BILL ANALYSIS �
AB 318
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Date of Hearing: January 19, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 318 (Skinner) - As Amended: January 4, 2012
Policy Committee: Revenue and
Taxation Vote: 9-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill makes California's income tax laws consistent with
federal tax law regarding the definition of a legal holiday and
the due dates for filing tax returns and making payments.
FISCAL EFFECT
According to Franchise Tax Board (FTB) staff, this bill will not
impact state income tax revenues and will not significantly
impact the FTB's programs and operations.
COMMENTS
1)Purpose . This bill is sponsored by FTB to modify the filing
and payment due dates to mirror federal holiday due date
extensions. According to the FTB, AB 318 is needed to codify
the filing and payment due dates in order to eliminate
taxpayer confusion when there is a federally recognized
holiday that changes the due date for federal income tax
returns. When that occurs, FTB changes the due dates on forms
and instructions, by an administrative process without
explicit statutory authority. FTB also notes that a federal
return is required for filing a state return.
2)Background . Under federal tax law, the Internal Revenue
Service (IRS) is authorized to extend the due dates for filing
returns and making payments when a due date falls on a
Saturday, Sunday or legal holiday. The definition of a legal
holiday includes any statewide legal holiday in a state,
including the District of Columbia, where an IRS office is
located. The District of Columbia celebrates Emancipation Day
AB 318
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on April 16, the day after the April 15 statutory due date for
filing most personal income tax returns and making certain
tax-related payments.
In California, Emancipation Day is not recognized as a legal
holiday. Consequently, if Emancipation Day or any other
federal holiday that is not recognized in California falls on
the due date for filing a tax return, California and federal
income tax returns may have different due dates. FTB reports
that, in the case of the Emancipation Day holiday, California
and the federal due dates will be different eight times in the
next 19 years. In each of these cases, the FTB will have to
undertake an administrative process to change the due date and
taxpayers will not know the due date with certainty until the
FTB process is completed.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081