BILL ANALYSIS �
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THIRD READING
Bill No: AB 2754
Author: Assembly Revenue and Taxation Committee
Amended: 6/16/14 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 4-2, 6/25/14
AYES: Wolk, DeSaulnier, Hernandez, Liu
NOES: Knight, Walters
NO VOTE RECORDED: Beall
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 55-20, 5/29/14 - See last page for vote
SUBJECT : Franchise Tax Board: credits: electronic filing
SOURCE : Author
DIGEST : This bill requires that the dependents tax
identification number be included on a return when claiming a
Dependent Exemption Credit, requires a business entity that
prepares a return using tax preparation software to file the
return electronically, and allows taxpayers to use specified tax
credits to reduce tentative minimum tax.
ANALYSIS : In 2013, Governor Brown signed the Governor's
Office of Business and Economic Development (GO-Biz) California
Competes Tax Credit as a part of the 2013 Budget plan to grant a
hiring credit under the Personal Income Tax (PIT) and
Corporation Tax (CT) for employment in specified geographic
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AB 2754
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are-as. GO-Biz allocates the tax credit.
Existing law does not require that the Taxpayer Identification
Number (TIN) of dependents be included on state tax returns to
take advantage of the dependent exemption. Existing law
prohibits the disallowance of the Dependent Exemption Credit if
the return lacks a TIN. The Legislature added this provision in
1997 following the Internal Revenue Code change that required
the TIN of dependents on the PIT return in response to concerns
about obtaining a TIN for newborns in time to include the TIN on
the return.
Federal law requires that the TIN of the dependent be included
on the federal return to take advantage of the dependent
exemption.
Existing law requires income tax preparers who prepare more than
100 California individual income tax returns annually or prepare
one or more using tax preparation software to e-file all PIT.
If the return is filed on paper that should have been e-filed,
there is a failure to e-file penalty of $50 per return, unless
it is shown that the failure to e-file is due to reasonable
cause and not due to willful neglect.
This bill makes the following changes to the tax law:
1. Allows taxpayers to use GO-Biz California Competes tax
credits to reduce tentative minimum tax.
2. Requires that the dependent's tax identification number be
included on a return when claiming a Dependent Exemption
Credit.
3. Requires a business entity that prepares a return using tax
preparation software to file the return electronically.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/1/14)
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AB 2754
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Franchise Tax Board
ASSEMBLY FLOOR : 55-20, 5/29/14
AYES: Achadjian, Alejo, Ammiano, Bloom, Bocanegra, Bonilla,
Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong,
Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall,
Roger Hern�ndez, Holden, Jones-Sawyer, Levine, Lowenthal,
Medina, Mullin, Muratsuchi, Nazarian, Pan, Perea, John A.
P�rez, V. Manuel P�rez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber,
Wieckowski, Williams, Yamada, Atkins
NOES: Allen, Bigelow, Ch�vez, Dahle, Donnelly, Fox, Beth
Gaines, Grove, Jones, Linder, Logue, Maienschein, Mansoor,
Melendez, Nestande, Olsen, Patterson, Wagner, Waldron, Wilk
NO VOTE RECORDED: Conway, Gorell, Hagman, Harkey, Vacancy
AB:d 8/6/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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