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| 1 | + | CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Senate Bill No. 437Introduced by Senator WilkFebruary 21, 2019 An act to amend Section 24651 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGESTSB 437, as introduced, Wilk. Corporation Tax Law: income: methods of accounting.The Corporation Tax Law imposes taxes upon, or measured by, income. Existing law requires the taxpayers income to be computed under a method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books, and authorizes the taxpayer to use specified accounting methods.This bill would make nonsubstantive changes to those provisions.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 24651 of the Revenue and Taxation Code is amended to read:24651. (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books.(b) If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of income shall be made under such method as, in the opinion of the Franchise Tax Board, does clearly reflect income.(c) Subject to subdivisions (a) and (b) and Section 24654, a taxpayer may compute income under any of the following methods of accounting accounting:(1) The cash receipts and disbursements method; method.(2) An accrual method; method.(3) Any other method permitted by this part; or part.(4) Any combination of the foregoing methods permitted under regulations prescribed by the Franchise Tax Board.(d) A taxpayer engaged in more than one trade or business may may, in computing income, use a different method of accounting for each trade or business.(e) Except as otherwise expressly provided in this part, a taxpayer who that changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board.(f) If the taxpayer does not file with the Franchise Tax Board a request to change the method of accounting, the absence of the consent of the Franchise Tax Board to a change in the method of accounting shall not be taken into account for either of the following:(1) To prevent the imposition of any penalty, or the addition of any amount to tax, under this part.(2) To diminish the amount of that penalty or addition to tax. | |
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| 3 | + | CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Senate Bill No. 437Introduced by Senator WilkFebruary 21, 2019 An act to amend Section 24651 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGESTSB 437, as introduced, Wilk. Corporation Tax Law: income: methods of accounting.The Corporation Tax Law imposes taxes upon, or measured by, income. Existing law requires the taxpayers income to be computed under a method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books, and authorizes the taxpayer to use specified accounting methods.This bill would make nonsubstantive changes to those provisions.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO | |
| 4 | 4 | ||
| 5 | - | Amended IN Senate March 26, 2019 | |
| 6 | 5 | ||
| 7 | - | Amended IN Senate March 26, 2019 | |
| 6 | + | ||
| 7 | + | ||
| 8 | 8 | ||
| 9 | 9 | CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION | |
| 10 | 10 | ||
| 11 | 11 | Senate Bill No. 437 | |
| 12 | 12 | ||
| 13 | 13 | Introduced by Senator WilkFebruary 21, 2019 | |
| 14 | 14 | ||
| 15 | 15 | Introduced by Senator Wilk | |
| 16 | 16 | February 21, 2019 | |
| 17 | 17 | ||
| 18 | - | An act to amend Section 24651 of the Revenue and Taxation Code, relating to taxation. | |
| 18 | + | An act to amend Section 24651 of the Revenue and Taxation Code, relating to taxation. | |
| 19 | 19 | ||
| 20 | 20 | LEGISLATIVE COUNSEL'S DIGEST | |
| 21 | 21 | ||
| 22 | 22 | ## LEGISLATIVE COUNSEL'S DIGEST | |
| 23 | 23 | ||
| 24 | - | SB 437, as | |
| 24 | + | SB 437, as introduced, Wilk. Corporation Tax Law: income: methods of accounting. | |
| 25 | 25 | ||
| 26 | - | The Personal Income Tax Law allows various credits against the taxes imposed by that law.This bill, for each taxable year beginning on or after January 1, 2020, would allow a credit against those taxes to qualified commuters in an amount equal to $500 for spouses filing joint returns, if both spouses are qualified commuters, as defined, and $250 for other specified taxpayers who are qualified commuters. The bill would restrict eligibility for the credit to taxpayers with specified incomes.The bill would require, for a taxpayer with an allowable credit in excess of tax liability, a payment from the Tax Relief and Refund Account, a continuously appropriated account, to the taxpayer equal to the amount of the allowable credit that is in excess of tax liability, as provided. By authorizing additional payments from this account, the bill would make an appropriation.The Corporation Tax Law imposes taxes upon, or measured by, income. Existing law requires the taxpayers income to be computed under a method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books, and authorizes the taxpayer to use specified accounting methods.This bill would make nonsubstantive changes to those provisions. | |
| 27 | - | ||
| 28 | - | The Personal Income Tax Law allows various credits against the taxes imposed by that law. | |
| 29 | - | ||
| 30 | - | This bill, for each taxable year beginning on or after January 1, 2020, would allow a credit against those taxes to qualified commuters in an amount equal to $500 for spouses filing joint returns, if both spouses are qualified commuters, as defined, and $250 for other specified taxpayers who are qualified commuters. The bill would restrict eligibility for the credit to taxpayers with specified incomes. | |
| 31 | - | ||
| 32 | - | The bill would require, for a taxpayer with an allowable credit in excess of tax liability, a payment from the Tax Relief and Refund Account, a continuously appropriated account, to the taxpayer equal to the amount of the allowable credit that is in excess of tax liability, as provided. By authorizing additional payments from this account, the bill would make an appropriation. | |
| 26 | + | The Corporation Tax Law imposes taxes upon, or measured by, income. Existing law requires the taxpayers income to be computed under a method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books, and authorizes the taxpayer to use specified accounting methods.This bill would make nonsubstantive changes to those provisions. | |
| 33 | 27 | ||
| 34 | 28 | The Corporation Tax Law imposes taxes upon, or measured by, income. Existing law requires the taxpayers income to be computed under a method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books, and authorizes the taxpayer to use specified accounting methods. | |
| 35 | 29 | ||
| 36 | - | ||
| 37 | - | ||
| 38 | 30 | This bill would make nonsubstantive changes to those provisions. | |
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| 40 | - | ||
| 41 | 31 | ||
| 42 | 32 | ## Digest Key | |
| 43 | 33 | ||
| 44 | 34 | ## Bill Text | |
| 45 | 35 | ||
| 46 | - | The people of the State of California do enact as follows:SECTION 1. Section | |
| 36 | + | The people of the State of California do enact as follows:SECTION 1. Section 24651 of the Revenue and Taxation Code is amended to read:24651. (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books.(b) If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of income shall be made under such method as, in the opinion of the Franchise Tax Board, does clearly reflect income.(c) Subject to subdivisions (a) and (b) and Section 24654, a taxpayer may compute income under any of the following methods of accounting accounting:(1) The cash receipts and disbursements method; method.(2) An accrual method; method.(3) Any other method permitted by this part; or part.(4) Any combination of the foregoing methods permitted under regulations prescribed by the Franchise Tax Board.(d) A taxpayer engaged in more than one trade or business may may, in computing income, use a different method of accounting for each trade or business.(e) Except as otherwise expressly provided in this part, a taxpayer who that changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board.(f) If the taxpayer does not file with the Franchise Tax Board a request to change the method of accounting, the absence of the consent of the Franchise Tax Board to a change in the method of accounting shall not be taken into account for either of the following:(1) To prevent the imposition of any penalty, or the addition of any amount to tax, under this part.(2) To diminish the amount of that penalty or addition to tax. | |
| 47 | 37 | ||
| 48 | 38 | The people of the State of California do enact as follows: | |
| 49 | 39 | ||
| 50 | 40 | ## The people of the State of California do enact as follows: | |
| 51 | 41 | ||
| 52 | - | SECTION 1. Section | |
| 42 | + | SECTION 1. Section 24651 of the Revenue and Taxation Code is amended to read:24651. (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books.(b) If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of income shall be made under such method as, in the opinion of the Franchise Tax Board, does clearly reflect income.(c) Subject to subdivisions (a) and (b) and Section 24654, a taxpayer may compute income under any of the following methods of accounting accounting:(1) The cash receipts and disbursements method; method.(2) An accrual method; method.(3) Any other method permitted by this part; or part.(4) Any combination of the foregoing methods permitted under regulations prescribed by the Franchise Tax Board.(d) A taxpayer engaged in more than one trade or business may may, in computing income, use a different method of accounting for each trade or business.(e) Except as otherwise expressly provided in this part, a taxpayer who that changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board.(f) If the taxpayer does not file with the Franchise Tax Board a request to change the method of accounting, the absence of the consent of the Franchise Tax Board to a change in the method of accounting shall not be taken into account for either of the following:(1) To prevent the imposition of any penalty, or the addition of any amount to tax, under this part.(2) To diminish the amount of that penalty or addition to tax. | |
| 53 | 43 | ||
| 54 | - | SECTION 1. Section | |
| 44 | + | SECTION 1. Section 24651 of the Revenue and Taxation Code is amended to read: | |
| 55 | 45 | ||
| 56 | 46 | ### SECTION 1. | |
| 57 | 47 | ||
| 58 | - | ||
| 48 | + | 24651. (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books.(b) If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of income shall be made under such method as, in the opinion of the Franchise Tax Board, does clearly reflect income.(c) Subject to subdivisions (a) and (b) and Section 24654, a taxpayer may compute income under any of the following methods of accounting accounting:(1) The cash receipts and disbursements method; method.(2) An accrual method; method.(3) Any other method permitted by this part; or part.(4) Any combination of the foregoing methods permitted under regulations prescribed by the Franchise Tax Board.(d) A taxpayer engaged in more than one trade or business may may, in computing income, use a different method of accounting for each trade or business.(e) Except as otherwise expressly provided in this part, a taxpayer who that changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board.(f) If the taxpayer does not file with the Franchise Tax Board a request to change the method of accounting, the absence of the consent of the Franchise Tax Board to a change in the method of accounting shall not be taken into account for either of the following:(1) To prevent the imposition of any penalty, or the addition of any amount to tax, under this part.(2) To diminish the amount of that penalty or addition to tax. | |
| 59 | 49 | ||
| 60 | - | ||
| 50 | + | 24651. (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books.(b) If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of income shall be made under such method as, in the opinion of the Franchise Tax Board, does clearly reflect income.(c) Subject to subdivisions (a) and (b) and Section 24654, a taxpayer may compute income under any of the following methods of accounting accounting:(1) The cash receipts and disbursements method; method.(2) An accrual method; method.(3) Any other method permitted by this part; or part.(4) Any combination of the foregoing methods permitted under regulations prescribed by the Franchise Tax Board.(d) A taxpayer engaged in more than one trade or business may may, in computing income, use a different method of accounting for each trade or business.(e) Except as otherwise expressly provided in this part, a taxpayer who that changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board.(f) If the taxpayer does not file with the Franchise Tax Board a request to change the method of accounting, the absence of the consent of the Franchise Tax Board to a change in the method of accounting shall not be taken into account for either of the following:(1) To prevent the imposition of any penalty, or the addition of any amount to tax, under this part.(2) To diminish the amount of that penalty or addition to tax. | |
| 61 | 51 | ||
| 62 | - | ||
| 52 | + | 24651. (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books.(b) If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of income shall be made under such method as, in the opinion of the Franchise Tax Board, does clearly reflect income.(c) Subject to subdivisions (a) and (b) and Section 24654, a taxpayer may compute income under any of the following methods of accounting accounting:(1) The cash receipts and disbursements method; method.(2) An accrual method; method.(3) Any other method permitted by this part; or part.(4) Any combination of the foregoing methods permitted under regulations prescribed by the Franchise Tax Board.(d) A taxpayer engaged in more than one trade or business may may, in computing income, use a different method of accounting for each trade or business.(e) Except as otherwise expressly provided in this part, a taxpayer who that changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board.(f) If the taxpayer does not file with the Franchise Tax Board a request to change the method of accounting, the absence of the consent of the Franchise Tax Board to a change in the method of accounting shall not be taken into account for either of the following:(1) To prevent the imposition of any penalty, or the addition of any amount to tax, under this part.(2) To diminish the amount of that penalty or addition to tax. | |
| 63 | 53 | ||
| 64 | 54 | ||
| 65 | 55 | ||
| 66 | - | 17054.8. (a) For each taxable year beginning on or after January 1, 2020, there shall be allowed as a credit against the net tax, as defined in Section 17039, to a taxpayer who is a qualified commuter an amount equal to the following: | |
| 67 | - | ||
| 68 | - | (1) For spouses filing joint returns who have an adjusted gross income of one hundred thousand dollars ($100,000) or less, if both spouses are qualified commuters, five hundred dollars ($500). | |
| 69 | - | ||
| 70 | - | (2) For taxpayers filing returns other than those described in paragraph (1) who have an adjusted gross income of fifty thousand dollars ($50,000) or less, if the taxpayer is a qualified commuter, two hundred fifty dollars ($250). | |
| 71 | - | ||
| 72 | - | (b) For purposes of this section, qualified commuter means an individual who commutes at least 40 miles one way to work or school at least four days per week. | |
| 73 | - | ||
| 74 | - | (c) If the amount allowable as a credit under this section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall be paid from the Tax Relief and Refund Account and refunded to the taxpayer. | |
| 75 | - | ||
| 76 | - | ||
| 77 | - | ||
| 78 | - | ||
| 79 | - | ||
| 80 | - | (a)Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books. | |
| 81 | - | ||
| 82 | - | ||
| 56 | + | 24651. (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books. | |
| 83 | 57 | ||
| 84 | 58 | (b) If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of income shall be made under such method as, in the opinion of the Franchise Tax Board, does clearly reflect income. | |
| 85 | 59 | ||
| 60 | + | (c) Subject to subdivisions (a) and (b) and Section 24654, a taxpayer may compute income under any of the following methods of accounting accounting: | |
| 86 | 61 | ||
| 62 | + | (1) The cash receipts and disbursements method; method. | |
| 87 | 63 | ||
| 88 | - | ( | |
| 64 | + | (2) An accrual method; method. | |
| 89 | 65 | ||
| 90 | - | ||
| 91 | - | ||
| 92 | - | (1)The cash receipts and disbursements method. | |
| 93 | - | ||
| 94 | - | ||
| 95 | - | ||
| 96 | - | (2)An accrual method. | |
| 97 | - | ||
| 98 | - | ||
| 99 | - | ||
| 100 | - | (3)Any other method permitted by this part. | |
| 101 | - | ||
| 102 | - | ||
| 66 | + | (3) Any other method permitted by this part; or part. | |
| 103 | 67 | ||
| 104 | 68 | (4) Any combination of the foregoing methods permitted under regulations prescribed by the Franchise Tax Board. | |
| 105 | 69 | ||
| 70 | + | (d) A taxpayer engaged in more than one trade or business may may, in computing income, use a different method of accounting for each trade or business. | |
| 106 | 71 | ||
| 107 | - | ||
| 108 | - | (d)A taxpayer engaged in more than one trade or business may, in computing income, use a different method of accounting for each trade or business. | |
| 109 | - | ||
| 110 | - | ||
| 111 | - | ||
| 112 | - | (e)Except as otherwise expressly provided in this part, a taxpayer that changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board. | |
| 113 | - | ||
| 114 | - | ||
| 72 | + | (e) Except as otherwise expressly provided in this part, a taxpayer who that changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board. | |
| 115 | 73 | ||
| 116 | 74 | (f) If the taxpayer does not file with the Franchise Tax Board a request to change the method of accounting, the absence of the consent of the Franchise Tax Board to a change in the method of accounting shall not be taken into account for either of the following: | |
| 117 | 75 | ||
| 118 | - | ||
| 119 | - | ||
| 120 | 76 | (1) To prevent the imposition of any penalty, or the addition of any amount to tax, under this part. | |
| 121 | - | ||
| 122 | - | ||
| 123 | 77 | ||
| 124 | 78 | (2) To diminish the amount of that penalty or addition to tax. |