Amended in Senate March 4, 2015

Senate BillNo. 35


Introduced by Senator Wolk

(Principal coauthor: Assembly Member Dodd)

December 1, 2014


An act to add Sections 17207.14 and 24347.14 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

SB 35, as amended, Wolk. Income and corporation taxes: deductions: disasterbegin delete relief: Counties of Napa, Solano, and Sonoma.end deletebegin insert relief.end insert

The Personal Income Tax Law and the Corporation Tax Law provide for a deductionbegin delete and the carryover to specified taxable yearsend delete of specified losses sustained as a result ofbegin delete certainend delete disasters occurring in California in an area determined by the President of the United States to warrant specified federal assistance orbegin insert, for other disasters for which a specific law has been enacted,end insert proclaimed by the Governor to be in a state of emergency. Those lawsbegin delete furtherend delete allow a taxpayer to elect to deduct those disaster losses on the return for the taxable year preceding the taxable year in which the disaster occurredbegin insert, filed by a specified date. Existing law also allows individual and corporate taxpayers to utilize net operating losses and carryovers and carrybacks of those losses for purposes of offsetting their individual and corporate tax liabilities. Existing law, for net operating losses incurred in taxable years beginning on or after January 1, 2013, allows net operating losses to be carrybacks to each of the preceding 2 taxable years, as provided, but varies the amount of carryback allowed for net operating losses attributed to specified taxable yearsend insert.

This bill wouldbegin insert, for taxable years beginning on or after January 1, 2014,end insert extendbegin delete theseend deletebegin insert theend insert provisionsbegin insert relatingend insert to begin insertdisaster end insertlossesbegin delete sustained in the Counties of Napa, Solano, and Sonoma as a result of the earthquake that occurred in August 2014 for which the Governor proclaimed a state of emergencyend deletebegin insert to losses in any city, county, or city and county that is proclaimed by the Governor to be in a state of emergency and would extend the time during which a taxpayer may claim the deduction. This bill would additionally provide that any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss, other than those variations already imposed in existing law, shall not apply to a net operating loss attributable to these specified disaster lossesend insert.

This bill would make a legislative finding and declaration relating to the statewide public purpose served by the bill.

This bill would take effect immediately as a tax levy.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 17207.14 is added to the Revenue and
2Taxation Code
, to read:

3

17207.14.  

(a) begin insertFor taxable years beginning on or after January
41, 2014, end insert
Section 165(i) of the Internal Revenue Codebegin insert, relating to
5disaster losses,end insert
shall be applicable to anybegin delete lossesend deletebegin insert lossend insert sustainedbegin delete in
6the Counties of Napa, Solano, and Sonoma as a result of the
7earthquake that occurred in August 2014end delete
begin insert as a result of any disaster
8occurring in any city, county, or city and county in this state that
9is proclaimed by the Governor to be in a state of emergencyend insert
.

10(b) begin insert(1)end insertbegin insertend insertFor losses described in subdivision (a), the election
11under Section 165(i) of the Internal Revenue Codebegin insert, relating to
12disaster losses,end insert
may be made on a return or amended return filed
13on or before the due date of the return, determined with regard to
14begin insert anyend insert extensionbegin insert of time for filing the returnend insert, for the taxable year in
15which the disaster occurred.

begin insert

16(2) Notwithstanding Section 18572, this subdivision shall apply
17to any loss described in subdivision (a).

end insert

18(c) Unless specifically provided otherwise, any law, other than
19Section 17276.20, that suspends, defers, reduces, or otherwise
20diminishes the deduction of a net operating loss shall not apply to
P3    1a net operating loss attributable to the loss described in subdivision
2(a).

3

SEC. 2.  

Section 24347.14 is added to the Revenue and Taxation
4Code
, to read:

5

24347.14.  

(a) begin insertFor taxable years beginning on or after January
61, 2014, end insert
Section 165(i) of the Internal Revenue Codebegin insert, relating to
7disaster losses,end insert
shall be applicable to anybegin delete lossesend deletebegin insert lossend insert sustainedbegin delete in
8the Counties of Napa, Solano, and Sonoma as a result of the
9earthquake that occurred in August 2014.end delete
begin insert as a result of any disaster
10occurring in any city, county, or city and county in this state that
11is proclaimed by the Governor to be in a state of emergency.end insert

12(b) begin insert(1)end insertbegin insertend insertFor losses described in subdivision (a), the election
13under Section 165(i) of the Internal Revenue Codebegin insert, relating to
14disaster losses,end insert
may be made on a return or amended return filed
15on or before the due date of the return, determined with regard to
16begin insert anyend insert extensionbegin insert of time for filing the returnend insert, for the taxable year in
17which the disaster occurred.

begin insert

18(2) Notwithstanding Section 18572, this subdivision shall apply
19to any loss described in subdivision (a).

end insert

20(c) Unless specifically provided otherwise, any law, other than
21Section 24416.20, that suspends, defers, reduces, or otherwise
22diminishes the deduction of a net operating loss shall not apply to
23a net operating loss attributable to the loss described in subdivision
24(a).

25

SEC. 3.  

The Legislature finds and declares that this act fulfills
26a statewide public purpose becausebegin delete of both of the following:end deletebegin insert it is
27consistent with, and supplements, the proclaimed disaster
28assistance and relief by providing necessary tax relief to persons
29in the affected jurisdictions by allowing them to maintain essential
30basic services and repair damage to, and restore, their homes and
31businesses.end insert

begin delete

32(a) On August 24, 2014, the Governor of California proclaimed
33a state of emergency due to the South Napa Earthquake that
34occurred in August 2014 within the Counties of Napa, Solano, and
35Sonoma, thus qualifying affected persons for various forms of
36governmental assistance and relief.

37(b) This act is consistent with, and supplements, the proclaimed
38disaster assistance and relief by providing necessary tax relief to
39persons in the affected jurisdictions by allowing them to allow
P4    1them to maintain essential basic services and repair damage to,
2and restore, their homes and businesses.

end delete
3

SEC. 4.  

This act provides for a tax levy within the meaning of
4Article IV of the Constitution and shall go into immediate effect.



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