BILL ANALYSIS
SUSPENSE BILL - FOR VOTE ONLY
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
AB 1580 - Calderon
Amended: August 18, 2009
Hearing: August 24, 2009 Tax Levy Fiscal: Yes
SUMMARY: Conforms State Law to Certain Provisions of
Federal Law as of January 1, 2009
EXISTING LAW provides modified conformity of state's
Revenue and Taxation Code to the Internal Revenue Code and
specified public laws.
THIS BILL conforms California law to many of the
federal income tax law changes made over the past two years
by changing the specified date in statute from January 1,
2005 (existing law), to January 1, 2009 (this bill), for
taxable years beginning on or after January 1, 2009. In
addition, the bill makes numerous changes to specifically
not conform to or modify certain items in the IRC. The
following tables, provided by FTB, list the following:
Federal Act sections that impact provisions of
the Personal Income Tax Law (PITL), Administration
of Franchise and Income Tax Law (AFITL), and
Corporation Tax Law (CTL),
Beginning page numbers in FTB's annual report
where that provision is discussed, and
Changes under this bill--whether AB 1580
AB 1580 - Committee on Revenue and Taxation
Page 2
conforms or does not conform to that provision.
(Note that conformity decisions that require
modification are listed in the conform column.)
Note: for all below conformity tables, differences between
the measure considered on July 8, 2009 and the August 18,
2009 version of AB 1580 are noted in bold underline .
2005 Conformity Decisions
These tables contain only items for which a conformity
decision was necessary.
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| |
| Table 3 - ETIA of 2005 (PL 109-58) |
| |
--------------------------------------------------------------------
---------------------------------------------------------------------
| |FTB's 2005 | Decision |
| | Annual | |
| | Report | |
| | Page No. | |
| | | |
| | | |
---------------------------------------------------------------------
|------+---------------------------------+-----------+-------+-------|
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform|
| n | | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1308 |Electric Transmission Property | 38 | PIT | CORP |
| |Treated As 15-year Property | | | |
AB 1580 - Committee on Revenue and Taxation
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| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1309 |Expansion of Amortization For | 40 | X | |
| |Certain Atmospheric Pollution | | | |
| |Control Facilities In Connection | | | |
| |With Plants First Placed in | | | |
| |Service after 1975 | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1310 |Modification to Special Rules | 41 | X | |
| |For Nuclear Decommissioning Cost | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1323 |Temporary Expensing for | 50 | | X |
| |Equipment Used in Refining | | | |
| |Liquids Fuels | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1324 |Pass Through to Owners of | 54 | | X |
| |Deduction for Capital Costs | | | |
| |Incurred By Small Refiner | | | |
| |Cooperatives in Complying With | | | |
| |EPA Sulfur Regulations | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1325 |Natural Gas Distribution Lines | 57 | PIT | CORP |
| |Treated As 15-Year Property | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1326 |Natural Gas Gathering Lines | 59 | PIT | CORP |
| |Treated As 7-Year Property | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1328 |Determination of Small Refiner | 67 | | X |
| |Exception to Oil Depletion | | | |
| |Deduction | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1329 |Amortization of Geological and | 68 | | X |
| |Geophysical Expenditures | | | |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1331 |Energy Efficient Commercial | 71 | | X |
| |Buildings Deduction | | | |
AB 1580 - Committee on Revenue and Taxation
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| | | | | |
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| 1351 |Expansion of Research Credit | 101 | | X |
| | | | | |
|------+---------------------------------+-----------+-------+-------|
| 1363 |Modification of Recapture Rules | 107 | X | |
| |for Amortizable Section 197 | | | |
| |Intangibles | | | |
| | | | | |
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| |
| Table 5 - GO Zone Act of 2005 (PL 109-135) |
| |
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----------------------------------------------------------------------
| |FTB's 2005 | Decision |
| | Annual | |
| | Report | |
| | Page No. | |
| | | |
| | | |
----------------------------------------------------------------------
|------+----------------------------------+-----------+-------+-------|
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform|
| n | | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|101-F |Expensing for Certain Demolition | 182 | | X |
| |and Clean-up Costs | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|101-O |Treatment of Public Utility | 203 | | X |
| |Disaster Losses | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
| 303 |Modification of Effective Date of | 253 | X | |
| |Exception from Suspension Rules | | | |
| |for Certain Listed and Reportable | | | |
AB 1580 - Committee on Revenue and Taxation
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| |Transactions | | | |
| | | | | |
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| 305 |Disclosures of Certain Tax Return | 256 | | X |
| |Information | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|401-42|Tax Technical Provisions | 261 | X | |
| 3 | | | | |
| | | | | |
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2006 Conformity Decisions
These tables contain only items for which a conformity
decision was necessary.
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| |
| Table 1 - TIPRA of 2005 (PL 109-222) |
| |
| |
| |
---------------------------------------------------------------------
----------------------------------------------------------------------
| |FTB's 2006 |Decision |
| | Annual | |
| | Report | |
| | Page No. | |
| | | |
| | | |
----------------------------------------------------------------------
|------+----------------------------------+-----------+-------+-------|
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform|
| n | | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
AB 1580 - Committee on Revenue and Taxation
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|Title |OTHER PROVISIONS | | | |
|II | | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|201 |Clarification of Taxation of | 23 | X | |
| |Certain Settlement Funds | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|202 |Modification of Active Business | 25 | X | |
| |Definition under Section 355 | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|204 |Capital Gains Treatment for | 31 | X | |
| |Certain Self-Created Musical | | | |
| |Works | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|207 |Amortization of Expenses Incurred | 38 | X | |
| |in Creating or Acquiring Music or | | | |
| |Music Copyrights | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|209 |Modification of Treatment of | 43 | X | |
| |Loans to Qualified Continuing | | | |
| |Care Facilities | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|Title |REVENUE OFFSET PROVISIONS | | | |
|V | | | | |
| | | | | |
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|501 |Application of Earnings Stripping | 50 | X | |
| |Rules to Partners Which are | | | |
| |Corporations | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|503 |5-Year Amortization of Geological | 53 | |X |
| |and Geophysical Expenditures for | | | |
| |Certain Major Integrated Oil | | | |
| |Companies | | | |
| | | | | |
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AB 1580 - Committee on Revenue and Taxation
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| |
| Table 1 - TIPRA of 2005 (PL 109-222) |
| |
| |
| |
---------------------------------------------------------------------
|------+----------------------------------+-----------+-------+-------|
|507 |Section 355 Not to Apply to | 65 | X | |
| |Distributions Involving | | | |
| |Disqualified Investment Companies | | | |
| | | | | |
|------+----------------------------------+-----------+-------+-------|
|510 |Increase in Age of Minor Children | 75 | X | |
| |Whose Unearned Income is Taxed as | | | |
| |if Parent's Income | | | |
| | | | | |
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---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- ----------------------------------------------------------------------
----------------------------------------------------------------------
| Table 4 - Pension Protection Act of 2006 (PPA) (PL 109-280) |
| |
----------------------------------------------------------------------
----------------------------------------------------------------------
| |FTB's 2006 | Decision |
| | Annual | |
| | Report | |
| | Page No. | |
| | | |
AB 1580 - Committee on Revenue and Taxation
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| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform |
| n | | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|Title |REFORM OF FUNDING FOR | |
| I |SELF-EMPLOYED DEFINED BENEFIT | |
| |PENSION PLANS | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 112 |Minimum Funding Standards; | 103 | X | |
| |Funding Rules for Single-Employer | | | |
| |Defined Benefit Pension Plans | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 113 |Benefit Limitations Under | 125 | X | |
| |Single-Employer Plans | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|Title |FUNDING RULES FOR MULTIEMPLOYER | |
| II |DEFINED BENEFIT PENSION PLANS | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 211 |Funding Rules for Multiemployer | 143 | X | |
| |Defined Benefit Plans | | | |
| | | | | |
----------------------------------------------------------------------
| 212 |Additional Funding Rules for | 151 | X | |
| |Multiemployer Plans in Endangered | | | |
| |or Critical Status | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 221 |Sunset of Additional Funding | 177 | X | |
| |Rules | | | |
| | | | | |
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AB 1580 - Committee on Revenue and Taxation
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|Title |PENSION RELATED REVENUE | |
| VIII |PROVISIONS | |
| | | |
|------+----------------------------------+----------------------------|
|Subtit|Improvements in Portability, | |
| le C |Distributions, and Contribution | |
| |Rules | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 827 |Penalty-Free Withdrawals from | 290 | X | |
| |Retirement Plans for Individuals | | | |
| |Called to Active Duty for at | | | |
| |Least 179 Days | | | |
| | | | | |
----------------------------------------------------------------------
| 828 |Waiver of 10% Early Withdrawal | 293 | X | |
| |Penalty Tax on Certain | | | |
| |Distributions of Pension Plans | | | |
| |for Public Safety Employees | | | |
| | | | | |
----------------------------------------------------------------------
| 831 |Allowance of Additional IRA | 298 | X | |
| |Payments in Certain Bankruptcy | | | |
| |Cases | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 833 |Inflation Indexing of Gross | 301 | X | |
| |Income Limitations on Certain | | | |
| |Retirement Savings Incentives | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|Subtit|Health and Medical Benefits | |
| le D | | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 844 |Treatment of Annuity and Life | 315 | | X |
| |Insurance Contracts with a | | | |
| |Long-Term Care Insurance Feature | | | |
| | | | | |
----------------------------------------------------------------------
|Subtit|Other Provisions | | | |
AB 1580 - Committee on Revenue and Taxation
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| le F | | | | |
| | | | | |
----------------------------------------------------------------------
| 863 |Treatment of Death Benefits from | 335 | X | |
| |Corporate-Owned Life Insurance | | | |
| | | | | |
----------------------------------------------------------------------
| 866 |Exemption of Income from | 345 | X | |
| |Leveraged Real Estate Held by | | | |
| |Church Plans | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 868 |Gratuitous Transfer for Benefits | 348 | X | |
| |of Employees | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|Title |PROVISIONS RELATING TO EXEMPT | |
| XII |ORGANIZATIONS | |
| | | |
----------------------------------------------------------------------
|Subtit|Reforming Exempt Organizations | |
| le B | | |
| | | |
|------+----------------------------------+----------------------------|
| Part |General Reforms | |
| 1 | | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| 1211 |Reporting on Certain Acquisitions | 429 | X | |
| |of Interests on Insurance | | | |
| |Contracts in Which Certain Exempt | | | |
| |Organizations Hold an Interest | | | |
| | | | | |
----------------------------------------------------------------------
| 1213 |Reform of Charitable | 437 | X | |
| |Contributions of Certain | | | |
| |Easements in Registered Historic | | | |
| |Districts and Reduced Deduction | | | |
| |for Portion of Qualified | | | |
| |Conservation Contribution | | | |
| |Attributable to Rehabilitation | | | |
| |Credit | | | |
AB 1580 - Committee on Revenue and Taxation
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| | | | | |
----------------------------------------------------------------------
| 1214 |Charitable Contributions for | 443 | X | |
| |Taxidermy Property | | | |
| | | | | |
----------------------------------------------------------------------
| 1215 |Recapture of Tax Benefit for | 446 | X | |
| |Charitable Contributions of | | | |
| |Exempt Use Property Not Used for | | | |
| |an Exempt Use | | | |
| | | | | |
----------------------------------------------------------------------
| 1216 |Limitation of Deduction for | 451 | X | |
| |Charitable Contributions of | | | |
| |Clothing and Household Items | | | |
| | | | | |
----------------------------------------------------------------------
| 1217 |Modification of Recordkeeping | 455 | X | |
| |Requirements for Certain | | | |
| |Charitable Contributions | | | |
| | | | | |
----------------------------------------------------------------------
| 1218 |Contributions of Fractional | 457 | X | |
| |Interests in Tangible Personal | | | |
| |Property | | | |
| | | | | |
----------------------------------------------------------------------
| 1219 |Provisions Relating to | 460 | X | |
| |Substantial and Gross | | | |
| |Overstatements of Valuations | | | |
| | | | | |
----------------------------------------------------------------------
| 1220 |Additional Standards for Credit | 465 | X | |
| |Counseling Organizations | | | |
| | | | | |
----------------------------------------------------------------------
| 1222 |Definition of Convention or | 479 | X | |
| |Association of Churches | | | |
| | | | | |
|------+----------------------------------+-----------+-------+--------|
| 1223 |Notification Requirement for | 481 | X | |
| |Entities Not Currently Required | | | |
| |to File | | | |
| | | | | |
AB 1580 - Committee on Revenue and Taxation
Page 2
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----------------------------------------------------------------------
| Part |Improved Accountability of Donor | |
| 2 |Advised Funds | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|1231-1|Excise Taxes Relating to Donor | 492 | | X |
| 235 |Advised Funds, Excess Benefit | | | |
| |Transactions Involving Donor | | | |
| |Advised Funds and Sponsoring | | | |
| |Organizations, Excess Business | | | |
| |Holdings of Donor Advised Funds, | | | |
| |Returns of, and Application for | | | |
| |Recognition by Sponsoring | | | |
| |Organizations | | | |
| | | | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
| Part |Improved Accountability of | |
| 3 |Supporting Organizations | |
| | | |
----------------------------------------------------------------------
----------------------------------------------------------------------
|1241-1|Requirements for Supporting | 510 | |X |
| 245 |Organizations, Excess Benefit | | | |
| |Transactions Involving Supporting | | | |
| |Organizations, Excess Business | | | |
| |Holding of Supporting | | | |
| |Organizations, Treatment of | | | |
| |Amounts Paid to Supporting | | | |
| |Organizations by Private | | | |
| |Foundations, and Returns of | | | |
| |Supporting Organizations | | | |
| | | | | |
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| |
AB 1580 - Committee on Revenue and Taxation
Page 2
| Table 5 - TRHCA of 2006 (PL 109-432) |
| |
| |
| |
---------------------------------------------------------------------
----------------------------------------------------------------------
| | FTB's Annual | Decision |
| | Report Page | |
| | No. | |
| | | |
| | | |
| | | |
----------------------------------------------------------------------
---------------------------------------------------------------------
| Act | Provisions | |Conform| Not |
|Sectio| | | |Conform|
| n | | | | |
| | | | | |
---------------------------------------------------------------------
---------------------------------------------------------------------
|Divisi|Extension and Expansion of | |
| on A |Certain Tax Relief Provisions | |
| |and Other Tax Provisions | |
| | | |
|------+------------------------------+-------------------------------|
|Title |EXTENSION AND MODIFICATION OF | |
| I |CERTAIN PROVISIONS | |
| | | |
---------------------------------------------------------------------
---------------------------------------------------------------------
| 104 |Extension and Modification of | 538 | | X |
| |Research Credit | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 122B |Disclosure of Return | 577 | | X |
| |Information Regarding | | | |
| |Terrorist Activity | | | |
| | | | | |
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|Title |ENERGY TAX PROVISIONS | |
| II | | |
| | | |
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AB 1580 - Committee on Revenue and Taxation
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|------+------------------------------+---------------+-------+-------|
| 204 |Deduction for Energy | 589 | | X |
| |Efficient Commercial | | | |
| |Buildings | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 209 |Special Depreciation | 597 | | X |
| |Allowance for Cellulosic | | | |
| |Biomass Ethanol Plant | | | |
| |Property | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
|Title | OTHER PROVISIONS | | | |
| IV | | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 402 |Credit for Prior Year Minimum | 616 | | X |
| |Tax Liability Made Refundable | | | |
| |After Period of Years | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 404 |Partial Expensing for Advance | 620 | | X |
| |Mine Safety Equipment | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 406 |Whistleblower Reforms | 624 | | X |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 407 |Frivolous Tax Submissions | 626 | X | |
| | | | | |
---------------------------------------------------------------------
| 409 |Clarification of Taxation of | 629 | X | |
| |Certain Settlement Funds Made | | | |
| |Permanent - Effective in | | | |
| |Taxable Year 2011. | | | |
| | | | | |
---------------------------------------------------------------------
| 410 |Modification of Active | 630 | X | |
| |Business Definition Under | | | |
| |Section 355 Made Permanent - | | | |
| |Effective in Taxable Year | | | |
| |2011. | | | |
| | | | | |
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AB 1580 - Committee on Revenue and Taxation
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| 412 |Capital Gains Treatment for | 635 | X | |
| |Certain Self-Created Musical | | | |
| |Works Made Permanent | | | |
| | | | | |
---------------------------------------------------------------------
| 417 |Exclusion of Gain from Sale | 648 | X | |
| |of Principal Residence by | | | |
| |Certain Employees of the | | | |
| |Intelligence Community | | | |
| | | | | |
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| 418 |Sale of Property by Judicial | 650 | X | |
| |Officers | | | |
| | | | | |
---------------------------------------------------------------------
| 424 |Modification of Excise Tax on | 661 | | X |
| |Unrelated Business Taxable | | | |
| |Income of Charitable | | | |
| |Remainder Trusts | | | |
| | | | | |
---------------------------------------------------------------------
| 425 |Loans to Qualified Continuing | 662 | X | |
| |Care Facilities Made | | | |
| |Permanent - Effective in | | | |
| |Taxable Year 2011 | | | |
| | | | | |
|------+------------------------------+---------------+-------+-------|
| 426 |Technical Corrections | 664 | X | |
| | | | | |
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2007 Conformity Decisions
These tables contain only items for which a conformity
decision was necessary.
AB 1580 - Committee on Revenue and Taxation
Page 2
------------------------------------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------------
------------------------------------------------------------------- ------------------------------------------------------------------- --------------------------------------------------------------------
------------------------------------------------------------------- ------------------------------------------------------------------- --------------------------------------------------------------------
-------------------------------------------------------------------
| |
| |
| Table 4 - The Mortgage Forgiveness Debt Relief Act (MFDRA) (PL |
| 110-142) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2007 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
|------+--------------------------+-----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Sectio| | | | Conform |
| n | | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|1 - 2 |Exclusion of discharge of | 66 | SB 1055 | |
| |principal residence | |(2007/2008)| |
AB 1580 - Committee on Revenue and Taxation
Page 2
| |indebtedness | | | |
|------+--------------------------+-----------+-----------+---------|
| 3 |Extension of deduction | 68 | | X |
| |for private mortgage | | | |
| |insurance | | | |
|------+--------------------------+-----------+-----------+---------|
| 4 |Change in tests to | 70 | X | |
| |qualify as cooperative | | | |
| |housing corporation | | | |
|------+--------------------------+-----------+-----------+---------|
| 5 |Exclusion from income for | 71 | X | |
| |benefits provided to | | | |
| |volunteer EMS and | | | |
| |firefighters | | | |
|------+--------------------------+-----------+-----------+---------|
| 6 |Modify the prohibition | 74 | X | |
| |against full-time | | | |
| |students from qualifying | | | |
| |for LIHTC unit | | | |
|------+--------------------------+-----------+-----------+---------|
| 7 |Allow surviving spouse to | 76 | X | |
| |exclude from gross income | | | |
| |up to $500,000 of the | | | |
| |gain from sale of | | | |
| |principal residence if | | | |
| |the sale occurs within 2 | | | |
| |years of the death of the | | | |
| |spouse | | | |
-------------------------------------------------------------------
| 8 |Increase penalty for | 77 | X | |
| |failure to file | | | |
| |partnership returns | | (20% of | |
| | | | federal | |
| | | | penalty) | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
| 9 |Impose a penalty for | 79 | X | |
| |failure to file S | | | |
| |corporation returns | | (20% of | |
| | | | federal | |
| | | | penalty) | |
| | | | | |
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AB 1580 - Committee on Revenue and Taxation
Page 2
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| |
| Table 6 - The Tax Technical Corrections Act of 2007 (PL 110-172) |
| |
------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2007 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
------------------------------------------------------------------
| | | | Conform | Not |
| | | | |Conform |
| | | | | |
|------+--------------------------+-----------+-----------+--------|
| |The Tax Technical | 85 | X | |
| |Correction Act of 2007 | | | |
| |(TTCA) | | | |
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2008 Conformity Decisions
These tables contain only items for which a conformity
decision was necessary.
-------------------------------------------------------------------
| |
| |
| Table 2 - Heartland, Habitat, Harvest, and Horticulture Act of |
| 2008 (HHHHA)(PL 110-246) |
| |
| |
| |
AB 1580 - Committee on Revenue and Taxation
Page 2
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| | |FTB's 2008 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
|------+--------------------------+-----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Sectio| | | | Conform |
| n | | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|15302 |Two-Year Extension of | 17 | X | |
| |Special Rule Encouraging | | | |
| |Contributions of Capital | | | |
| |Gain Real Property For | | | |
| |Conservation Purposes | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|15303 |Deduction for Endangered | 21 | X | |
| |Species | | | |
| | | | | |
| |Recovery Expenditures | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|15344 |Three Year Depreciation | 46 | PIT | CORP |
| |for Race Horses | | | |
| | | | | |
| |That are Two Years Old or | | | |
| |Younger | | | |
| | | | | |
-------------------------------------------------------------------
|15351 |Limitation of Excess Farm | 52 | | X |
| |Losses of Certain | | | |
| |Taxpayer | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|15353 |Information Reporting for | 56 | X | |
| |Commodity Credit | | | |
| |Corporation Transactions | | | |
| | | | | |
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AB 1580 - Committee on Revenue and Taxation
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| |
| |
| Table 3 - Heroes Earnings Assistance and Relief Tax Act of 2008 |
| (HEARTA)(PL 110-245) |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2008 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
|------+--------------------------+-----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Sectio| | | | Conform |
| n | | | | |
| | | | | |
-------------------------------------------------------------------
| 107 |Distribution from | 75 | X | |
| |Retirement Plans to | | | |
| |Individuals Called to | | | |
| |Active Duty | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
| 109 |Contributions of Military | 78 | X | |
| |Death Gratuities to Roth | | | |
| |IRAs and Education | | | |
| |Savings Accounts | | | |
| | | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| Table 3 - Heroes Earnings Assistance and Relief Tax Act of 2008 |
| (HEARTA)(PL 110-245) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
AB 1580 - Committee on Revenue and Taxation
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| 110 |Suspension of 5-Year | 82 | X | |
| |Period during Service | | | |
| |with the Peace Corps | | | |
| | | | | |
-------------------------------------------------------------------
| 112 |State Payments to Service | 86 | X | |
| |Members Treated as | | | |
| |Qualified Military | | | |
| |Benefits | | | |
| | | | | |
-------------------------------------------------------------------
| 113 |Permanent Exclusion of | 87 | X | |
| |Gain from Sale of a | | | |
| |Principal Residence by | | | |
| |Certain Employees of the | | | |
| |Intelligence Community | | | |
| | | | | |
-------------------------------------------------------------------
| 114 |Special Disposition Rules | 89 | X | |
| |for Unused Benefits in | | | |
| |Health Flexible Spending | | | |
| |Arrangements of | | | |
| |Individuals Called to | | | |
| |Active Duty | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
| 303 |Increase in Minimum | 108 | X | |
| |Penalty on Failure to | | | |
| | | | | |
| |File a Return of Tax | | | |
| | | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| |
| |
| Table 4 - Housing and Economic Recovery Act of 2008 (HERA)(PL |
| 110-289) |
| |
AB 1580 - Committee on Revenue and Taxation
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| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2008 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
|------+--------------------------+-----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Sectio| | | | Conform |
| n | | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
|3001-3|Various Housing Tax | 111 | X | |
| 005 |Incentives Related to the | | | |
| |Low-Income Housing Tax | | | |
| |Credit | | | |
| | | | | |
-------------------------------------------------------------------
| 3091 |Returns relating to | 182 | X | |
| |Payments made in | | | |
| |Settlement of Payment | | | |
| |Card and Third-Party | | | |
| |Network Transactions | | | |
| | | | | |
|------+--------------------------+-----------+-----------+---------|
| 3092 |Gain from Sale of | 185 | X | |
| |Principal Residence | | | |
| |Allocated to Nonqualified | | | |
| |Use Not Excluded from | | | |
| |Income | | | |
| | | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| |
AB 1580 - Committee on Revenue and Taxation
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| |
| Table 5 - Hubbard Act of 2008 (PL 110-317) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | |FTB's 2008 | Decision |
| | | Annual | |
| | | Report | |
| | | Page No. | |
| | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| Act |Provisions | | Conform | Not |
|Section | | | | Conform |
| | | | | |
|--------+------------------------+-----------+-----------+---------|
| 9 |Repeal of Dollar | 194 | X | |
| |Limitation on | | | |
| |Contributions to | | | |
| |Funeral Trusts | | | |
| | | | | |
-------------------------------------------------------------------
-------------------------------------------------------------------
| |
| |
| Table 6 - Emergency Economic Stabilization Act of 2008 (EESA)(PL |
| 110-343) |
| |
| |
| |
-------------------------------------------------------------------
-------------------------------------------------------------------
| | | FTB's | Decision |
| | | 2008 | |
| | | Annual | |
| | | Report | |
| | | Page No. | |
AB 1580 - Committee on Revenue and Taxation
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| | | | |
-------------------------------------------------------------------
------------------------------------------------------------------
| Act |Provisions | | Conform | Not |
|Section | | | |Conform |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division A, Title III - Tax Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 301 |Gain or Loss from Sale | 195 | | X |
| |or Exchange of Certain | | | |
| |Preferred Stock | | | |
| | | | | |
------------------------------------------------------------------
| 302 |Special Rules for Tax | 198 | X | |
| |Treatment of Executive | | | |
| |Compensation of | | | |
| |Employers Participating | | | |
| |in the Troubled Assets | | | |
| |Relief Program | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 303 |Extension of Exclusion | 208 | X (With | |
| |of Income from | |Modificatio| |
| |Discharge of Qualified | | n to | |
| |Principal Residence | | Extension | |
| |Indebtedness | | of | |
| | | | Mortgage | |
| | | | Debt | |
| | | |Forgiveness| |
| | | | ) | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division B, Title I, Subtitle B - Carbon Mitigation and Coal |
|Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 116 |Certain Income and | 243 | X | |
| |Gains Relating to | | | |
| |Industrial Source | | | |
AB 1580 - Committee on Revenue and Taxation
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| |Carbon Dioxide Treated | | | |
| |as Qualifying Income | | | |
| |for Publicly Traded | | | |
| |Partnerships | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division B, Title II - Energy Production Incentives |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 201 |Inclusion of Cellulosic | 245 | | X |
| |Biofuel in Bonus | | | |
| |Depreciation for | | | |
| |Biomass Ethanol Plant | | | |
| |Property | | | |
| | | | | |
------------------------------------------------------------------
| 208 |Certain Income and | 266 | X | |
| |Gains Relating to | | | |
| |Alcohol Fuels and | | | |
| |Mixtures, Biodiesel | | | |
| |Fuels and Mixtures, and | | | |
| |Alternative Fuels and | | | |
| |Mixtures Treated as | | | |
| |Qualifying Income for | | | |
| |Publicly Traded | | | |
| |Partnerships | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 209 |Extension and | 268 | | X |
| |Modification of | | | |
| |Election to Expense | | | |
| |Certain Refineries | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division B, Title III - Energy Conservation and Efficiency |
|Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 303 |Energy Efficient | 281 | | X |
| |Commercial Buildings | | | |
AB 1580 - Committee on Revenue and Taxation
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| |Deduction | | | |
| | | | | |
------------------------------------------------------------------
| 306 |Accelerated Recovery | 289 | PIT | CORP |
| |Period for Depreciation | | | |
| |of Smart Meters and | | | |
| |Smart Grid Systems | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 308 |Special Depreciation | 293 | | X |
| |Allowance for Certain | | | |
| |Reuse and Recycling | | | |
| |Property | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title II - Extension of Individual Tax Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 204 |Additional Standard | 323 | | X |
| |Deduction for Real | | | |
| |Property Taxes for | | | |
| |Nonitemizers | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title III - Extension of Business Tax Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 301 |Extension and | 335 | | X |
| |Modification of | | | |
| | | | | |
| |Research Credit | | | |
| | | | | |
------------------------------------------------------------------
| 305 |Extension of 15-Year | 350 | | X |
| |Straight-Line Cost | | | |
| |Recovery for Qualified | | | |
| |Leasehold Improvements | | | |
| |and Qualified | | | |
| |Restaurant | | | |
| |Improvements; 15-Year | | | |
AB 1580 - Committee on Revenue and Taxation
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| |Straight Line | | | |
| | | | | |
| |Cost Recovery for | | | |
| |Certain Improvements | | | |
| | | | | |
| |to Retail Space | | | |
| | | | | |
------------------------------------------------------------------
| 306 |Modification of Tax | 354 | X | |
| |Treatment of Certain | | | |
| |Payments to Controlling | | | |
| |Exempt Organizations | | | |
| | | | | |
------------------------------------------------------------------
| 307 |Basis Adjustment to | 356 | X | |
| |Stock of S Corporations | | | |
| |Making Charitable | | | |
| |Contributions of | | | |
| |Property | | | |
| | | | | |
------------------------------------------------------------------
| 311 |Extension of Election | 363 | | X |
| |to Expense Advanced | | | |
| |Safety Mine Equipment | | | |
| | | | | |
------------------------------------------------------------------
| 317 |Seven-Year Cost | 376 | | X |
| |Recovery Period for | | | |
| |Motorsports Racing | | | |
| |Track Facility | | | |
| | | | | |
------------------------------------------------------------------
| 323 |Enhanced Charitable | 386 | | X |
| |Deductions for | | | |
| |Contributions of Food | | | |
| |Inventory | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 324 |Extension of Enhanced | 388 | | X |
| |Charitable Deduction | | | |
| |for Contributions of | | | |
| |Book Inventory | | | |
| | | | | |
------------------------------------------------------------------
AB 1580 - Committee on Revenue and Taxation
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-------------------------------------------------------------------
|EESA Division C, Title IV - Extension of Tax Administration |
|Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 402 |Permanent Authority for | 392 | | X |
| |Disclosure of | | | |
| |Information Relating to | | | |
| |Terrorists Activities | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title V, Subtitle A - General Provisions |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 505 |Certain Farming | 401 | | X |
| |Business Machinery and | | | |
| |Equipment Treated as | | | |
| |5-Year Property | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 506 |Modification of Penalty | 403 | X (With | |
| |on Understatement of | |Modificatio| |
| |Taxpayer's Liability by | | ns) | |
| |Tax Return Preparer | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title VII, Subtitle A - Heartland and Hurricane |
|Ike Disaster Relief |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 703 |Reporting Requirements | 409 | X | |
| |Relating to Disaster | | | |
| |Relief Contributions | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title VII, Subtitle B - National Disaster Relief |
| |
-------------------------------------------------------------------
AB 1580 - Committee on Revenue and Taxation
Page 2
------------------------------------------------------------------
| 706 |Losses Attributable to | 411 | | X |
| |Federally Declared | | | |
| |Disasters | | | |
| | | | | |
------------------------------------------------------------------
| 707 |Expensing of Qualified | 413 | | X |
| |Disaster Expenses | | | |
| | | | | |
------------------------------------------------------------------
| 708 |Net Operating Losses | 417 | | X |
| |Attributable to | | | |
| |Federally Declared | | | |
| |Disasters | | | |
| | | | | |
------------------------------------------------------------------
| 710 |Special Depreciation | 425 | | X |
| |Allowance for Qualified | | | |
| |Disaster Property | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 711 |Increased Expensing for | 429 | | X |
| |Qualified Disaster | | | |
| |Assistance Property | | | |
| | | | | |
------------------------------------------------------------------
-------------------------------------------------------------------
|EESA Division C, Title VIII - Spending Reductions and Appropriate |
|Revenue Raisers for New Tax Policy Relief |
| |
-------------------------------------------------------------------
------------------------------------------------------------------
| 801 |Nonqualified Deferred | 431 | | X |
| |Compensation from | | | |
| |Certain Tax Indifferent | | | |
| |Parties | | | |
| | | | | |
------------------------------------------------------------------
AB 1580 - Committee on Revenue and Taxation
Page 2
-------------------------------------------------------------------
| |
| |
| Table 7 - Worker, Retiree, and Employer Recovery Act of 2008 |
| (WRERA)(PL 110-458) |
| |
| |
| |
-------------------------------------------------------------------
|--------+------------------------+----------+-----------+---------|
| | | FTB's | Decision | |
| | | 2008 | | |
| | | Annual | | |
| | | Report | | |
| | | Page No. | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| Act |Provisions | | Conform | Not |
|Section | | | | Conform |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 124 |Treatment of Certain | 457 | X | |
| |Reimbursements from | | | |
| |Governmental Plans for | | | |
| |Medical Care | | | |
| | | | | |
|--------+------------------------+----------+-----------+---------|
| 127 |Modification of Penalty | 462 | X | |
| |for Failure to File | | (20% of | |
| |Partnership Returns | | the | |
| | | | federal | |
| | | | penalty) | |
|--------+------------------------+----------+-----------+---------|
| 128 |Modification of Penalty | 464 | X | |
| |for Failure to File S | | (20% of | |
| |Corporation Returns | | the | |
| | | | federal | |
| | | | penalty) | |
------------------------------------------------------------------
FISCAL EFFECT:
AB 1580 - Committee on Revenue and Taxation
Page 2
Revenue estimate pending (to be revised August 24,
2009)
COMMENTS:
A. Purpose of the Bill
According to the author's office, "The purpose of the
bill is to conform to numerous changes in federal law to
simplify the preparation of California income tax returns."
B. What's New?
The Author amended AB 1580 on August 18th to change
the author from the Committee on Revenue and Taxation to
Assemblymember Calderon, make technical changes, and alter
the measure in the following ways. Changes are noted in
the conformity tables above in bold underline .
Modifications :
Mortgage Debt Forgiveness - AB 1580 as amended
increases the limit of qualified principal mortgage
indebtedness a taxpayer may exclude from income if the
lender forgives indebtedness from $125,000 (married
filing separate)/$250,000 (single, married filing
joint) to $250,000 (married filing separate)/$500,000
(single, married filing joint) as discussed in Comment
D of the Committee's analysis of the measure when
heard on July 8, 2009. SEC. 13 (page 26, line 2).
Preparer Penalty - The June 26th, 2009 version of
the measure conformed to stricter standards for
penalties applied to tax preparers enacted by the
Small Business Work Opportunity Act (SBWOTA) of 2007,
which were subsequently lowered by the Emergency
Economic Stabilization Act of 2008. AB 1580 as
amended conforms to the most recent federal change.
AB 1580 - Committee on Revenue and Taxation
Page 2
SEC. 43 (page 56, line 36).
Changing from Conform to Not Conform :
Motorsport Racing Track Recovery and Farming
Business Machinery Recovery - AB 1580 as amended does
not conform to these sections. SEC. 18 (page 31, line
4).
Contributions of Food Inventory - AB 1580 as
amended does not conform to these sections. SEC. 23.5
(page 33, line 1) and SEC. 68 (page 96, line 25).
Contributions of Book Inventory - AB 1580 as
amended does not conform to these sections. SEC. 23.7
(page 33, line 6) and SEC. 69 (page 97, line 39).
Small Refiner Exception - AB 1580 as amended does
not conform to these sections. SEC. 29.5 (page 42,
line 36) and SEC. 70.5 (page 107, line 28).
Changing from Not Conform to Conform :
Penalty on Erroneous Refund Claims - AB 1580 as
amended conforms to the erroneous claims for refund
penalty, as discussed in Comment C of the Committee's
analysis of the measure when heard on July 8, 2009.
SEC. 42.5 (page 56, line 13).
C. Don't Say You Love Me, Show Me You Love Me
California last conformed to changes in federal law in
2005 (AB 115, Klehs). Since then, the Legislature has not
conformed state tax law to federal law for several reasons.
First, some federal changes may have significant fiscal
impacts for the state, and unlike the Federal government,
California cannot neither print nor issue Treasury notes
and bills to subsidize its budget. With estimates showing
that the U.S. Treasury will have to borrow for
approximately one-third of total federal outlays in the
AB 1580 - Committee on Revenue and Taxation
Page 2
next fiscal year, the Legislature must ostensibly make
tradeoffs when considering conformity to federal tax laws
which do not trigger significant fiscal concerns in
Congress. In other instances, certain federal changes have
undesirable policy outcomes that the state tax code should
not encourage, such as Health Savings Accounts. Last year,
the conformity bill resulted in an increase in state taxes,
triggering the 2/3 vote requirement in Article XIIIA of the
State Constitution, and the measure did not advance from
the Senate Floor (AB 1561, Calderon). The Legislature
continues to struggle with tax conformity, despite repeated
and loud calls from tax practitioners, who find preparing
returns and dispensing advice more and more complex as
federal and state tax laws drift further apart over time.
AB 1580 is the most recent attempt to ease the hardship on
taxpayers and practitioners by bringing the two tax codes
closer together.
Support and Opposition
Support:None received
Oppose:None received
---------------------------------
Consultant: Colin Grinnell