, is attributable to employment
located within California; and,
d) The corporation agrees to submit reports to the
Franchise Tax Board (FTB) and to shareholders as the FTB
may require to carry out the purposes of the QSBS statutes.
5)Specify that a stock in a corporation shall not be treated as
a QSBS unless, among other requirements, during substantially
all of the taxpayer's holding period for the stock, the
corporation meets a new non-discriminatory active business
requirement, as provided.
6)Authorize a taxpayer to elect to defer gain from the sale of
QSBS made after August 5, 1997, and before January 1, 2013,
provided that the taxpayer held the QSBS for more than six
months, the gain is not treated as ordinary income for
purposes of the PIT law, and the taxpayer acquires a
replacement QSBS within 60 days of the date of the sale.
7)Waive the imposition of penalties and accrual of interest with
respect to the additional taxes assessed as a result of the
court decision in Cutler v. FTB (2012) 208 Cal.App.4th 1247,
for each taxable year beginning on or after January 1, 2008,
and before January 1, 2013, and allows the affected taxpayers
to enter into a written installment payment agreement with the
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FTB for the payment of those taxes over a period not to exceed
five years.
8)Allow taxpayers to file a claim for credit or refund,
resulting from this bill, for taxable years beginning on or
after January 1, 2008, and ending before January 1, 2009,
within 180 days of the effective date of this bill.
9)Make legislative findings and declarations regarding the
public purpose served by the bill.
10)State that the bill's provisions are not severable and, if
any provisions of this bill or its application are held
invalid, the invalidity shall apply to other provisions or
applications of this act, except for those provisions relating
to the waiver of penalties and interest.
AS PASSED BY THE ASSEMBLY , this bill authorized a person (i.e.,
a retailer) to assign to a customer the right to receive a
refund under the Sales and Use Tax Law, provided specified
conditions were met.
FISCAL EFFECT : Unknown
COMMENTS : This bill was substantially amended in the Senate and
the Assembly-approved provisions of this bill were deleted.
This bill, as amended in the Senate is inconsistent with
Assembly actions. The language of this bill is similar,
however, to SB 209 (Lieu) of 2013, currently pending on the
Assembly Floor.
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098
FN:
0002708