BILL NUMBER: SB 1272 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 5, 2010
INTRODUCED BY Senator Wolk
FEBRUARY 19, 2010
An act to amend Section 23151 of add
Section 40 to the Revenue and Taxation Code, relating to
taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 1272, as amended, Wolk. Corporation taxes.
Income and corporation taxes: credits: information and operative
limitations.
Existing law imposes various taxes and allows specified credits,
deductions, exclusions, and exemptions in computing those taxes.
This bill would, for taxable years beginning on or after January
1, 2011, require any bill that would authorize a personal income or
corporation tax credit to contain, among other provisions, (1)
specified goals, purposes, and objectives that the tax credit will
achieve, (2) detailed performance indicators to measure whether the
tax credit is meeting those goals, purposes and objectives, and (3) a
requirement that the tax credit cease to be operative 5 years after
its enactment date, as specified.
The Corporation Tax Law requires every corporation, except as
provided, to pay a tax according to or measured by its net income or,
if greater, a specified minimum tax.
This bill would make technical, nonsubstantive changes to those
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares the
following:
(a) Government at all levels enact tax preferences to promote
equity among taxpayers and enhance economic growth in a way that is
inexpensive to administer and provide direct benefits to taxpayers.
(b) National and state public finance experts recommend that tax
preferences be evaluated alongside direct spending programs, as both
are public initiatives meant to accomplish specified goals.
(c) Revenue losses attributable to federal tax preferences exceed
any other category of federal spending, including defense, Medicaid
and Medicare, Social Security, debt service, or discretionary
spending.
(d) California now forgoes more than $41 billion in revenue from
tax preferences, according to the Department of Finance.
(e) Many current tax preferences contain neither sunset
provisions, nor goals and objectives to measure the performance of
the tax preference.
(f) Many current tax preferences neither require taxpayers to
submit data demonstrating the tax preference's effectiveness, nor for
state agencies to collect and send data to the Legislature to
evaluate the tax preference.
(g) The Legislature should apply the same level of review and
performance measure that it applies to spending programs to tax
preference programs, including tax credits.
SEC. 2. Section 40 is added to the
Revenue and Taxation Code , to read:
40. Notwithstanding any other law, any bill that would, for
taxable years beginning on or after January 1, 2011, authorize a
credit against the "net tax," as defined in Section 17039, or against
the "tax," as defined in Section 23036, or both, shall contain all
of the following:
(a) Specific goals, purposes, and objectives that the tax credit
will achieve.
(b) Detailed performance indicators for the Legislature to use
when measuring whether the tax credit meets the goals, purposes, and
objectives stated in the bill.
(c) Data collection requirements to enable the Legislature to
determine whether the tax credit is meeting, failing to meet, or
exceeding those specific goals, purposes, and objectives, including
the specific data to be collected and remitted, and the specific
taxpayers, state agencies, or other entities required to collect and
remit data.
(d) A requirement that the tax credit shall cease to be operative
five years after its enactment date, and as of that date is repealed.
SECTION 1. Section 23151 of the Revenue and
Taxation Code is amended to read:
23151. (a) With the exception of banks and financial
corporations, every corporation doing business within the limits of
this state and not expressly exempted from taxation by the California
Constitution or by this part, shall annually pay to the state, for
the privilege of exercising its corporate franchises within this
state, a tax according to or measured by its net income, to be
computed at the rate of 7.6 percent upon the basis of its net income
for the next preceding income year, or if greater, the minimum tax
specified in Section 23153.
(b) For calendar or fiscal years ending after June 30, 1973, the
rate of tax shall be 9 percent instead of 7.6 percent as provided by
subdivision (a).
(c) For calendar or fiscal years ending in 1980 to 1986,
inclusive, the rate of tax shall be 9.6 percent.
(d) For calendar or fiscal years ending in 1987 to 1996,
inclusive, and for any income year beginning before January 1, 1997,
the tax rate shall be 9.3 percent.
(e) For any income year beginning on or after January 1, 1997, the
tax rate shall be 8.84 percent. The change in rate provided in this
subdivision shall be made without proration otherwise required by
Section 24251.
(f) (1) For the first taxable year beginning on or after January
1, 2000, the tax imposed under this section shall be the sum of both
of the following:
(A) A tax according to or measured by net income, to be computed
at the rate of 8.84 percent upon the basis of the net income for the
next preceding income year, but not less than the minimum tax
specified in Section 23153.
(B) A tax according to or measured by net income, to be computed
at the rate of 8.84 percent upon the basis of the net income for the
first taxable year beginning on or after January 1, 2000, but not
less than the minimum tax specified in Section 23153.
(2) Except as provided in paragraph (1), for each taxable year
beginning on or after January 1, 2000, the tax imposed under this
section shall be a tax according to or measured by net income, to be
computed at the rate of 8.84 percent upon the basis of the net income
for that taxable year, but not less than the minimum tax specified
in Section 23153.