BILL ANALYSIS Ó
AB 1775
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Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1775 (Obernolte) - As Amended April 13, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill modifies tax return dates, for taxable years beginning
on or after January 1, 2016, for partnerships, limited liability
companies (LLCs), "C" corporations, and "S" corporations under
the Personal Income Tax (PIT) Law and Corporation Tax (CT) Law.
Specifically, this bill:
1)Changes the tax return due date for a "C" corporation or an
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LLC classified as a corporation to be the fifteenth day of the
fourth month instead of the fifteenth day of the third month.
2)Changes the tax return due date for a partnership or a LLC
classified as a partnership to be the fifteenth day of the
third month instead of the fifteenth day of the fourth month.
3)Provides that an "S" corporation must file a return by the
fifteenth day of the third month following the close of its
taxable year.
FISCAL EFFECT:
Minor and absorbable administrative costs to the Franchise Tax
Board (FTB).
COMMENTS:
1)Background and purpose. In 2015, Congress enacted legislation
to shorten the tax return due date for partnerships by one
month, and extend the due date for "C" corporations by one
month so that the filing deadline for partnerships would
precede the due dates of their individual and corporate
investors. These new federal due dates are intended to
alleviate timing pressure and provide a more logical flow of
information for a more efficient preparation process.
As a result of these federal changes, California's due dates
for similar tax filings are no longer aligned. Because
California does not automatically conform to federal law, the
author argues that AB 1775 is needed to streamline the
preparation process and reduce complexity for taxpayers and
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businesses.
2)Similar legislation. AB 2338 (Chavez) similarly conforms state
tax return due dates with federal law, but also make other
changes regarding due date for certain taxes. That bill is
pending in the Assembly Committee on Revenue and Taxation.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081