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  








                                                                    AB 1775


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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