Bill Text: CA SB49 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Income tax credit: qualified principal residence.

Spectrum: Moderate Partisan Bill (Republican 11-2)

Status: (Introduced - Dead) 2010-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB49 Detail]

Download: California-2009-SB49-Amended.html

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BILL NUMBER: SB 49	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 6, 2009
	AMENDED IN SENATE  APRIL 14, 2009

INTRODUCED BY   Senator Dutton

                        JANUARY 13, 2009

   An act to amend Section 17059 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 49, as amended, Dutton. Income tax credit: qualified principal
residence.
   The Personal Income Tax Law authorizes various credits against the
taxes imposed by that law. Existing law authorizes a credit against
those taxes in an amount equal to the lesser of 5% of the purchase
price of a qualified principal residence, as defined,  purchased
on and after March 1, 2009, and before March 1, 2010,  or
$10,000  , allocated by the Franchise Tax Board on a first-come-
  first-served basis  . Existing law requires a
taxpayer to provide the Franchise Tax Board with a certification from
the seller of  the  qualified principal residence that the
residence, has never been previously occupied within one week of the
sale of the residence and caps the total amount of the credit at
$100,000,000. 
   This bill would provide that a taxpayer may reserve a credit with
the Franchise Tax Board and require that the certification be
provided to the Franchise Tax Board within one week of the close of
escrow of the qualified principal residence. This bill would also
remove the cap on the total credit amount allowed.  
   This bill would provide that the tax credit is authorized for
purchases of a qualified principal residence made before December 1,
2010, subject to specified restrictions. This bill would revise the
certification requirements to provide that the taxpayer receive the
certification no later than one week after the close of escrow on the
qualified principal residence and that the Franchise Tax Board be
provided with the certification upon request by the board. This bill
would also remove the cap on the total credit amount allowed and the
requirement that the tax credits be allocated on a
first-come-first-served basis. 
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 17059 of the Revenue and Taxation Code is
amended to read:
   17059.  (a) (1) In the case of any taxpayer who purchases a
qualified principal residence on and after March 1, 2009, and before
 March   December  1, 2010, there shall be
allowed as a credit against the "net tax," as defined in Section
17039, an amount equal to the lesser of 5 percent of the purchase
price of the qualified principal residence or ten thousand dollars
($10,000).  The purchase of a qualified principal residence that
occurs on and after March 1, 2010, and before December 1, 2010, must
be made   pursuant to an enforceable contract to purchase
the qualified principal residence executed prior to March 1, 2010.

   (2) The amount of any credit allowed under paragraph (1) shall be
applied in equal amounts over the three successive taxable years
beginning with the taxable year in which the purchase of the
qualified principal residence is made.
   (3) The credit under this section shall be allowed for the
purchase of only one qualified principal residence with respect to
any taxpayer. 
   (4) A taxpayer may, but is not required to, reserve a credit prior
to close of escrow. To reserve a credit, the taxpayer and seller
shall jointly sign and submit to the Franchise Tax Board a
certification that they have entered into the agreement on or after
March 1, 2009, and before March 1, 2010. Upon receipt of the joint
certification, the Franchise Tax Board shall reserve the credit for
the taxpayer. 
   (b) (1) For purposes of this section, "qualified principal
residence" means a single-family residence, whether detached or
attached, that has never been occupied, that is purchased to be the
principal residence of the taxpayer for a minimum of two years and is
eligible for the homeowner's exemption under Section 218.
   (2) No credit shall be allowed under this  section,
whether or not the taxpayer reserves a credit pursuant to paragraph
(4) of subdivision (a), unless the taxpayer submits with his or her
tax return   section unless the taxpayer receives 
a certification  by   from  the seller of
the qualified principal residence that the residence has never been
previously occupied. The seller shall provide the certification to
the taxpayer  and to the Franchise Tax Board within one week
of   no later than one week after  the close of
escrow of the qualified principal residence.  If the taxpayer
reserves a credit pursuant to paragraph (4) of subdivision (a), the
close of escrow need not occur before March 1, 2010.  
The taxpayer shall retain the certification and provide it to the
Franchise Tax Board upon request. 
   (3) If the taxpayer does not occupy the qualified principal
residence as his or her principal residence for at least two years
immediately following the purchase the credit shall be canceled, and
the taxpayer shall be liable for any credit allowed under this
section on previous tax returns.
   (c) (1) In the case of two married taxpayers filing separately,
the credit allowed under subdivision (a) shall be equally apportioned
between the two taxpayers.
   (2) If two or more taxpayers who are not married purchase a
qualified principal residence, the amount of the credit allowed under
subdivision (a) shall be allocated among the taxpayers in the same
manner as each taxpayer's percentage of ownership, except that the
total amount of the credits allowed to all of these taxpayers shall
not exceed ten thousand dollars ($10,000). 
   (d) (1) Upon receipt of the certification from the seller, as
described in paragraph (2) of subdivision (b), the Franchise Tax
Board shall allocate the credit to the taxpayer.  
   (2) The taxpayer shall claim the credit on a timely filed original
return.  
   (3) The date a certification is received shall be determined by
the Franchise Tax Board.  
   (4) (A) The determinations of the Franchise Tax Board with respect
to the date a certification is received, and whether a return has
been timely filed for purposes of this subdivision, may not be
reviewed in any administrative or judicial proceeding. 

   (B) Any disallowance of a credit claimed due to a determination
under this subdivision, including the application of the limitation
specified in paragraph (1), shall be treated as a mathematical error
appearing on the return. Any amount of tax resulting from that
disallowance may be assessed by the Franchise Tax Board in the same
manner as provided by Section 19051.  
   (e) 
    (d)  The Franchise Tax Board may prescribe rules,
guidelines, or procedures necessary or appropriate to carry out the
purposes of this section, including any guidelines regarding the
allocation of the credit allowed under this section. Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code does not apply to any rule, guideline, or
procedure prescribed by the Franchise Tax Board pursuant to this
section. 
   (f) 
    (e)  The credit allowed by this section is not a
business credit within the meaning of Section 17039.2. 
   (g) 
    (f)  This section shall remain in effect only until
December 1, 2013, and as of that date is repealed. 
   (g) The amendments made to this act by the act adding this
subdivision shall apply to purchases that occur on or after March 1,
2009, and before December 1, 2010. 
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.