BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1413|
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THIRD READING
Bill No: AB 1413
Author: Assembly Revenue and Taxation Committee
Amended: As introduced
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 7/3/13
AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu
ASSEMBLY FLOOR : 76-0, 5/29/13 - See last page for vote
SUBJECT : Corporation Tax Law: tentative minimum tax:
credits: exempt organizations
SOURCE : Author
DIGEST : This bill clarifies the scope of the California
Motion Picture Tax Credit (film tax credit) utilization and
simplifies the process by which certain nonprofit organizations
may obtain tax-exempt status in California.
ANALYSIS : Existing law allows a qualified taxpayer, for
taxable years beginning on or after January 1, 2011, a film tax
credit, under either the Personal Income Tax Law (PIT) or
Corporation Tax (CT) Law. Requires the California Film
Commission to allocate $100 million of credit authorizations
each year during the period 2009-10 through 2016-17 fiscal years
on a first-come, first-serve basis.
This bill clarifies the scope of the film tax credit utilization
and simplifies the process by which certain nonprofit
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AB 1413
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organizations may obtain tax-exempt status in California.
Specifically, this bill:
1. Provides that the film tax credit may be used to reduce a
qualified corporate taxpayer's "regular" income tax beyond
the tentative minimum tax for taxable years beginning on or
after January 1, 2011.
2. Permits organizations formed under Internal Revenue Code
(IRC) Section 501(c)(4), (5), (6), or (7) that are tax-exempt
for federal tax purposes to be treated as tax-exempt
organizations for California tax purposes, without approval
by the Franchise Tax Board (FTB). Specifically:
A. Provides that an organization organized and operated
for nonprofit purposes shall be exempt under the CT Law
upon submission to the FTB a copy of the determination
letter or ruling issued by the Internal Revenue Service
(IRS) approving the organization's tax-exempt status under
IRC Section 501(c)(4), (5), (6), or (7).
B. Requires the organization to notify the FTB of a
revocation or suspension of tax-exempt status for federal
income tax purposes, and upon receipt thereof, the FTB
shall rescind the organization of tax-exempt status for
state tax purposes.
C. States that the California approval of tax-exempt
status based upon notification of federal approval does
not prevent the FTB from revoking the exemption of an
organization that is not operated in accordance with
California or federal laws.
D. Provides that an organization formed as a California
corporation or is qualified to do business in this state
will not qualify as tax exempt for state tax purposes if
it is listed by the Secretary of State (SOS) or FTB as
"suspended" or "forfeited" and will not receive an
acknowledgment letter from the FTB until it reinstates its
status with the SOS and FTB as an "active" corporation.
E. Specifies that, if the FTB revokes or suspends
tax-exempt status of an organization, the exemption may be
reinstated only upon compliance with state tax laws,
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regardless of whether the organization provides a
determination letter from the IRS.
1. Authorizes the FTB to prescribe rules and regulations to
implement this bill.
2. Declares that the retroactive application of amendments made
to the provisions relating to the film tax credit serves a
public purpose for specified reasons and does not constitute
a gift of public funds within the meaning of Section 6 of
Article XVI of the California Constitution.
3. Contains an urgency clause.
Comments
This bill is the Assembly Revenue and Taxation Committee's
annual omnibus bill to make technical changes to the PIT and CT
Law. Both items represent noncontroversial changes in law that
should help clarify issues for both taxpayers and FTB alike.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, this bill
clarifies the scope of the California Motion Picture Tax Credit
utilization and simplifies the process by which certain
nonprofit organizations may obtain tax-exempt status in
California. Specifically, this bill:
Allows the California Motion Picture and Television
Production Credit to reduce a corporate taxpayer's tax below
tentative minimum tax.
Eliminates the requirements for certain federally tax-exempt
entities to apply for a California income tax exemption.
Declares that the retroactive application of amendments made
to the provisions relating to the film tax credit serves a
public purpose for specified reasons and does not constitute
a gift of public funds within the meaning of Section 6 of
Article XVI of the California Constitution.
SUPPORT : (per Senate Governance and Finance Committee analysis
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of 7/3/13 - unable to reverify at time of writing)
California Teamsters Public Affairs Council
Directors Guild of America
International Alliance of Theatrical Stage Employees
International Brotherhood of Teamsters, Local 399
Laborers' International Union of North America, Local 724
Professional Musicians Local 47
Recording Musicians Association
SAG-AFTRA
ASSEMBLY FLOOR : 76-0, 5/29/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin,
Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,
V. Manuel P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, John A. P�rez
NO VOTE RECORDED: Campos, Holden, Yamada, Vacancy
AB/AL:k 9/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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