BILL NUMBER: AB 1935	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member De Leon

                        FEBRUARY 17, 2010

   An act to amend Section 25128.5 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1935, as introduced, De Leon. Corporate income tax: single
sales factor.
   The Corporation Tax Law imposes taxes measured by income and, in
the case of a business with income derived from or attributable to
sources both within and without this state, apportions the income
between this state and other states and foreign countries in
accordance with a specified 4-factor formula based on the property,
payroll, and sales within and without this state, except that in the
case of an apportioning trade or business that derives more than 50%
of its gross business receipts from conducting one or more qualified
business activities, as defined, business income is apportioned in
accordance with a specified 3-factor formula. Existing law, for
taxable years beginning on or after January 1, 2011, allows a
taxpayer to make an annual election to have that income apportioned
in accordance with a single sales factor formula, except as provided.

   This bill would, for a taxpayer that would otherwise be able to
elect to have its income apportioned in accordance with a single
sales factor formula, require the taxpayer to apportion its income in
accordance with a single sales factor formula.
   This bill would result in a change in state taxes for the purpose
of increasing state revenues within the meaning of Section 3 of
Article XIII A of the California Constitution, and thus would require
for passage the approval of 2/3 of the membership of each house of
the Legislature.
   This bill would take effect immediately as a tax levy.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 25128.5 of the Revenue and Taxation Code is
amended to read:
   25128.5.  (a) Notwithstanding Section 38006, for taxable years
beginning on or after January 1, 2011, any apportioning trade or
business, other than an apportioning trade or business described in
subdivision (b) of Section 25128,  may make an irrevocable
annual election on an original timely filed return, in the manner and
form prescribed by the Franchise Tax Board to   shall
 apportion its income in accordance with this section, and not
in accordance with Section 25128.
   (b) Notwithstanding Section 38006, for taxable years beginning on
or after January 1, 2011, all business income of an apportioning
trade or business  making an election  described in
subdivision (a) shall be apportioned to this state by multiplying the
business income by the sales factor.
   (c) The Franchise Tax Board is authorized to issue regulations
necessary or appropriate regarding the  making of an election
under   administration of  this section  ,
including regulations that are consistent with rules prescribed for
making an election under Section 25113  .
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.