Bill Text: CA SB952 | 2009-2010 | Regular Session | Amended
Bill Title: Sales and use taxes: rate: income taxes: dependent
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-05-13 - Placed on REV. & TAX. suspense file. [SB952 Detail]
Download: California-2009-SB952-Amended.html
BILL NUMBER: SB 952 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 5, 2010
INTRODUCED BY Senator Wyland
FEBRUARY 4, 2010
An act to amend Sections 6051.7, 6201.7, 10752.2,
17041, 17054, 17062, and 18663 of, and to amend
and repeal Sections 10752 and 10752.1 of, and 17062 of
the Revenue and Taxation Code, relating to taxation, and
declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 952, as amended, Wyland. Sales and use taxes: vehicle
license fee: rate: income taxes: dependent
credit: income tax administration: withholding rates.
administration.
The Sales and Use Tax Law imposes a state sales and use tax on
retailers and on the storage, use, or other consumption of tangible
personal property in this state at the rate of 61/4%, plus, from
April 11, 2009 to July 1, 2011, an additional 1%, of the gross
receipts from the retail sale of tangible personal property in this
state and of the sales price of tangible personal property purchased
from any retailer for storage, use, or other consumption in this
state.
This bill would repeal the additional 1% state sales and use tax
rate on the first day of the first calendar quarter commencing more
than 90 days after the effective date of this bill.
The Vehicle License Fee Law establishes, in lieu of any ad valorem
property tax upon vehicles, an annual license fee for any vehicle
subject to registration in this state in an amount of 0.65% of the
market value of that vehicle, as provided. Existing law, until July
1, 2011, increases that rate by 0.35%, for specified vehicles and
requires that the revenues derived from the increase be deposited
into the General Fund. That law also, until July 1, 2011, adds a sum
equal to 0.15% of the market value of specified vehicles to the
vehicle license fee, to be deposited in the General Fund and
transferred to the Local Safety and Protection Account for allocation
by the Controller for specified purposes.
This bill would repeal the additional 0.35% and 0.15% rates on the
effective date of this bill.
The Personal Income Tax Law imposes taxes based upon taxable
income. That law also allows credits for personal exemptions, and
imposes an alternative minimum tax, as specified. That law, for
taxable years beginning on or after January 1, 2009, and until
January 1, 2011, decreases the amount allowable as a credit for
personal exemption for dependents, and for taxable years beginning on
and after January 1, 2009, and before January 1, 2011, increases the
tax rate applicable to taxable income, and increases the alternative
minimum tax rate, as provided.
This bill would repeal the provision decreasing the amount
allowable as a credit for personal exemption for dependents on
January 1, 2010. This bill would repeal the provisions increasing the
tax rate applicable to taxable income, and increasing the
alternative minimum tax rate, for taxable years beginning on or after
January 1, 2010.
Existing law requires the Franchise Tax Board to prepare wage
withholding tables to be used by employers for purposes of
withholding taxes on wages paid that produce a sum that is equal to
10% more than the sum specified prior to November 1, 2009. Existing
law allows, in lieu of the withholding tables, withholding at a rate
of 6.6% with respect to supplemental wages and at a rate of 10.23%
with respect to stock options and bonus payments.
This bill would eliminate the requirement that wage withholding
tables produce a sum that is equal to 10% more than the sum specified
prior to November 1, 2009, for purposes of the withholding tables.
This bill would also decrease the withholding rates to 6% for
supplemental wages and to 9.3% for stock options and bonus payments.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6051.7 of the Revenue and Taxation Code is
amended to read:
6051.7. In addition to the taxes imposed by Section 6051 and any
other provision of this part, for the privilege of selling tangible
personal property at retail, a tax is hereby imposed upon all
retailers at the rate of 1 percent of the gross receipts of any
retailer from the sale of all tangible personal property sold at
retail in this state, on and after April 1, 2009, and before the
first day of the first calendar quarter commencing more than 90 days
after the effective date of the act amending this section.
SEC. 2. Section 6201.7 of the Revenue and Taxation Code is amended
to read:
6201.7. In addition to the taxes imposed by Section 6201 and any
other provision of this part, an excise tax is hereby imposed on the
storage, use, or other consumption in this state of tangible personal
property purchased from any retailer for storage, use, or other
consumption in this state, at the rate of 1 percent of the sales
price of the property, on and after April 1, 2009, and before the
first day of the first calender quarter commencing more than 90 days
after the effective date of the act amending this section.
SEC. 3. Section 10752 of the Revenue and
Taxation Code, as amended by Section 4 of Chapter 18 of the Third
Extraordinary Session of the Statutes of 2009, is amended to read:
10752. (a) The annual amount of the license fee for any vehicle,
other than a trailer or semitrailer, as described in subdivision (a)
of Section 5014.1 of the Vehicle Code or a commercial motor vehicle
described in Section 9400.1 of the Vehicle Code, or a trailer coach
that is required to be moved under permit as authorized in Section
35790 of the Vehicle Code, shall be a sum equal to the following
percentage of the market value of the vehicle as determined by the
department:
(1) Sixty-five hundredths of 1 percent on and after January 1,
2005, and before May 19, 2009.
(2) One percent on and after May 19, 2009, and before the
effective date of the act amending this section.
(3) Sixty-five hundredths of 1 percent on and after the effective
date of the act amending this section.
(b) The annual amount of the license fee for any commercial
vehicle as described in Section 9400.1 of the Vehicle Code, shall be
a sum equal to 0.65 percent of the market value of the vehicle as
determined by the department.
(c) Notwithstanding Chapter 5 (commencing with Section 11001) or
any other law to the contrary, all revenues (including penalties),
less refunds, attributable to that portion of the rate imposed
pursuant to this section in excess of 0.65 percent shall be deposited
into the General Fund.
SEC. 4. Section 10752 of the Revenue and
Taxation Code, as added by Section 5 of Chapter 18 of the Third
Extraordinary Session of the Statutes of 2009, is repealed.
SEC. 5. Section 10752.1 of the Revenue and
Taxation Code, as amended by Section 6 of Chapter 18 of the Third
Extraordinary Session of the Statutes of 2009, is amended to read:
10752.1. (a) The annual amount of the license fee for a trailer
coach which is required to be moved under permit as authorized in
Section 35790 of the Vehicle Code shall be a sum equal to the
following percentage of the market value of the vehicle as determined
by the department:
(1) Sixty-five hundredths of 1 percent on and after January 1,
2005, and before May 19, 2009.
(2) One percent on and after May 19, 2009, and before the
effective date of the act amending this section.
(3) Sixty-five hundredth of 1 percent on and after the effective
date of the act amending this section.
(b) Notwithstanding Chapter 5 (commencing with Section 11001) or
any other law to the contrary, all revenues (including penalties),
less refunds, attributable to that portion of the rate imposed
pursuant to this section in excess of 0.65 percent shall be deposited
in the General Fund.
SEC. 6. Section 10752.1 of the Revenue and
Taxation Code, as added by Section 7 of Chapter 18 of the Third
Extraordinary Session of the Statutes of 2009, is repealed.
SEC. 7. Section 10752.2 of the Revenue and
Taxation Code is amended to read:
10752.2. (a) On and after May 19, 2009, in addition to the annual
license fee for a vehicle, other than a commercial motor vehicle
described in Section 9400.1 of the Vehicle Code, imposed pursuant to
Sections 10752 and 10752.1, a sum equal to 0.15 percent of the market
value of the vehicle as determined by the department, shall be added
to that annual fee.
(b) Notwithstanding Chapter 5 (commencing with Section 11001) or
any other law to the contrary, all revenues (including penalties),
less refunds, derived from fees collected pursuant to subdivision (a)
shall be deposited in the General Fund and transferred to the Local
Safety and Protection Account, which is hereby established in the
Transportation Tax Fund. Notwithstanding Section 13340 of the
Government Code, all moneys in the account are hereby continuously
appropriated, without regard to fiscal year, to the Controller for
allocation pursuant to Sections 29553, 30061, and 30070 of the
Government Code, Section 13821 of the Penal Code, and Sections 18220
and 18220.1 of the Welfare and Institutions Code.
(c) (1) In 2010 and each calendar year thereafter, the Director of
Finance shall, no later than January 10 and upon the enactment of
the Budget Act during the calendar year, make a written determination
of whether any of the moneys derived from fees collected pursuant to
subdivision (a) are being allocated by the state for any purpose not
authorized by subdivision (b), and shall immediately submit his or
her written determination to all of the following:
(A) The Director of the Department of Motor Vehicles.
(B) The Joint Legislative Budget Committee.
(C) The Senate and Assembly Appropriations Committees.
(D) The Senate and Assembly Revenue and Taxation Committees.
(2) If the Director of Finance determines that any moneys derived
from fees collected pursuant to subdivision (a) are being allocated
by the state for a purpose not authorized by subdivision (b), the
Director of the Department of Motor Vehicles shall, upon receipt of
the written determination, immediately cease collection of the fees
imposed by subdivision (a), and shall resume collection of those fees
only upon his or her receipt of written determination provided under
paragraph (1) that specifies that none of the moneys derived from
fees collected pursuant to subdivision (a) are being allocated by the
state for a purpose not authorized by subdivision (a).
(d) This section shall cease to be operative on the effective date
of the act amending this section.
SEC. 8. SEC. 3. Section 17041 of the
Revenue and Taxation Code is amended to read:
17041. (a) (1) There shall be imposed for each taxable year upon
the entire taxable income of every resident of this state who is not
a part-year resident, except the head of a household as defined in
Section 17042, taxes in the following amounts and at the following
rates upon the amount of taxable income computed for the taxable year
as if the resident were a resident of this state for the entire
taxable year and for all prior taxable years for any carryover items,
deferred income, suspended losses, or suspended deductions:
If the taxable income The tax is:
is:
Not over $3,650 ....... 1% of the taxable income
Over $3,650 but not $36.50 plus 2% of the
excess
over $8,650 ...........
over $3,650
Over $8,650 but not $136.50 plus 4% of the
excess
over $13,650 ..........
over $8,650
Over $13,650 but not $336.50 plus 6% of the
excess
over $18,950 ..........
over $13,650
Over $18,950 but not $654.50 plus 8% of
the excess
over $23,950 ..........
over $18,950
$1,054.50 plus 9.3% of
Over $23,950 .......... the excess
over $23,950
(2) For taxable years beginning on or after January 1, 2009, and
before January 1, 2010, the percentages specified in the table in
paragraph (1) shall be increased by adding 0.25 percent to each
percentage.
(b) (1) There shall be imposed for each taxable year upon the
taxable income of every nonresident or part-year resident, except the
head of a household as defined in Section 17042, a tax as calculated
in paragraph (2).
(2) The tax imposed under paragraph (1) shall be calculated by
multiplying the "taxable income of a nonresident or part-year
resident," as defined in subdivision (i), by a rate (expressed as a
percentage) equal to the tax computed under subdivision (a) on the
entire taxable income of the nonresident or part-year resident as if
the nonresident or part-year resident were a resident of this state
for the taxable year and as if the nonresident or part-year resident
were a resident of this state for all prior taxable years for any
carryover items, deferred income, suspended losses, or suspended
deductions, divided by the amount of that income.
(c) (1) There shall be imposed for each taxable year upon the
entire taxable income of every resident of this state who is not a
part-year resident for that taxable year, when the resident is the
head of a household, as defined in Section 17042, taxes in the
following amounts and at the following rates upon the amount of
taxable income computed for the taxable year as if the resident were
a resident of the state for the entire taxable year and for all prior
taxable years for carryover items, deferred income, suspended
losses, or suspended deductions:
If the taxable income The tax is:
is:
Not over $7,300 ........ 1% of the taxable
income
Over $7,300 but not $73 plus 2% of the
excess
over $17,300 ...........
over $7,300
Over $17,300 but not $273 plus 4% of the
excess
over $22,300 ...........
over $17,300
Over $22,300 but not $473 plus 6% of the
excess
over $27,600 ...........
over $22,300
Over $27,600 but not $791 plus 8% of the
excess
over $32,600 ...........
over $27,600
$1,191 plus 9.3% of the
Over $32,600 ........... excess
over $32,600
(2) For taxable years beginning on or after January 1, 2009, and
before January 1, 2010, the percentages specified in the table in
paragraph (1) shall be increased by adding 0.25 percent to each
percentage..
(d) (1) There shall be imposed for each taxable year upon the
taxable income of every nonresident or part-year resident when the
nonresident or part-year resident is the head of a household, as
defined in Section 17042, a tax as calculated in paragraph (2).
(2) The tax imposed under paragraph (1) shall be calculated by
multiplying the "taxable income of a nonresident or part-year
resident," as defined in subdivision (i), by a rate (expressed as a
percentage) equal to the tax computed under subdivision (c) on the
entire taxable income of the nonresident or part-year resident as if
the nonresident or part-year resident were a resident of this state
for the taxable year and as if the nonresident or part-year resident
were a resident of this state for all prior taxable years for any
carryover items, deferred income, suspended losses, or suspended
deductions, divided by the amount of that income.
(e) There shall be imposed for each taxable year upon the taxable
income of every estate, trust, or common trust fund taxes equal to
the amount computed under subdivision (a) for an individual having
the same amount of taxable income.
(f) The tax imposed by this part is not a surtax.
(g) (1) Section 1(g) of the Internal Revenue Code, relating to
certain unearned income of minor children taxed as if the parent's
income, shall apply, except as otherwise provided.
(2) Section 1(g)(7)(B)(ii)(II) of the Internal Revenue Code,
relating to income included on parent's return, is modified, for
purposes of this part, by substituting "1 percent" for "15 percent."
(h) For each taxable year beginning on or after January 1, 1988,
the Franchise Tax Board shall recompute the income tax brackets
prescribed in subdivisions (a) and (c). That computation shall be
made as follows:
(1) The California Department of Industrial Relations shall
transmit annually to the Franchise Tax Board the percentage change in
the California Consumer Price Index for all items from June of the
prior calendar year to June of the current calendar year, no later
than August 1 of the current calendar year.
(2) The Franchise Tax Board shall do both of the following:
(A) Compute an inflation adjustment factor by adding 100 percent
to the percentage change figure that is furnished pursuant to
paragraph (1) and dividing the result by 100.
(B) Multiply the preceding taxable year income tax brackets by the
inflation adjustment factor determined in subparagraph (A) and round
off the resulting products to the nearest one dollar ($1).
(i) (1) For purposes of this part, the term "taxable income of a
nonresident or part-year resident" includes each of the following:
(A) For any part of the taxable year during which the taxpayer was
a resident of this state (as defined by Section 17014), all items of
gross income and all deductions, regardless of source.
(B) For any part of the taxable year during which the taxpayer was
not a resident of this state, gross income and deductions derived
from sources within this state, determined in accordance with Article
9 of Chapter 3 (commencing with Section 17301) and Chapter 11
(commencing with Section 17951).
(2) For purposes of computing "taxable income of a nonresident or
part-year resident" under paragraph (1), the amount of any net
operating loss sustained in any taxable year during any part of which
the taxpayer was not a resident of this state shall be limited to
the sum of the following:
(A) The amount of the loss attributable to the part of the taxable
year in which the taxpayer was a resident.
(B) The amount of the loss which, during the part of the taxable
year the taxpayer is not a resident, is attributable to California
source income and deductions allowable in arriving at taxable income
of a nonresident or part-year resident.
(3) For purposes of computing "taxable income of a nonresident or
part-year resident" under paragraph (1), any carryover items,
deferred income, suspended losses, or suspended deductions shall only
be includable or allowable to the extent that the carryover item,
deferred income, suspended loss, or suspended deduction was derived
from sources within this state, calculated as if the nonresident or
part-year resident, for the portion of the year he or she was a
nonresident, had been a nonresident for all prior years.
SEC. 9. Section 17054 of the Revenue and
Taxation Code is amended to read:
17054. In the case of individuals, the following credits for
personal exemption may be deducted from the tax imposed under Section
17041 or 17048, less any increases imposed under paragraph (1) of
subdivision (d) or paragraph (1) of subdivision (e), or both, of
Section 17560.
(a) In the case of a single individual, a head of household, or a
married individual making a separate return, a credit of fifty-two
dollars ($52).
(b) In the case of a surviving spouse (as defined in Section
17046), or a husband and wife making a joint return, a credit of one
hundred four dollars ($104). If one spouse was a resident for the
entire taxable year and the other spouse was a nonresident for all or
any portion of the taxable year, the personal exemption shall be
divided equally.
(c) In addition to any other credit provided in this section, in
the case of an individual who is 65 years of age or over by the end
of the taxable year, a credit of fifty-two dollars ($52).
(d) (1) A credit of two hundred twenty-seven dollars ($227) for
each dependent (as defined in Section 17056) for whom an exemption is
allowable under Section 151(c) of the Internal Revenue Code,
relating to additional exemption for dependents. The credit allowed
under this subdivision for taxable years beginning on or after
January 1, 1999, shall not be adjusted pursuant to subdivision (i)
for any taxable year beginning before January 1, 2000.
(2) The credit allowed under paragraph (1) may not be denied on
the basis that the identification number of the dependent, as defined
in Section 17056, for whom an exemption is allowable under Section
151(c) of the Internal Revenue Code, relating to additional exemption
for dependents, is not included on the return claiming the credit.
(3) (A) For taxable years beginning on or after January 1, 2009,
the credit allowed under paragraph (1) for each dependent shall be
equal to the credit allowed under subdivision (a). This subparagraph
shall cease to be operative on January 1, 2010.
(B) Commencing on the date that subparagraph (A) ceases to be
operative, the credit allowed under paragraph (1) for each dependent
shall be equal to the amount that would be allowed if subparagraph
(A) had never been operative.
(e) A credit for personal exemption of fifty-two dollars ($52) for
the taxpayer if he or she is blind at the end of his or her taxable
year.
(f) A credit for personal exemption of fifty-two dollars ($52) for
the spouse of the taxpayer if a separate return is made by the
taxpayer, and if the spouse is blind and, for the calendar year in
which the taxable year of the taxpayer begins, has no gross income
and is not the dependent of another taxpayer.
(g) For the purposes of this section, an individual is blind only
if either (1) his or her central visual acuity does not exceed 20/200
in the better eye with correcting lenses, or (2) his or her visual
acuity is greater than 20/200 but is accompanied by a limitation in
the fields of vision such that the widest diameter of the visual
field subtends an angle no greater than 20 degrees.
(h) In the case of an individual with respect to whom a credit
under this section is allowable to another taxpayer for a taxable
year beginning in the calendar year in which the individual's taxable
year begins, the credit amount applicable to that individual for
that individual's taxable year is zero.
(i) For each taxable year beginning on or after January 1, 1989,
the Franchise Tax Board shall compute the credits prescribed in this
section. That computation shall be made as follows:
(1) The California Department of Industrial Relations shall
transmit annually to the Franchise Tax Board the percentage change in
the California Consumer Price Index for all items from June of the
prior calendar year to June of the current calendar year, no later
than August 1 of the current calendar year.
(2) The Franchise Tax Board shall add 100 percent to the
percentage change figure which is furnished to them pursuant to
paragraph (1), and divide the result by 100.
(3) The Franchise Tax Board shall multiply the immediately
preceding taxable year credits by the inflation adjustment factor
determined in paragraph (2), and round off the resulting products to
the nearest one dollar ($1).
(4) In computing the credits pursuant to this subdivision, the
credit provided in subdivision (b) shall be twice the credit provided
in subdivision (a).
SEC. 4. Section 17054 of the Revenue
and Taxation Code is amended to read:
17054. In the case of individuals, the following credits for
personal exemption may be deducted from the tax imposed under Section
17041 or 17048, less any increases imposed under paragraph (1) of
subdivision (d) or paragraph (1) of subdivision (e), or both, of
Section 17560.
(a) In the case of a single individual, a head of household, or a
married individual making a separate return, a credit of fifty-two
dollars ($52).
(b) In the case of a surviving spouse (as defined in Section
17046), or a husband and wife making a joint return, a credit of one
hundred four dollars ($104). If one spouse was a resident for the
entire taxable year and the other spouse was a nonresident for all or
any portion of the taxable year, the personal exemption shall be
divided equally.
(c) In addition to any other credit provided in this section, in
the case of an individual who is 65 years of age or over by the end
of the taxable year, a credit of fifty-two dollars ($52).
(d) (1) A credit of two hundred twenty-seven dollars ($227) for
each dependent (as defined in Section 17056) for whom an exemption is
allowable under Section 151(c) of the Internal Revenue Code,
relating to additional exemption for dependents. The credit allowed
under this subdivision for taxable years beginning on or after
January 1, 1999, shall not be adjusted pursuant to subdivision (i)
for any taxable year beginning before January 1, 2000.
(2) The credit allowed under paragraph (1) may not be denied on
the basis that the identification number of the dependent, as defined
in Section 17056, for whom an exemption is allowable under Section
151(c) of the Internal Revenue Code, relating to additional exemption
for dependents, is not included on the return claiming the credit.
(3) (A) For taxable years beginning on or after January 1, 2009,
the credit allowed under paragraph (1) for each dependent shall be
equal to the credit allowed under subdivision (a). This subparagraph
shall cease to be operative for taxable years beginning on or after
January 1, 2011, unless the Director of Finance makes the
notification pursuant to Section 99040 of the Government Code, in
which case this subparagraph shall cease to be operative for taxable
years beginning on or after January 1, 2013 2010
.
(B) For taxable years Commen
cing on the date that subparagraph (A) ceases to be operative,
the credit allowed under paragraph (1) for each dependent shall be
equal to the amount that would be allowed if subparagraph (A) had
never been operative.
(e) A credit for personal exemption of fifty-two dollars ($52) for
the taxpayer if he or she is blind at the end of his or her taxable
year.
(f) A credit for personal exemption of fifty-two dollars ($52) for
the spouse of the taxpayer if a separate return is made by the
taxpayer, and if the spouse is blind and, for the calendar year in
which the taxable year of the taxpayer begins, has no gross income
and is not the dependent of another taxpayer.
(g) For the purposes of this section, an individual is blind only
if either (1) his or her central visual acuity does not exceed 20/200
in the better eye with correcting lenses, or (2) his or her visual
acuity is greater than 20/200 but is accompanied by a limitation in
the fields of vision such that the widest diameter of the visual
field subtends an angle no greater than 20 degrees.
(h) In the case of an individual with respect to whom a credit
under this section is allowable to another taxpayer for a taxable
year beginning in the calendar year in which the individual's taxable
year begins, the credit amount applicable to that individual for
that individual's taxable year is zero.
(i) For each taxable year beginning on or after January 1, 1989,
the Franchise Tax Board shall compute the credits prescribed in this
section. That computation shall be made as follows:
(1) The California Department of Industrial Relations shall
transmit annually to the Franchise Tax Board the percentage change in
the California Consumer Price Index for all items from June of the
prior calendar year to June of the current calendar year, no later
than August 1 of the current calendar year.
(2) The Franchise Tax Board shall add 100 percent to the
percentage change figure which is furnished to them pursuant to
paragraph (1), and divide the result by 100.
(3) The Franchise Tax Board shall multiply the immediately
preceding taxable year credits by the inflation adjustment factor
determined in paragraph (2), and round off the resulting products to
the nearest one dollar ($1).
(4) In computing the credits pursuant to this subdivision, the
credit provided in subdivision (b) shall be twice the credit provided
in subdivision (a).
SEC. 10. SEC. 5. Section 17062 of
the Revenue and Taxation Code is amended to read:
17062. (a) In addition to the other taxes imposed by this part,
there is hereby imposed for each taxable year, a tax equal to the
excess, if any, of--
(1) The tentative minimum tax for the taxable year, over
(2) The regular tax for the taxable year.
(b) For purposes of this chapter, each of the following shall
apply:
(1) The tentative minimum tax shall be computed in accordance with
Sections 55 to 59, inclusive, of the Internal Revenue Code, except
as otherwise provided in
this part.
(2) The regular tax shall be the amount of tax imposed by Section
17041 or 17048, before reduction for any credits against the tax,
less any amount imposed under paragraph (1) of subdivision (d) and
paragraph (1) of subdivision (e) of Section 17560.
(3) (A) The provisions of Section 55(b)(1) of the Internal Revenue
Code shall be modified to provide that the tentative minimum tax for
the taxable year shall be equal to the following percent of so much
of the alternative minimum taxable income for the taxable year as
exceeds the exemption amount, before reduction for any credits
against the tax:
(i) For any taxable year beginning on or after January 1, 1991,
and before January 1, 1996, 8.5 percent.
(ii) For any taxable year beginning on or after January 1, 1996,
and before January 1, 2009, 7 percent.
(iii) For taxable years beginning on and after January 1, 2009,
and before January 1, 2010, 7.25 percent.
(iv) For any taxable year beginning on or after January 1, 2010, 7
percent.
(B) In the case of a nonresident or part-year resident, the
tentative minimum tax shall be computed by multiplying the
alternative minimum taxable income of the nonresident or part-year
resident, as defined in subparagraph (C), by a rate (expressed as a
percentage) equal to the tax computed under subdivision (b) on the
alternative minimum taxable income of the nonresident or part-year
resident as if the nonresident or part-year resident were a resident
of this state for the taxable year and as if the nonresident or
part-year resident were a resident of this state for all prior
taxable years for any carryover items, deferred income, suspended
losses, or suspended deductions, divided by the amount of that
income.
(C) For purposes of this section, the term "alternative minimum
taxable income of a nonresident or part-year resident" includes each
of the following:
(i) For any period during which the taxpayer was a resident of
this state (as defined by Section 17014), all items of alternative
minimum taxable income (as modified for purposes of this chapter),
regardless of source.
(ii) For any period during which the taxpayer was not a resident
of this state, alternative minimum taxable income (as modified for
purposes of this chapter) which were derived from sources within this
state, determined in accordance with Article 9 of Chapter 3
(commencing with Section 17301) and Chapter 11 (commencing with
Section 17951).
(iii) For purposes of computing "alternative minimum taxable
income of a nonresident or part-year resident," any carryover items,
deferred income, suspended losses, or suspended deductions shall only
be allowable to the extent that the carryover item, suspended loss,
or suspended deduction was derived from sources within this state.
(4) The provisions of Section 55(b)(2) of the Internal Revenue
Code, relating to alternative minimum taxable income, shall be
modified to provide that alternative minimum taxable income shall not
include the income, adjustments, and items of tax preference
attributable to any trade or business of a qualified taxpayer.
(A) For purposes of this paragraph, "qualified taxpayer" means a
taxpayer who meets both of the following:
(i) Is the owner of, or has an ownership interest in, a trade or
business.
(ii) Has aggregate gross receipts, less returns and allowances, of
less than one million dollars ($1,000,000) during the taxable year
from all trades or businesses of which the taxpayer is the owner or
has an ownership interest, in the amount of that taxpayer's
proportionate interest in each trade or business.
(B) For purposes of this paragraph, "aggregate gross receipts,
less returns and allowances" means the sum of the gross receipts of
the trades or businesses that the taxpayer owns and the proportionate
interest of the gross receipts of the trades or businesses that the
taxpayer owns and of pass-through entities in which the taxpayer
holds an interest.
(C) For purposes of this paragraph, "gross receipts, less returns
and allowances" means the sum of the gross receipts from the
production of business income, as defined in subdivision (a) of
Section 25120, and the gross receipts from the production of
nonbusiness income, as defined in subdivision (d) of Section 25120.
(D) For purposes of this paragraph, "proportionate interest"
means:
(i) In the case of a pass-through entity that reports a profit for
the taxable year, the taxpayer's profit interest in the entity at
the end of the taxpayer's taxable year.
(ii) In the case of a pass-through entity that reports a loss for
the taxable year, the taxpayer's loss interest in the entity at the
end of the taxpayer's taxable year.
(iii) In the case of a pass-through entity that is sold or
liquidates during the taxable year, the taxpayer's capital account
interest in the entity at the time of the sale or liquidation.
(E) (i) For purposes of this paragraph, "proportionate interest"
includes an interest in a pass-through entity.
(ii) For purposes of this paragraph, "pass-through entity" means
any of the following:
(I) A partnership, as defined by Section 17008.
(II) An "S" corporation, as provided in Chapter 4.5 (commencing
with Section 23800) of Part 11.
(III) A regulated investment company, as provided in Section
24871.
(IV) A real estate investment trust, as provided in Section 24872.
(V) A real estate mortgage investment conduit, as provided in
Section 24874.
(5) For taxable years beginning on or after January 1, 1998,
Section 55(d)(1) of the Internal Revenue Code, relating to exemption
amount for taxpayers other than corporations is modified, for
purposes of this part, to provide the following exemption amounts in
lieu of those contained therein:
(A) Fifty-seven thousand two hundred sixty dollars ($57,260) in
the case of either of the following:
(i) A joint return.
(ii) A surviving spouse.
(B) Forty-two thousand nine hundred forty-five dollars ($42,945)
in the case of an individual who is both of the following:
(i) Not a married individual.
(ii) Not a surviving spouse.
(C) Twenty-eight thousand six hundred thirty dollars ($28,630) in
the case of either of the following:
(i) A married individual who files a separate return.
(ii) An estate or trust.
(6) For taxable years beginning on or after January 1, 1998,
Section 55(d)(3) of the Internal Revenue Code, relating to the
phaseout of exemption amount for taxpayers other than corporations is
modified, for purposes of this part, to provide the following
phaseout of exemption amounts in lieu of those contained therein:
(A) Two hundred fourteen thousand seven hundred twenty-five
dollars ($214,725) in the case of a taxpayer described in
subparagraph (A) of paragraph (5).
(B) One hundred sixty-one thousand forty-four dollars ($161,044)
in the case of a taxpayer described in subparagraph (B) of paragraph
(5).
(C) One hundred seven thousand three hundred sixty-two dollars
($107,362) in the case of a taxpayer described in subparagraph (C) of
paragraph (5).
(7) For each taxable year beginning on or after January 1, 1999,
the Franchise Tax Board shall recompute the exemption amounts
prescribed in paragraph (5) and the phaseout of exemption amounts
prescribed in paragraph (6). Those computations shall be made as
follows:
(A) The California Department of Industrial Relations shall
transmit annually to the Franchise Tax Board the percentage change in
the California Consumer Price Index for all items from June of the
prior calendar year to June of the current calendar year, no later
than August 1 of the current calendar year.
(B) The Franchise Tax Board shall do both of the following:
(i) Compute an inflation adjustment factor by adding 100 percent
to the percentage change figure that is furnished pursuant to
subparagraph (A) and dividing the result by 100.
(ii) Multiply the preceding taxable year exemption amounts and the
phaseout of exemption amounts by the inflation adjustment factor
determined in clause (i) and round off the resulting products to the
nearest one dollar ($1).
(c) (1) (A) Section 56(a)(6) of the Internal Revenue Code as in
effect on January 1, 1997, relating to installment sales of certain
property, shall not apply to payments received in taxable years
beginning on or after January 1, 1997, with respect to dispositions
occurring in taxable years beginning after December 31, 1987.
(B) This paragraph shall not apply to taxable years beginning on
or after January 1, 1998.
(2) Section 56(b)(1)(E) of the Internal Revenue Code, relating to
standard deduction and deduction for personal exemptions not allowed,
is modified, for purposes of this part, to deny the standard
deduction allowed by Section 17073.5.
(3) Section 56(b)(3) of the Internal Revenue Code, relating to
treatment of incentive stock options, shall be modified to
additionally provide the following:
(A) Section 421 of the Internal Revenue Code shall not apply to
the transfer of stock acquired pursuant to the exercise of a
California qualified stock option under Section 17502.
(B) Section 422(c)(2) of the Internal Revenue Code shall apply in
any case where the disposition and inclusion of a California
qualified stock option for purposes of this chapter are within the
same taxable year and that section shall not apply in any other case.
(C) The adjusted basis of any stock acquired by the exercise of a
California qualified stock option shall be determined on the basis of
the treatment prescribed by this paragraph.
(d) The provisions of Section 57(a)(5) of the Internal Revenue
Code, relating to tax-exempt interest shall not apply.
(e) Section 57(a) of the Internal Revenue Code, relating to items
of tax preference, is modified to include as an item of tax
preference an amount equal to one-half of the amount excluded from
gross income for the taxable year under Section 18152.5.
(f) The provisions of Section 59(a) of the Internal Revenue Code,
relating to the alternative minimum tax foreign tax credit, shall not
apply.
SEC. 11. Section 18663 of the Revenue and
Taxation Code is amended to read:
18663. (a) (1) The Franchise Tax Board shall annually (or more
often if necessary) prepare and make available to the Employment
Development Department, wage withholding tables that shall be used by
every employer making payment of any wages to a resident employee
for services performed either within or without this state; or to a
nonresident employee for services performed in this state, to deduct
and withhold from those wages for each payroll period, a tax computed
in a manner as to produce, so far as practicable, with due regard to
the credits for personal exemptions allowable under Section 17054, a
sum that is substantially equivalent to the amount of tax reasonably
estimated to be due under Part 10 (commencing with Section 17001)
resulting from the inclusion in the gross income of the employee the
wages which were subject to withholding.
(2) Notwithstanding paragraph (1), for wages paid on or after
November 1, 2009, and before the effective date of the act amending
this section, wage withholding tables prepared by the Franchise Tax
Board pursuant to this subdivision shall produce, so far as
practicable, with due regard to the credits for personal exemptions
allowable under Section 17054, a sum that will significantly prevent
underwithholding by using an amount equal to 10 percent more than the
sum described in paragraph (1).
(b) (1) (A) For supplemental wages paid on or after January 1,
1992, the rate of withholding that may be applied to supplemental
wages in lieu of the wage withholding tables specified in subdivision
(a) shall be 6 percent.
(B) Notwithstanding subparagraph (A), for supplemental wages paid
on or after November 1, 2009, and before the effective date of the
act amending this section, the rate of withholding shall be 6.6
percent.
(2) For purposes of this subdivision, "supplemental wages"
includes, but is not limited to, bonus payments, overtime payments,
commissions, sales awards, back pay including retroactive wage
increases, and reimbursements for nondeductible moving expenses that
are paid for the same or a different period, or without regard to a
particular period.
(c) (1) For stock options and bonus payments that constitute wages
paid on or after January 1, 2002, the rate of withholding that may
be applied to those stock options and bonus payments in lieu of the
wage withholding tables specified in subdivision (a) shall,
notwithstanding subdivision (b), be 9.3 percent.
(2) Notwithstanding paragraph (2), for stock options and bonus
payments that constitute wages paid on or after November 1, 2009, and
before the effective date of the act amending this section, the rate
of withholding shall be 10.23 percent.
SEC. 12. SEC. 6. This act is an
urgency statute necessary for the immediate preservation of the
public peace, health, or safety within the meaning of Article IV of
the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
In order to provide help for those Californians that are
struggling to pay their bills, it is necessary that this act take
effect immediately.
