Revenue and Taxation Code — Part 6 | RTC — United States — California law | Esheria

Revenue and Taxation Code

Part 6 of 36 · provisions 1,001–1,200

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Starting in the 1995–96 fiscal year, county-assessed property rights or interests must be placed in a separate countywide tax rate area, and the tax rate is calculated using the rates from Section 100. This section suspends a specified California constitutional subparagraph for the 2009–10 fiscal year. This section requires the county auditor to reduce certain 2009–10 property tax apportionments, transfer the reduction amounts to a county fund, and report the calculations. It also lets the Director of Finance grant limited hardship relief, requires later state reimbursement, and allows mandamus if reimbursement is not made on time. This section sets how certain railroad property tax value and revenues must be allocated among tax rate areas, counties, school entities, and related jurisdictions. Supplemental property tax revenues for 1985–86 and later years must be apportioned using the current year’s property tax apportionment factors.

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Provisions of Revenue and Taxation Code

Showing 200 of 7,200

  1. 17276.24.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

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    This section generally disallows net operating loss deductions for taxable years beginning from January 1, 2024 through before January 1, 2027, with exceptions for lower-income taxpayers and for certain years if a Director of Finance determination is made.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276.24. (a) Notwithstanding Sections 17276, 17276.1, 17276.4, 17276.7, and 17276.22, Sections 17276.2, 17276.5, and 17276.6, as those sections read on November 29, 2014, Section 17276.20, as that section read on December 31, 2015, and Section 172 of the Internal Revenue Code, a net operating loss deduction shall not be allowed for any taxable year beginning on or after January 1, 2024, and before January 1, 2027. (b) For any net operating loss or carryover of a net operating loss for which a deduction is denied by subdivision (a), the carryover period under Section 172 of the Internal Revenue Code shall be extended as follows: (1) By one year, for losses incurred in taxable years beginning on or after January 1, 2025, and before January 1, 2026. (2) By two years, for losses incurred in taxable years beginning on or after January 1, 2024, and before January 1, 2025. (3) By three years, for losses incurred in taxable years beginning before January 1, 2024. (c) For a taxable year beginning on or after January 1, 2024, and before January 1, 2027, this section shall not apply to a taxpayer that has either of the following: (1) Net business income of less than one million dollars ($1,000,000) for the taxable year. (2) Modified adjusted gross income of less than one million dollars ($1,000,000) for the taxable year. (d) For purposes of this section: (1) “Business income” means any of the following: (A) Income from a trade or business, whether conducted by the taxpayer or by a passthrough entity owned directly or indirectly by the taxpayer. (B) Income from rental activity. (C) Income attributable to a farming business. (2) “Modified adjusted gross income” means the amount described in paragraph (2) of subdivision (h) of Section 17024.5, determined without regard to the deduction allowed under Section 172 of the Internal Revenue Code, relating to net operating loss deduction. (3) “Passthrough entity” means a partnership or an S corporation. (e) (1) For taxable years beginning on or after January 1, 2025, and before January 1, 2026, this section shall not apply if, by May 14, 2025, the Director of Finance determines that General Fund money over the multiyear forecast is sufficient without the revenue impact of the net operating loss suspension and credit limitation, and pursuant to legislation in the annual Budget Act to not apply this section of law. (2) For taxable years beginning on or after January 1, 2026, and before January 1, 2027, this section shall not apply if, by May 14, 2026, the Director of Finance determines that General Fund money over the multiyear forecast is sufficient without the revenue impact of the net operating loss suspension and credit limitation, and pursuant to legislation in the annual Budget Act to not apply this section of law. (Amended by Stats. 2024, Ch. 42, Sec. 9. (SB 175) Effective June 29, 2024.)
  2. 17276.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

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    No net operating loss deduction is allowed for taxable years beginning on or after January 1, 2002 and before January 1, 2004.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276.3. (a) Notwithstanding Sections 17276, 17276.1, 17276.2, 17276.4, 17276.5, 17276.6, and 17276.7 of this code and Section 172 of the Internal Revenue Code, no net operating loss deduction shall be allowed for any taxable year beginning on or after January 1, 2002, and before January 1, 2004. (b) For any carryover of a net operating loss for which a deduction is denied by subdivision (a), the carryover period under Section 172 of the Internal Revenue Code shall be extended as follows: (1) By one year, for losses incurred in taxable years beginning on or after January 1, 2002, and before January 1, 2003. (2) By two years, for losses incurred in taxable years beginning before January 1, 2002. (Amended by Stats. 2002, Ch. 488, Sec. 2. Effective September 12, 2002.)
  3. 17276.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

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    This section defines who counts as a qualified taxpayer for a Los Angeles Revitalization Zone business and sets rules for net operating loss carryovers and taxpayer section designations.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276.4. (a) The term “qualified taxpayer” as used in Section 17276.1 includes a person or entity engaged in the conduct of a trade or business within the Los Angeles Revitalization Zone designated pursuant to Section 7102 of the Government Code. For purposes of this subdivision, all of the following shall apply: (1) A net operating loss shall not be a net operating loss carryback for any taxable year, and a net operating loss for any taxable year beginning on or after the date the area in which the taxpayer conducts a trade or business is designated the Los Angeles Revitalization Zone shall be a net operating loss carryover to each following taxable year that ends before the Los Angeles Revitalization Zone expiration date or to each of the 15 taxable years following the taxable year of loss, if longer. (2) “Net operating loss” means the loss determined under Section 172 of the Internal Revenue Code, as modified by Section 17276.1, attributable to the taxpayer’s business activities within the Los Angeles Revitalization Zone (as defined in Section 7102 of the Government Code) prior to the Los Angeles Revitalization Zone expiration date. The attributable loss shall be determined in accordance with Chapter 17 (commencing with Section 25101) of Part 11, modified as follows: (A) Loss shall be apportioned to the Los Angeles Revitalization Zone by multiplying total loss from the business by a fraction, the numerator of which is the property factor plus the payroll factor, and the denominator of which is 2. (B) “The Los Angeles Revitalization Zone” shall be substituted for “this state.” (3) A net operating loss carryover shall be a deduction only with respect to the taxpayer’s business income attributable to the Los Angeles Revitalization Zone (as defined in Section 7102 of the Government Code) determined in accordance with subdivision (c). (4) If a loss carryover is allowable pursuant to this section for any taxable year after the Los Angeles Revitalization Zone designation has expired, the Los Angeles Revitalization Zone shall be deemed to remain in existence for purposes of computing the limitation set forth in paragraph (2) and allowing a net operating loss deduction. (5) Attributable income shall be that portion of the taxpayer’s California source business income which is apportioned to the Los Angeles Revitalization Zone. For that purpose, the taxpayer’s business income attributable to sources in this state first shall be determined in accordance with Chapter 17 (commencing with Section 25101) of Part 11. That business income shall be further apportioned to the Los Angeles Revitalization Zone in accordance with Article 2 (commencing with Section 25120) of Chapter 17 of Part 11, modified as follows: (A) Business income shall be apportioned to the Los Angeles Revitalization Zone by multiplying total California business income of the taxpayer by a fraction, the numerator of which is the property factor plus the payroll factor, and the denominator of which is 2. (B) The property factor is a fraction, the numerator of which is the average value of the taxpayer’s real and tangible personal property owned or rented and used in the Los Angeles Revitalization Zone during the taxable year and the denominator of which is the average value of all the taxpayer’s real and tangible personal property owned or rented and used in this state during the taxable year. (C) The payroll factor is a fraction, the numerator of which is the total amount paid by the taxpayer in the Los Angeles Revitalization Zone during the taxable year for compensation, and the denominator of which is the total compensation paid by the taxpayer in this state during the taxable year. (6) “Los Angeles Revitalization Zone expiration date” means the date the Los Angeles Revitalization Zone designation expires, is repealed, or becomes inoperative pursuant to Section 7102, 7103, or 7104 of the Government Code. (b) This section shall be inoperative on the first day of the taxable year beginning on or after the determination date, and each taxable year thereafter, with respect to the taxpayer’s business activities within a geographic area that is excluded from the map pursuant to Section 7102 of the Government Code, or an excluded area determined pursuant to Section 7104 of the Government Code. The determination date is the earlier of the first effective date of a determination under subdivision (c) of Section 7102 of the Government Code occurring after December 1, 1994, or the first effective date of an exclusion of an area from the amended Los Angeles Revitalization Zone under Section 7104 of the Government Code. However, if the taxpayer has any unused loss amount as of the date this section becomes inoperative, that unused loss amount may continue to be carried forward as provided in this section. (c) A taxpayer who qualifies as a “qualified taxpayer” under one or more sections shall, for the taxable year of the net operating loss and any taxable year to which that net operating loss may be carried, designate on the original return filed for each year the section that applies to that taxpayer with respect to that net operating loss. If the taxpayer is eligible to qualify under more than one section, the designation is to be made after taking into account subdivision (d). (d) If a taxpayer is eligible to qualify under this section and either Section 17276.2, 17276.5, or 17276.6 as a “qualified taxpayer,” with respect to a net operating loss in a taxable year, the taxpayer shall designate which section is to apply to the taxpayer. (e) Notwithstanding Section 17276, the amount of the loss determined under this section or Section 17276.2, 17276.5, or 17276.6 shall be the only net operating loss allowed to be carried over from that taxable year and the designation under subdivision (c) shall be included in the election under Section 17276.1. (f) This section shall cease to be operative on December 1, 1998. However, any unused net operating loss may continue to be carried over to following years as provided in this section. (Added by Stats. 1998, Ch. 1039, Sec. 8. Effective September 30, 1998. Applicable as prescribed by Sec. 23(b) of Ch. 1039. Inoperative on December 1, 1998, by its own provisions.)
  4. 17276.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

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    Certain farming businesses affected by Pierce’s disease may get special net operating loss treatment, but only if specific conditions are met.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276.7. (a) The term “qualified taxpayer” as used in Section 17276.1 includes a person or entity that conducts a farming business that is directly affected by Pierce’s disease and its vectors. For purposes of this subdivision, all of the following shall apply: (1) A net operating loss shall not be a net operating loss carryback to any taxable year, and a net operating loss for any taxable year beginning on or after the date that the area in which the taxpayer conducts a farming business is affected by Pierce’s disease and its vectors shall be a net operating loss carryover to each of the nine taxable years following the taxable year of loss, until used. (2) For purposes of this subdivision: (A) “Net operating loss” means the loss determined under Section 172 of the Internal Revenue Code, as modified by Section 17276.1, attributable to the taxpayer’s farming business activities affected by Pierce’s disease and its vectors. That attributable loss shall be determined in accordance with Chapter 17 (commencing with Section 25101) of Part 11, modified for purposes of this subdivision, as follows: (i) A loss shall be apportioned to the area affected by Pierce’s disease and its vectors by multiplying the total loss from the farming business by a fraction, the numerator of which is the property factor plus the payroll factor, and the denominator of which is two. (ii) “The area affected by Pierce’s disease and its vectors” shall be substituted for “this state.” (B) A net operating loss carryover computed under this section shall be allowed as a deduction only with respect to the taxpayer’s farming business income attributable to the area affected by Pierce’s disease and its vectors. (C) Attributable income is that portion of the taxpayer’s California source farming business income that is apportioned to the area affected by Pierce’s disease and its vectors. For that purpose, that taxpayer’s farming business income attributable to sources in this state first shall be determined in accordance with Chapter 17 (commencing with Section 25101) of Part 11. That farming business income shall be further apportioned to the area affected by Pierce’s disease and its vectors in accordance with Article 2 (commencing with Section 25120) of Chapter 17 of Part 11, modified for purposes of this subdivision as follows: (i) Farming business income shall be apportioned to the area affected by Pierce’s disease and its vectors by multiplying the total California farming business income of the taxpayer by a fraction, the numerator of which is the property factor plus the payroll factor, and the denominator of which is two. For purposes of this paragraph: (I) The property factor is a fraction, the numerator of which is the average value of the taxpayer’s real and tangible personal property owned or rented and used in the area affected by Pierce’s disease and its vectors during the taxable year, and the denominator of which is the average value of all the taxpayer’s real and tangible personal property owned or rented and used in this state during the taxable year. (II) The payroll factor is a fraction, the numerator of which is the total amount paid by the taxpayer in the area affected by Pierce’s disease and its vectors during the taxable year for compensation, and the denominator of which is the total compensation paid by the taxpayer in this state during the taxable year. (ii) If a loss carryover is allowable pursuant to this section for any taxable year after Pierce’s disease and its vectors have occurred, the area affected by Pierce’s disease and its vectors shall be deemed to remain in existence for purposes of computing the limitation set forth in subparagraph (B) and allowing a net operating loss deduction. (b) A taxpayer who qualifies as a “qualified taxpayer” under one or more sections shall, for the taxable year of the net operating loss and any taxable year to which that net operating loss may be carried, designate on the original return filed for each year the section that applies to that taxpayer with respect to that net operating loss. If the taxpayer is eligible to qualify under more than one section, the designation is to be made after taking into account subdivision (c). (c) If a taxpayer is eligible to compute its net operating loss under this section and either Section 17276.2, 17276.4, 17276.5, or 17276.6 as a “qualified taxpayer,” with respect to a net operating loss in a taxable year, the taxpayer shall designate which section is to apply to the taxpayer. (d) Notwithstanding Section 17276, the amount of the loss determined under this section or Section 17276.2, 17276.4, 17276.5, or 17276.6 shall be the only net operating loss allowed to be carried over from that taxable year and the designation under subdivision (b) shall be included in the election under Section 17276.1. (e) (1) A qualified taxpayer may utilize the net operating loss carryover allowed by this section only if the Department of Food and Agriculture confirms that the taxpayer’s farming business was affected by Pierce’s disease and its vectors during the year for which the qualified taxpayer seeks a deduction under this section. (2) To make the determination required by this subdivision, the Department of Food and Agriculture shall utilize the definitions in Title 3 of the California Code of Regulations, relating to Pierce’s disease and its vectors. (3) The Franchise Tax Board shall develop a management agreement with the cooperation of the Department of Food and Agriculture to establish procedures by which the Franchise Tax Board secures the information. This subdivision shall not be construed to require the Department of Food and Agriculture to confirm more than the fact that the taxpayer’s farming business was affected by Pierce’s disease and its vectors during the year for which the qualified taxpayer seeks a deduction. (f) This section applies to net operating losses attributable to taxable years beginning on or after January 1, 2001, and before January 1, 2003. (Amended by Stats. 2002, Ch. 524, Sec. 3. Effective January 1, 2003.)
  5. 17278.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

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    A taxpayer may deduct qualifying interindemnity payments, subject to a cap and carryforward rules, and must include refunded deducted amounts in income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17278. (a) To the extent specified in subdivision (b), there shall be allowed as a deduction to a taxpayer those payments of the taxpayer which are made pursuant to an interindemnity arrangement specified in Section 1280.7 of the Insurance Code and which are paid to a trust of members of a cooperative corporation organized and operated under Part 2 (commencing with Section 12200) of Division 3 of Title 1 of the Corporations Code and the members of which consist solely of physicians and surgeons licensed in this state. (b) The deduction authorized by subdivision (a) shall be taken with respect to the taxable year in which the payment is made and shall be taken only to the extent that the payment does not exceed the amount which would otherwise be payable to an independent insurance company for similar coverage for medical malpractice insurance in that taxable year. Any portion of the payment in excess of that amount shall be treated as a payment under the interindemnity arrangement for five succeeding taxable years and may be carried forward as a deduction to those five succeeding taxable years until used. The deduction shall be applied first to the earliest years possible. (c) In the event any payment is refunded by the trust to the taxpayer for any reason, the payment shall be included in the taxpayer’s income for the taxable year in which it is received to the extent that the payment or any portion thereof was taken as a deduction in any earlier taxable year. (d) Any refund of a payment which is made by a trust to a taxpayer shall be reported by the trust to the Franchise Tax Board in the year in which the refund is made. The trust shall furnish the taxpayer with a copy of that report. In the case of any payment to be made to a taxpayer who is not a resident of the State of California in the year in which the refund is made, the Franchise Tax Board may, by regulation, require the trust to withhold an amount from the refund, determined by the Franchise Tax Board to reasonably represent the amount of tax due when that refund is included with other income of the taxpayer, and to transmit the amount withheld to the Franchise Tax Board at a time as it may designate. (e) For purposes of this section: (1) “Payment” means a contribution to or an assessment by an interindemnity arrangement described in Section 1280.7 of the Insurance Code. (2) “Taxpayer” means a physician or surgeon licensed in this state who is a participating member in an interindemnity arrangement described in Section 1280.7 of the Insurance Code. (3) “Trust” means a trust described in subdivision (a). (f) Upon request, the trust shall submit to the Franchise Tax Board the names and membership dates of all participating doctors. (g) The Franchise Tax Board shall prescribe those regulations as may be necessary to carry out the purposes of this section. (Added by renumbering Section 17268 by Stats. 1984, Ch. 1276, Sec. 2. Effective September 19, 1984. Section applicable, by Sec. 5 of Ch. 1276, during taxable years in which federal treatment is similar.)
  6. 17278.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

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    The Section 194 deduction for amortizing reforestation expenditures is available only for qualified timber property located in this state.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17278.5. The deduction allowed by Section 194 of the Internal Revenue Code, relating to amortization of reforestation expenditures, shall be available only with respect to qualified timber property located in this state. (Added by Stats. 1997, Ch. 611, Sec. 36. Effective October 3, 1997.)
  7. 17279.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

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    This section limits certain deductions and elections for amortizing intangibles, especially for tax years before January 1, 1994.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17279. Section 197 of the Internal Revenue Code, relating to amortization of goodwill and certain other intangibles, is modified as follows: (a) (1) Section 13261(g) of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to effective dates, shall apply, except as otherwise provided. (2) (A) If a taxpayer has, at any time, made an election for federal purposes under Section 13261(g)(2) of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to election to have amendments apply to property acquired after July 25, 1991, or Section 13261(g)(3) of that act, relating to elective binding contract exception, a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5 and the federal election shall be binding for purposes of this part. (B) If a taxpayer has not made an election for federal purposes under Section 13261(g)(2) of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to election to have amendments apply to property acquired after July 25, 1991, or Section 13261(g)(3) of that act, relating to elective binding contract exception, with respect to property acquired before August 11, 1993, then the taxpayer shall not be allowed to make an election under Section 13261(g) of the Revenue Reconciliation Act of 1993 (P.L. 103-66), for purposes of this part, with respect to that property. (b) Notwithstanding any other provision of this section, each of the following shall apply: (1) No deduction shall be allowed under this section for any taxable year beginning prior to January 1, 1994. (2) No inference is intended with respect to the allowance or denial of any deduction for amortization in any taxable year beginning before January 1, 1994. (3) In the case of an intangible that was acquired in a taxable year beginning before January 1, 1994, the amount to be amortized shall not exceed the adjusted basis of that intangible as of the first day of the first taxable year beginning on or after January 1, 1994, and that amount shall be amortized ratably over the period beginning with the first month of the first taxable year beginning on or after January 1, 1994, and ending 15 years after the month in which the intangible was acquired. (Amended by Stats. 1997, Ch. 611, Sec. 37. Effective October 3, 1997.)
  8. 17279.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

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    This section limits how Section 198 of the Internal Revenue Code applies in California for qualified environmental remediation expenditures.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17279.4. Section 198 of the Internal Revenue Code, relating to expensing of environmental remediation costs, is modified as follows: (a) For expenditures paid or incurred before January 1, 2004, all of the following shall apply: (1) If a taxpayer has, at any time, made an election for federal purposes under Section 198(a) of the Internal Revenue Code to have Section 198 of the Internal Revenue Code apply to a qualified environmental remediation expenditure, Section 198 of the Internal Revenue Code shall apply to that qualified environmental remediation expenditure for state purposes, a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5, and the federal election shall be binding for purposes of this part. (2) If a taxpayer fails to make an election for federal purposes under Section 198(a) of the Internal Revenue Code to have Section 198 of the Internal Revenue Code apply to a qualified environmental remediation expenditure, an election under Section 198(a) of the Internal Revenue Code shall not be allowed for state purposes, Section 198 of the Internal Revenue Code shall not apply to that qualified environmental remediation expenditure for state purposes, and a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5. (b) No inference as to the proper treatment for purposes of this part of qualified environmental remediation expenditures paid or incurred in taxable years beginning before January 1, 1998, shall be made. (c) Section 198(h) of the Internal Revenue Code, relating to termination, shall not apply. (d) Section 198 of the Internal Revenue Code, relating to expensing of environmental remediation costs, shall not apply to expenditures paid or incurred after December 31, 2003. (Amended by Stats. 2005, Ch. 691, Sec. 33. Effective October 7, 2005.)
  9. 17279.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 198A of the Internal Revenue Code, about expensing qualified disaster expenses, does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17279.6. Section 198A of the Internal Revenue Code, relating to expensing of qualified disaster expenses, shall not apply. (Added by Stats. 2010, Ch. 14, Sec. 29. (SB 401) Effective January 1, 2011.)
  10. 17280.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section limits denial of deductions for tax-exempt income items and lets the Franchise Tax Board prescribe rules for apportioning and allocating deductions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17280. (a) No deduction shall be denied as provided by Section 265 of the Internal Revenue Code, relating to expenses and interest relating to tax-exempt income. (b) No deduction shall be allowed for any of the following: (1) Any amount otherwise allowable as a deduction which is allocable to one or more classes of income other than interest (whether or not any amount of income of that class or classes is received or accrued) wholly exempt from the taxes imposed by this part, or any amount otherwise allowable under Section 212 of the Internal Revenue Code (relating to expenses for production of income) which is allocable to interest (whether or not any amount of such interest is received or accrued) wholly exempt from the taxes imposed by this part. (2) Interest on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from the taxes imposed by this part. The proper apportionment and allocation of the deduction with respect to taxable and nontaxable income shall be determined under rules and regulations prescribed by the Franchise Tax Board. (3) Interest on indebtedness incurred or continued to purchase or carry shares of stock of a management company or series thereof which during the taxable year of the holder thereof distributes exempt-interest dividends. (c) For purposes of paragraph (2) of subdivision (b): (1) “Interest” includes any amount paid or incurred— (A) By any person making a short sale in connection with personal property used in that short sale, or (B) By any other person for the use of any collateral with respect to that short sale. (2) If— (A) The taxpayer provides cash as collateral for any short sale, and (B) The taxpayer receives no material earnings on that cash during the period of the sale, subparagraph (A) of paragraph (1) shall not apply to that short sale. (d) No deduction shall be denied under this section for interest on a mortgage on, or real property taxes on, the home of the taxpayer by reason of the receipt of an amount as either of the following: (1) A military housing allowance. (2) A parsonage allowance excludable from gross income under Section 107 of the Internal Revenue Code. (Amended by Stats. 1988, Ch. 970, Sec. 1.)
  11. 17282.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Taxpayers may not claim deductions for income directly derived from criminal profiteering activity or closely related activities.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17282. (a) In computing taxable income, deductions, including deductions for cost of goods sold, shall not be allowed to any taxpayer from any of his or her gross income directly derived from any act or omission of criminal profiteering activity, as defined in Section 186.2 of the Penal Code, or as defined in Chapter 6 (commencing with Section 11350) of Division 10 of the Health and Safety Code, or Article 5 (commencing with Section 750) of Chapter 1 of Part 2 of Division 1 of the Insurance Code; and deductions shall not be allowed to any taxpayer from any of his or her gross income derived from any other activities which directly tend to promote or to further, or are directly connected or associated with, those acts or omissions. (b) A prior, final determination by a court of competent jurisdiction of this state in any criminal proceedings or any proceeding in which the state, county, city and county, city, or other political subdivision was a party thereto on the merits of the legality of the activities of a taxpayer, or predecessor in interest of a taxpayer, shall be required in order for subdivision (a) to apply and shall be binding upon the Franchise Tax Board and the State Board of Equalization. (c) (1) Except as provided in paragraphs (2) and (3), this section shall be applied with respect to taxable years that have not been closed by a statute of limitations, res judicata, or otherwise as of September 14, 1982. (2) The amendments made to this section by Chapter 962 of the Statutes of 1984 shall be applied with respect to taxable years that have not been closed by a statute of limitations, res judicata, or otherwise as of January 1, 1985. (3) The amendments made to this section by Chapter 454 of the Statutes of 2011 shall be applied with respect to taxable years that have not been closed by a statute of limitations, res judicata, or otherwise as of the effective date of that act. (Amended by Stats. 2012, Ch. 162, Sec. 171. (SB 1171) Effective January 1, 2013.)
  12. 17286.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section denies a deduction for payments that would be unlawful if U.S. law applied to the payment and to the official or employee involved, in addition to the deduction denied under Internal Revenue Code section 162(c)(1).

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17286. In addition to the deduction denied under Section 162(c)(1) of the Internal Revenue Code, relating to payments made to officials or employees of a foreign government, no deduction shall be allowed for any payment that would be unlawful under the laws of the United States, if those laws were applicable to the payment and to the official or employee. (Added by Stats. 1983, Ch. 498, Sec. 143. Effective July 28, 1983.)
  13. 17287.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section changes Section 269A so it says “California Personal Income Tax” instead of “Federal income tax.”

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17287. Section 269A of the Internal Revenue Code is modified by substituting “California Personal Income Tax” for “Federal income tax.” (Amended by Stats. 1999, Ch. 987, Sec. 34. Effective October 10, 1999.)
  14. 17299.8.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    The Franchise Tax Board may disallow a deduction for personal-service payments if the recipient does not report the payments when required.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17299.8. The Franchise Tax Board may disallow a deduction under this part to an individual or entity for amounts paid as remuneration for personal services if that individual or entity fails to report the payments required under Section 13050 of the Unemployment Insurance Code or Section 18631 on the date prescribed therefor (determined with regard to any extension of time for filing). (Amended by Stats. 2007, Ch. 156, Sec. 1. Effective January 1, 2008.)
  15. 17299.9.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    A real-property taxpayer who fails to provide required Section 18642 information, or provides false, misleading, or incomplete information, cannot claim deductions for interest, taxes, depreciation, or amortization tied to that property.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17299.9. (a) Notwithstanding any other provisions in this part, in the case of a taxpayer who owns real property and has either failed to provide information required pursuant to Section 18642, or has provided information which is either false, misleading, or incomplete in the information return required pursuant to Section 18642, no deduction shall be allowed for interest, taxes, depreciation, or amortization paid or incurred with respect to that real property, as provided in subdivision (b). (b) No deduction shall be allowed for the items provided in subdivision (a) from 60 days after the due date for filing the information return required pursuant to Section 18642 until the date the Franchise Tax Board determines that all provisions of Section 18642 have been complied with. (c) In the event the period of noncompliance does not cover an entire taxable year, the deductions shall be denied at the rate of one-twelfth for each full month during the period of noncompliance. (Amended by Stats. 1993, Ch. 31, Sec. 10. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  16. 17301.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. )

    Verify source ↗

    For nonresidents and part-year residents, the apportionment and allocation of deductions for computing taxable income are determined by Franchise Tax Board rules and regulations.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. ) ## 17301. For purposes of this part, in the case of a nonresident or part-year resident, the proper apportionment and allocation of the deductions in computing “taxable income of a nonresident or part-year resident” computed under paragraph (1) of subdivision (i) of Section 17041 with respect to sources of income within and without the state shall be determined under rules and regulations prescribed by the Franchise Tax Board. (Amended by Stats. 2001, Ch. 920, Sec. 5. Effective January 1, 2002.)
  17. 17301.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. )

    Verify source ↗

    This section defines how California adjusted gross income is calculated for nonresidents and part-year residents.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. ) ## 17301.3. For purposes of this part, in the case of a nonresident or part-year resident, the term “California adjusted gross income” 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 adjusted gross income, regardless of source. (b) For any part of the taxable year during which the taxpayer was not a resident of this state, adjusted gross income derived from sources within this state, determined in accordance with Article 9 (commencing with Section 17301) of Chapter 3 and Chapter 11 (commencing with Section 17951). (Amended by Stats. 2004, Ch. 13, Sec. 3. Effective February 11, 2004.)
  18. 17301.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. )

    Verify source ↗

    For nonresidents and part-year residents, “total adjusted gross income” is defined as adjusted gross income for the full year under Section 17072, regardless of source, with specified cross-references applied.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. ) ## 17301.4. For purposes of this part, in the case of a nonresident or part-year resident, the term “total adjusted gross income” means adjusted gross income for the entire year determined under Section 17072 regardless of source, taking into account paragraph (2) of subdivision (h) of Section 17024.5 and Section 17203. (Added by Stats. 2001, Ch. 920, Sec. 7. Effective January 1, 2002.)
  19. 17301.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. )

    Verify source ↗

    For a nonresident or part-year resident, “total taxable income” means the taxpayer’s full-year taxable income under Section 17073, regardless of source.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. ) ## 17301.5. For purposes of this part, in the case of a nonresident or part-year resident, the term “total taxable income” means taxable income for the entire year determined under Section 17073 regardless of source. (Added by Stats. 2001, Ch. 920, Sec. 8. Effective January 1, 2002.)
  20. 17302.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. )

    Verify source ↗

    For nonresidents and part-year residents, the alimony deduction is allowed in computing taxable income, using a capped ratio tied to California adjusted gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. ) ## 17302. (a) In the case of a nonresident or part-year resident, the deduction provided by Section 215 of the Internal Revenue Code, relating to alimony, etc., payments, as it read on January 1, 2015, shall be allowed in computing “taxable income of a nonresident or part-year resident” in the same ratio (not to exceed 1.00) that California adjusted gross income (as defined in Section 17301.3), computed without regard to the alimony deduction, bears to total adjusted gross income (as defined in Section 17301.4), computed without regard to the alimony deduction. (b) Subdivision (a) shall not apply for any divorce or separation instrument executed after December 31, 2025, or for any divorce or separation instrument executed on or before December 31, 2025, and modified after that date, if the modification expressly provides that the amendments made by this subdivision apply to such modification. (c) This section shall remain in effect only until December 1, 2027, and as of that date is repealed. (Amended by Stats. 2025, Ch. 231, Sec. 45. (SB 711) Effective October 1, 2025. Repealed as of December 1, 2027, by its own provisions.)
  21. 17304.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. )

    Verify source ↗

    For a nonresident or part-year resident, certain deductions are included in California taxable income only in proportion to California adjusted gross income versus total adjusted gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. ) ## 17304. In the case of a nonresident or part-year resident, itemized deductions allowed as a deduction for the taxable year under Section 63 of the Internal Revenue Code, as modified by Section 17073, or the standard deduction (as provided in Section 17073.5), shall be allowed in computing “taxable income of a nonresident or part-year resident” in the ratio (not to exceed 1.00) that California adjusted gross income (as defined in Section 17301.3) bears to total adjusted gross income (as defined in Section 17301.4). (Added by Stats. 2001, Ch. 920, Sec. 11. Effective January 1, 2002.)
  22. 17306.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. )

    Verify source ↗

    For nonresidents and part-year residents, certain adjusted gross income references are treated as California adjusted gross income when computing taxable income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. ) ## 17306. In the case of a nonresident or part-year resident, in computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, references to “adjusted gross income” for purposes of computing limitations based upon adjusted gross income, shall mean “California adjusted gross income” (as defined in Section 17301.3) for the same taxable year without regard to the limitation used pursuant to paragraph (2) of subdivision (h) of Section 17024.5 in computing “total adjusted gross income” (as defined in Section 17301.4) for that taxable year. (Added by Stats. 2001, Ch. 920, Sec. 12. Effective January 1, 2002.)
  23. 17307.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. )

    Verify source ↗

    For nonresidents and part-year residents, certain references to “compensation” or “earned income” must be read using the amount included in California adjusted gross income, without the Section 17203 limitation.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 9. Special Rules for Nonresidents and Part-Year Residents [17301 - 17307] ( Heading of Article 9 amended by Stats. 1984, Ch. 938, Sec. 13.5. ) ## 17307. In the case of a nonresident or part-year resident, in computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, for purposes of computing limitations on the deductions described in this section, any reference to “compensation” or “earned income” shall be a reference to the amount of “compensation” or “earned income” required to be included in computing “California adjusted gross income” (as defined in Section 17301.3) for the same taxable year without regard to the limitation used pursuant to Section 17203 in computing “total adjusted gross income” (as defined in Section 17301.4) for that taxable year. (a) The deduction allowed by Section 219 of the Internal Revenue Code. (b) The deductions allowed by Sections 162(1) and 404 of the Internal Revenue Code in the case of an individual who is an employee within the meaning of Section 401(c)(1) of the Internal Revenue Code. (Added by Stats. 2001, Ch. 920, Sec. 13. Effective January 1, 2002.)
  24. 17321.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. )

    Verify source ↗

    This section makes Subchapter C of Chapter 1 of Subtitle A of the Internal Revenue Code apply to corporate distributions and adjustments, unless another provision says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. ) ## 17321. Subchapter C of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to corporate distributions and adjustments, shall apply, except as otherwise provided. (Amended by Stats. 1993, Ch. 873, Sec. 16. Effective October 6, 1993.)
  25. 17321.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. )

    Verify source ↗

    The stated federal tax amendments do not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. ) ## 17321.1. The amendments to Section 367(a) of the Internal Revenue Code as enacted by Section 14102 of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), relating to repeal of the exception for transfers of certain property used in the active conduct of a trade or business, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 46. (SB 711) Effective October 1, 2025.)
  26. 17322.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. )

    Verify source ↗

    For this tax rule, the limitation periods in Sections 19057 and 19371 are the ones extended by one year for purposes of IRC Section 302(c)(2).

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. ) ## 17322. For purposes of Section 302(c)(2) of the Internal Revenue Code, the periods of limitation to be extended for one year are the periods provided in Sections 19057 and 19371. (Amended by Stats. 1993, Ch. 31, Sec. 11. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  27. 17322.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. )

    Verify source ↗

    Section 381(c)(20) of the Internal Revenue Code, relating to carryforward of disallowed business interest, does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. ) ## 17322.5. Section 381(c)(20) of the Internal Revenue Code, relating to carryforward of disallowed business interest, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 47. (SB 711) Effective October 1, 2025.)
  28. 17323.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. )

    Verify source ↗

    This section says certain federal tax rules do not apply for the listed Internal Revenue Code provisions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. ) ## 17323. (a) Section 382(n) of the Internal Revenue Code, relating to special rule for certain ownership changes, shall not apply. (b) Section 382(d)(3) of the Internal Revenue Code, relating to application to carryforward of disallowed interest, shall not apply. (c) The amendments made by Section 13301(b)(3) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 382(k)(1) of the Internal Revenue Code, relating to loss corporation, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 48. (SB 711) Effective October 1, 2025. Applicable to taxable years beginning on or after January 1, 2015, as provided in Sec. 41 of Stats. 2015, Ch. 359.)
  29. 17324.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. )

    Verify source ↗

    This section says the cited federal tax rule for real estate investment trusts does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 4. Corporate Distributions and Adjustments [17321 - 17324] ( Chapter 4 repealed and added by Stats. 1983, Ch. 488, Sec. 33. ) ## 17324. Section 312(k)(3)(B)(ii) of the Internal Revenue Code, relating to special rule for real estate investment trusts, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 49. (SB 711) Effective October 1, 2025.)
  30. 175.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 3. Limitation of Actions [175 - 177] ( Chapter 3 added by Stats. 1945, Ch. 1017. )

    Verify source ↗

    Deeds issued to taxing agencies for delinquent property taxes or assessments are treated as valid unless a court challenge is started within the required one-year period.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 3. Limitation of Actions [175 - 177] ( Chapter 3 added by Stats. 1945, Ch. 1017. ) ## 175. All deeds heretofore and hereafter issued to any taxing agency, including taxing agencies which have their own system for the levying and collection of taxes, by reason of the delinquency of property taxes or assessments levied by any taxing agency or revenue district, shall be conclusively presumed to be valid unless held to be invalid in an appropriate proceeding in a court of competent jurisdiction to determine the validity of the deed commenced within one year after the execution of the deed, or within one year after the effective date of this section, whichever is later. These proceedings may be prosecuted within the time limits specified above in the manner and subject to the provisions of Sections 3618 to 3636, inclusive. (Amended by Stats. 1988, Ch. 830, Sec. 5. Applicable July 1, 1989, by Sec. 31 of Ch. 830.)
  31. 1750.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 1. Findings and Declarations [1750- 1750.] ( Article 1 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    The Legislature states that county boards of supervisors and assessment appeals boards can serve as county boards of equalization, including when two or more counties jointly create boards.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 1. Findings and Declarations [1750- 1750.] ( Article 1 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1750. The Legislature finds and declares all of the following: (a) Section 16 of Article XIII of the California Constitution provides that the county board of supervisors, or one or more assessment appeals boards created by the county board of supervisors, constitutes the county board of equalization for a county. (b) However, two or more county boards of supervisors may, under Section 16, jointly create one or more assessment appeals boards to serve as the county board of equalization for each of the participating counties. (c) Section 16 additionally requires the Legislature to provide for the procedure by which two or more county boards of supervisors may jointly create one or more assessment appeals boards. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  32. 17501.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    This section sets California rules for deferred compensation, elective deferrals, and related tax treatment.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17501. (a) Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to deferred compensation, shall apply, except as otherwise provided. (b) Notwithstanding the specified date contained in paragraph (1) of subdivision (a) of Section 17024.5, Part I of Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to pension, profitsharing, stock bonus plans, etc., and Part III of Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to rules relating to minimum funding standards and benefit limitations, shall apply, except as otherwise provided, without regard to taxable year to the same extent as applicable for federal income tax purposes. (c) For taxable years beginning before January 1, 2025, the maximum amount of elective deferrals (as defined in Section 402(g)(3)) for the taxable year that may be excluded from gross income under Section 402(g) of the Internal Revenue Code, as applicable for state purposes, shall not exceed the amount of elective deferrals that may be excluded from gross income under Section 402(g) of the Internal Revenue Code, as in effect on January 1, 2010, including additional elective deferrals under Section 414(v) of the Internal Revenue Code, as in effect on January 1, 2010. (d) (1) For taxable years beginning on or after January 1, 2002, the basis of any person in the plan, account, or annuity shall be increased by the amount of elective deferrals not excluded as a result of the application of the elective deferral limitations imposed by subdivision (c). (2) Any basis described in paragraph (1) shall be recovered in the manner specified in Section 17085. (e) Notwithstanding the limitations provided in subdivision (c), any income attributable to elective deferrals in taxable years beginning on or after January 1, 2002, in conformance with Part I of Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, as applicable for federal and state purposes, shall not be includable in the gross income of the individual for whose benefit the plan or account was established until distributed pursuant to the plan or by operation of law. (f) (1) Section 408A(e)(1)(C) of the Internal Revenue Code, relating to qualified rollover contribution, shall not apply. (2) In the case of any distribution made under Section 529(c)(3)(E) of the Internal Revenue Code, relating to the special rollover to Roth IRAs from long-term qualified tuition programs, treated for federal income tax purposes as a “qualified rollover contribution” under Section 408A(e)(1)(C) of the Internal Revenue Code, the amount of that distribution shall, notwithstanding Section 529 or Section 408A of the Internal Revenue Code to the contrary, be includable in the gross income of the distributee in the manner as provided under Section 72 of the Internal Revenue Code. (3) Notwithstanding any other provision, no increase in the basis of the Roth IRA, as defined in Section 408A of the Internal Revenue Code, shall result from any amount distributed as described in this subdivision. (Amended by Stats. 2025, Ch. 231, Sec. 50. (SB 711) Effective October 1, 2025.)
  33. 17501.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    This section says certain federal tax amendments apply for specified California tax parts, for distributions after December 31, 2001, unless another rule says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17501.5. The amendments made by Section 641 of the Economic Growth and Tax Relief Reconciliation Act of 2001 (Public Law 107-16) to the following provisions of the Internal Revenue Code or other federal law shall apply for purposes of this part, Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001), with respect to distributions after December 31, 2001, except as otherwise provided: (a) Section 72, relating to annuities and certain proceeds of endowment and life insurance contracts. (b) Section 219, relating to retirement savings. (c) Section 401, relating to qualified pension, profit-sharing, and stock bonus plans. (d) Section 402, relating to taxability of beneficiary of employees’ trust. (e) Section 403, relating to taxation of employee annuities. (f) Section 408, relating to individual retirement accounts. (g) Section 415, relating to limitations on benefits and contribution under qualified plans. (h) Section 457, relating to deferred compensation plans of state and local governments and tax-exempt organizations. (i) Subsections (h)(3) and (h)(5) of Section 1122 of the Tax Reform Act of 1986. (Added by Stats. 2002, Ch. 30, Sec. 1. Effective April 26, 2002. Applicable as provided in Sec. 4 of Ch. 30.)
  34. 17501.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    Federal tax code amendments are applied for certain trustee-to-trustee transfers after December 31, 2001, unless another provision says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17501.7. The amendments made by Section 647 of the Economic Growth and Tax Relief Reconciliation Act of 2001 (Public Law 107-16) to the following provisions of the Internal Revenue Code shall apply for purposes of this part, Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001), with respect to trustee-to-trustee transfers after December 31, 2001, except as otherwise provided: (a) Section 403, relating to taxation of employee annuities. (b) Section 457, relating to deferred compensation plans of state and local governments and tax-exempt organizations. (Added by Stats. 2002, Ch. 30, Sec. 2. Effective April 26, 2002. Applicable as provided in Sec. 4 of Ch. 30.)
  35. 17501.8.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    This section says certain federal tax amendments apply for specified California tax parts, and requires the Legislative Analyst’s Office to submit a report by October 1, 2029.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17501.8. (a) The following amendments made by the Consolidated Appropriations Act, 2023 (Public Law 117-328) shall apply for purposes of this part, Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001) except as otherwise provided: (1) The amendments made by Section 108 of Division T of that act to Section 219(b)(5)(C) of the Internal Revenue Code, relating to indexing IRA catch-up limit. (2) The amendments made by Section 109 of Division T of that act to Section 414(v) of the Internal Revenue Code, relating to higher catch-up limit to apply at 60 to 63 years of age, inclusive. (3) The amendments made by Section 117 of Division T of that act to Section 414(v)(2) of the Internal Revenue Code, relating to contribution limit for simple plans. (b) (1) For the purposes of complying with Section 41, as it pertains to the deductions expanded by this section, the Legislature finds and declares as follows: (A) The specific goal, purpose, and objective of this bill is to conform state law to changes in federal law in order to reduce complications relating to mismatches in basis of retirement accounts for federal income tax purposes compared to state income tax purposes. (B) The performance indicators used by the Legislature to determine if the deductions are achieving the stated goal shall be the number of taxpayers making contributions that would, but for the expansion of deductions pursuant to this section, be included in income for state purposes, and the total dollar value of those contributions. (2) The Legislative Analyst’s Office shall, no later than October 1, 2029, submit a report to the Legislature, in accordance with Section 9795 of the Government Code, that estimates the number of taxpayers making contributions to retirement accounts that, but for the expansion of deductions provided by this section, would be included in income, and estimates of the total dollar value of those contributions, to the extent data is available. (Added by Stats. 2025, Ch. 231, Sec. 51. (SB 711) Effective October 1, 2025.)
  36. 17502.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    This section sets special tax treatment for certain California qualified stock options and limits when they qualify.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17502. (a) In addition to the application of Part II (commencing with Section 421) of Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to certain stock options, paragraphs (1), (2), and (3) of Section 421(a) of the Internal Revenue Code shall also apply to any California qualified stock option that is granted to an individual whose earned income from the corporation granting the California qualified stock option for the taxable year in which that option is exercised does not exceed forty thousand dollars ($40,000). In the event that the option does not meet the necessary qualifications, the option shall be treated as a nonqualified stock option. (b) For purposes of this section, “California qualified stock option” means a stock option that is issued and exercised pursuant to this section and that is designated by the corporation issuing the option as a California qualified stock option at the time the option is granted. (c) (1) This section shall apply only to those stock options that are issued on or after January 1, 1997, and before January 1, 2002, by a corporation to its employee and are exercised by the employee, while employed by the corporation that issued those stock options (or within three months thereof, or within one year thereof if permanently and totally disabled as defined in Section 22(e)(3) of the Internal Revenue Code), during the taxable year with respect to any class of shares, or combination thereof, issued by the corporation, to the extent that the number of shares transferable by the exercise of the options does not exceed a total of 1,000 and have a combined fair market value of less than one hundred thousand dollars ($100,000). The combined fair market value of any stock shall be determined as of the time the option with respect to that stock is granted. (2) Paragraph (1) shall be applied by taking options into account in the order in which they were granted. (d) In the case of a California qualified stock option, no amount shall be included in the gross income of the employee until the time of the disposition of the option (or the stock acquired upon exercise of the option). No deduction shall be allowed under Section 162 of the Internal Revenue Code to the employer on the grant or exercise of a California qualified stock option. (e) Subdivision (d) shall not apply to any stock option for which an election has been made under Section 83(b) of the Internal Revenue Code, relating to election to include in gross income in year of transfer. (Amended by Stats. 1997, Ch. 604, Sec. 7. Effective October 3, 1997.)
  37. 17504.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    This section modifies federal rules for beneficiaries of employees’ trusts and imposes a California tax on lump-sum distributions, which the recipient must pay.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17504. (a) The provisions of Section 402 of the Internal Revenue Code, relating to taxability of beneficiaries of employees’ trusts, shall be modified as follows: (1) The amendments and transitional rules made by Public Law 99-514 shall be applicable to this part for the same transactions and the same years as they are applicable for federal purposes, except as otherwise provided. (2) The basis of any person in an employees’ trust shall include the amount of any contributions made prior to January 1, 1987, which were not allowed as a deduction under former Sections 17503 and 17513 (including predecessor Section 17524 repealed by Chapter 488 of the Statutes of 1983) relating to special limitations for self-employed individuals. (b) (1) There is hereby imposed a tax on lump-sum distributions computed in accordance with the provisions of Section 402(d) of the Internal Revenue Code using the rates and brackets prescribed in subdivision (a) of Section 17041 (without regard to Section 17045) in lieu of the rates and brackets in Section 1(c) of the Internal Revenue Code. The recipient of the lump-sum distribution shall be liable for the tax imposed by this paragraph. (2) For purposes of this part, the provisions of Section 1122(h) of Public Law 99-514, as modified by Section 1011A(b) of Public Law 100-647, shall apply, except as modified by each of the following: (A) The provisions of Section 1122(h)(3)(B) of Public Law 99-514 shall be modified to refer to Section 17041 rather than Section 1 of the Internal Revenue Code of 1986. (B) The provisions of Section 1122(h)(3)(B)(ii) of Public Law 99-514 shall be modified to provide a tax rate of 5.5 percent rather than a tax rate of 20 percent. (C) The provisions of Section 1122(h)(5) of Public Law 99-514 shall be modified to refer to Section 17041 rather than Section 1 of the Internal Revenue Code of 1954. (3) For purposes of this section, a taxpayer shall elect the same special lump-sum distribution averaging method for purposes of this part as that elected for federal purposes under Section 402(d)(4)(B) of the Internal Revenue Code. (4) The provisions of Section 1124(a) of Public Law 99-514, as amended by Section 1011A(d) of Public Law 100-647, shall apply. (5) The provisions of Section 1124(c) of Public Law 99-514, as added by Section 1011A(d) of Public Law 100-647, shall apply. (Amended by Stats. 1993, Ch. 873, Sec. 18. Effective October 6, 1993.)
  38. 17506.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    This section changes the treatment of employee annuities so that basis includes certain pre-1987 contributions that were not previously deductible.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17506. The provisions of Section 403 of the Internal Revenue Code, relating to taxation of employee annuities, shall be modified to provide that the basis of any person in an employee annuity shall include the amount of any contributions made prior to January 1, 1987, which were not allowed as a deduction under former Sections 17503 and 17513 of the Revenue and Taxation Code (including predecessor Section 17524 repealed by Chapter 488 of the Statutes of 1983) relating to special limitations for self-employed individuals. (Amended by Stats. 1994, Ch. 1243, Sec. 23. Effective September 30, 1994.)
  39. 17507.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    This section modifies certain Internal Revenue Code rules for individual retirement accounts and requires a copy of specified federal reports to be filed with the Franchise Tax Board.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17507. The provisions of Section 408 of the Internal Revenue Code, relating to individual retirement accounts, shall be modified as follows: (a) The following provisions shall be incorporated into Section 408(e) of the Internal Revenue Code: (1) In the case of a plan in existence in taxable year 1975 where contributions were made pursuant to, and in conformance with, Section 408 or 409 of the Internal Revenue Code of 1954, as amended by the Employee Retirement Income Security Act of 1974 (Public Law 93-406), any net income attributable to the 1975 contribution shall not be includable in the gross income, for taxable year 1977 or succeeding taxable years, of the individual for whose benefit the plan was established until distributed pursuant to the provisions of the plan or by operation of law. (2) In the case of a simplified employee pension, where contributions are also made pursuant to, and in conformance with, the provisions of Section 408(k) of the Internal Revenue Code of 1954, the net income attributable to the nondeductible portion of those contributions shall not be includable in the gross income of the individual for whose benefit the plan was established for the taxable year or for succeeding taxable years until distributed pursuant to the provisions of the plan or by operation of law. (3) Notwithstanding the limitations provided in former Section 17272 (as amended by Chapter 1461 of the Statutes of 1985) with respect to the amount of deductible contributions and individuals eligible for the deduction, any income attributable to contributions made to a plan in existence in taxable years beginning on or after January 1, 1982, in conformance with Sections 219, 220, 408, and 409 of the Internal Revenue Code of 1954, shall not be includable in the gross income of the individual for whose benefit the plan was established until distributed pursuant to the provisions of the plan or by operation of law. (b) The provisions of Section 408(d) of the Internal Revenue Code, relating to the tax treatment of distributions, are modified as follows: (1) For taxable years beginning on or after January 1, 1982, and before January 1, 1987, the basis of any person in the account or annuity is the amount of contributions not allowed as a deduction under former subdivision (a), (e), or (g) of Section 17272 (as amended by Chapter 1461 of the Statutes of 1985) on account of the purchase of the account or annuity. (2) For purposes of paragraph (1), the rules for recovery of basis shall be governed by Section 17085. (c) A copy of the report, which is required to be filed with the Secretary of the Treasury under Section 408(i) or 408(l) of the Internal Revenue Code, shall be filed with the Franchise Tax Board at the same time and in the same manner as specified in those sections. (Amended by Stats. 1997, Ch. 611, Sec. 39. Effective October 3, 1997.)
  40. 17508.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    Section 408(o) of the Internal Revenue Code applies, and the required information must be reported on the Chapter 2 return at the time and in the manner specified there.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17508. The provisions of Section 408(o) of the Internal Revenue Code, relating to definitions and rules relating to nondeductible contributions to individual retirement plans, shall be applicable and the information required to be reported shall be reported on the return filed pursuant to Chapter 2 (commencing with Section 18501) of Part 10.2 at the time and in the manner as specified in that section. (Amended by Stats. 1993, Ch. 31, Sec. 12. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  41. 17508.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2013, this section changes two Internal Revenue Code references from 20 percent to five percent.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17508.2. For taxable years beginning on or after January 1, 2013, Section 409A of the Internal Revenue Code is modified as follows: (a) By substituting the phrase “five percent” in lieu of the phrase “20 percent” in Section 409A(a)(1)(B)(i)(II) of the Internal Revenue Code. (b) By substituting the phrase “five percent” in lieu of the phrase “20 percent” in Section 409A(b)(5)(A)(ii) of the Internal Revenue Code. (Added by Stats. 2013, Ch. 536, Sec. 1. (AB 1173) Effective January 1, 2014.)
  42. 17509.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    Sections 413(b)(6) and 413(c)(5) of the Internal Revenue Code, relating to liability for funding tax, do not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17509. Sections 413(b)(6) and 413(c)(5) of the Internal Revenue Code, relating to liability for funding tax, do not apply. (Amended by Stats. 2003, Ch. 185, Sec. 12. Effective January 1, 2004.)
  43. 1751.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 2. Definitions [1751- 1751.] ( Article 2 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    This section defines “multijurisdictional assessment appeals board” and “participating county” for this chapter.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 2. Definitions [1751- 1751.] ( Article 2 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1751. For the purposes of this chapter, the following definitions shall apply: (a) “Multijurisdictional assessment appeals board” or “board” means a board established by two or more counties pursuant to this chapter meeting as an assessment appeals board on behalf of the participating counties. (b) “Participating county” means a county that has entered into an agreement, by enactment of an ordinance pursuant to Section 1752.1, to create a multijurisdictional assessment appeals board for the purpose of equalizing the valuation of assessed property. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  44. 17510.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. )

    Verify source ↗

    Section 7701(j) of the Internal Revenue Code applies to Federal Thrift Savings Funds, except as otherwise provided.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 5. Deferred Compensation [17501 - 17510] ( Chapter 5 repealed and added by Stats. 1983, Ch. 488, Sec. 36. ) ## 17510. Section 7701(j) of the Internal Revenue Code, relating to Federal Thrift Savings Funds, applies, except as otherwise provided. (Amended by Stats. 2003, Ch. 185, Sec. 13. Effective January 1, 2004.)
  45. 1752.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    County boards of supervisors from two or more counties may create a multijurisdictional assessment appeals board, and participating county boards or related assessment appeals boards do not act as the county board of equalization while that board exists.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1752. (a) The boards of supervisors of two or more counties may establish a multijurisdictional assessment appeals board pursuant to this chapter to equalize the valuation of taxable property within each participating county. (b) A board of supervisors of a participating county, or any assessment appeals board created by a board of supervisors of a participating county, shall not constitute the county board of equalization during the period in which a multijurisdictional assessment appeals board exists pursuant to this chapter. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  46. 1752.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    Each participating county must enact an ordinance establishing a multijurisdictional assessment appeals board.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1752.1. A multijurisdictional assessment appeals board shall be established by enactment of an ordinance, which shall be operative for not less than four years, by each participating county. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  47. 1752.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    Participating counties may adopt notice and procedure rules for the multijurisdictional assessment appeals board.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1752.2. The participating counties may adopt a set of rules of notice and procedures for the multijurisdictional assessment appeals board, as may be required to facilitate their work and to ensure uniformity in the processing and decision of equalization petitions. (Amended by Stats. 2021, Ch. 433, Sec. 6. (SB 825) Effective January 1, 2022. Repealed on January 1, 2028, pursuant to Section 1756.)
  48. 1752.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    The multijurisdictional assessment appeals board must follow specified Chapter 1 procedures unless this chapter says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1752.3. Unless otherwise specified in this chapter, the multijurisdictional assessment appeals board shall operate in accordance with Article 1 (commencing with Section 1601), Article 1.5 (commencing with Section 1620), Article 1.7 (commencing with Section 1636), and Article 1.9 (commencing with Section 1642) of Chapter 1, as those provisions relate to the functions of assessment appeals boards. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  49. 1752.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    A multijurisdictional assessment appeals board may conduct hearings remotely, and if it does, it must comply with this chapter and any applicable county board of supervisors rules and procedures.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 3. Establishment and Procedure [1752 - 1752.4] ( Article 3 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1752.4. (a) Nothing in this chapter or in any other law shall be construed to prohibit a multijurisdictional assessment appeals board from conducting hearings remotely. Remotely conducted hearings include, but are not limited to, the use of video, audio, and telephonic means for remote appearances; the electronic exchange and authentication of documentary evidence; e-filing and e-service; the use of remote interpreting; and the use of remote reporting and electronic recording to make the official record of an action or proceeding. (b) If a board conducts a hearing remotely, it shall ensure compliance with the provisions of this chapter and any rules and procedures adopted by the county board of supervisors pursuant to Section 16 of Article XIII of the California Constitution. (Added by Stats. 2020, Ch. 264, Sec. 24. (AB 107) Effective September 29, 2020.)
  50. 1753.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 4. Organization [1753 - 1753.3] ( Article 4 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    The board must have at least three members, including at least one appointed representative from each participating county, and each participating county’s board of supervisors must appoint one or more representatives to serve as members or alternates.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 4. Organization [1753 - 1753.3] ( Article 4 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1753. The multijurisdictional assessment appeals board shall include a minimum of three members, comprised of at least one appointed representative from each participating county. The board of supervisors of each participating county shall appoint one or more representatives to serve on the multijurisdictional assessment appeals board as either members or alternates. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  51. 1753.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 4. Organization [1753 - 1753.3] ( Article 4 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    Members of the multijurisdictional assessment appeals board serve terms set by the participating counties, must meet specified eligibility and training requirements, and a participating county may remove its appointed representative for cause by resolution adopted by a majority of its board of supervisors.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 4. Organization [1753 - 1753.3] ( Article 4 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1753.1. (a) A member of the multijurisdictional assessment appeals board shall serve for a term determined by the participating counties, subject to subdivision (b). (b) The lengths of the terms of members of the multijurisdictional assessment appeals board shall be structured so that not more than two members’ terms expire concurrently. (c) Members of the multijurisdictional assessment appeals board shall meet all eligibility requirements set forth in Section 1624 and all training requirements set forth in Sections 1624.01 and 1624.02, as those sections read on January 1, 2017. (d) A participating county may remove its appointed representative for cause by enactment of a resolution, adopted by a majority vote of the board of supervisors. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  52. 1753.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 4. Organization [1753 - 1753.3] ( Article 4 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    Members of the board of supervisors may not serve as members or alternates of the multijurisdictional assessment appeals board.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 4. Organization [1753 - 1753.3] ( Article 4 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1753.2. Members of the board of supervisors are ineligible to serve as members or alternates to the multijurisdictional assessment appeals board. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  53. 1753.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 4. Organization [1753 - 1753.3] ( Article 4 added by Stats. 2017, Ch. 132, Sec. 1. )

    Verify source ↗

    A county assessor or assessee challenging the board’s determination must file the legal action in the superior court for the county where the property is located.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 4. Organization [1753 - 1753.3] ( Article 4 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1753.3. Any legal action filed by the county assessor or an assessee challenging the board’s determination shall be filed in the superior court with jurisdiction where the property that is the subject of the appeal is located. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  54. 1754.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 5. Lead Clerk [1754- 1754.] ( Article 5 added by Stats. 2017, Ch. 132, Sec. 1. )

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    The county clerk where an appeal originated must serve as lead clerk for hearing scheduling and coordination unless the participating counties appoint one county clerk to do that job.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 5. Lead Clerk [1754- 1754.] ( Article 5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1754. (a) The county clerk of the county where the appeal originated shall be designated as the lead clerk for the purposes of scheduling a hearing on an appeal before the board and coordinating with the county clerks of each participating county, unless the participating counties appoint a single county clerk to serve as the lead clerk for the multijurisdictional assessment appeals board. (b) If the participating counties appoint a single county clerk to serve as the lead clerk for the multijurisdictional assessment appeals board, the agreement between the participating counties shall provide for the allocation of costs and reimbursements associated with the activities of the board among the participating counties. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  55. 1755.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 6. Admission and Withdrawal [1755 - 1755.1] ( Article 6 added by Stats. 2017, Ch. 132, Sec. 1. )

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    A county may be added as a participating county if the current participating counties approve a resolution and the new county then adopts an ordinance.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 6. Admission and Withdrawal [1755 - 1755.1] ( Article 6 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1755. A county may be added as a participating county by enactment of a resolution by a majority of the current participating counties and subsequent enactment of an ordinance by the new participating county. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  56. 1755.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 6. Admission and Withdrawal [1755 - 1755.1] ( Article 6 added by Stats. 2017, Ch. 132, Sec. 1. )

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    A participating county may withdraw from the multijurisdictional assessment appeals board, but it must do so by ordinance and give two years’ advance notice by resolution.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 6. Admission and Withdrawal [1755 - 1755.1] ( Article 6 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1755.1. (a) A participating county may withdraw from the multijurisdictional assessment appeals board by enactment of an ordinance terminating its membership. (b) A participating county seeking to withdraw from the multijurisdictional assessment appeals board shall, by resolution, provide two years’ advance notice to the participating counties prior to withdrawal to allow for the disposal of all matters scheduled or pending before the board. Any matters filed before the two-year notice period ends that have not been heard and decided on the effective date of the termination shall automatically be referred to and be heard for final determination by the local board of equalization or successor board in the county from which the appeal was filed. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, pursuant to Section 1756.)
  57. 17551.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    This section makes specified federal income tax rules apply or not apply for California tax purposes, and sets rules for deferred compensation, basis increases, and when certain deferred income is included in gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17551. (a) Subchapter E of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to accounting periods and methods of accounting, shall apply, except as otherwise provided. (b) Section 444(c)(1) of the Internal Revenue Code, relating to effect of election, shall not apply. (c) Section 451(b) of the Internal Revenue Code, relating to inclusion not later than for financial accounting purposes, shall not apply to specified credit card fees, as defined in Treasury Regulations Section 1.451-3(j)(2). (d) (1) Notwithstanding the specified date contained in paragraph (1) of subdivision (a) of Section 17024.5, Section 457 of the Internal Revenue Code, relating to deferred compensation plans of state and local governments and tax-exempt organizations, shall apply, except as otherwise provided, without regard to taxable year to the same extent as applicable for federal income tax purposes. (2) The maximum deferred compensation for the taxable year that may be excluded from gross income under Section 457 of the Internal Revenue Code, as applicable for state purposes, shall not exceed the amount of deferred compensation that may be excluded from gross income under Section 457 of the Internal Revenue Code, as in effect on January 1, 2010, including additional elective deferrals under Section 414(v) of the Internal Revenue Code, as in effect on January 1, 2010. (e) (1) For taxable years beginning on or after January 1, 2002, the basis of any person in the plan shall be increased by the amount of compensation not allowed to be excluded under subdivision (a). (2) Any basis described in paragraph (1) shall be recovered in the manner specified in Section 17085. (f) Notwithstanding the limitations provided in subdivision (a), any income attributable to compensation deferred in a plan in taxable years beginning on or after January 1, 2002, in conformance with Section 457 of the Internal Revenue Code, as applicable for federal and state purposes, shall not be includable in the gross income of the individual for whose benefit the plan was established until distributed pursuant to the provisions of the plan or by operation of law. (g) Section 451(k) of the Internal Revenue Code, relating to special rule for sales or dispositions to implement Federal Energy Regulatory Commission or state electric restructuring policy, shall not apply. (h) Section 457A of the Internal Revenue Code, relating to nonqualified deferred compensation from certain tax indifferent parties, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 52. (SB 711) Effective October 1, 2025.)
  58. 17552.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    A taxpayer must also file a return for a period of less than 12 months when the Franchise Tax Board terminates the taxpayer’s taxable year under Section 19082.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17552. (a) Notwithstanding Section 17565, a return for a period of less than 12 months shall also be made when the Franchise Tax Board terminates the taxpayer’s taxable year under Section 19082 (relating to tax in jeopardy). (b) Section 443(c) of the Internal Revenue Code, relating to adjustment in deduction for personal exemption, is modified by substituting the phrase “the credit allowed under Section 17054” for the phrase “the exemptions allowed as a deduction under section 151 (and any deduction in lieu thereof).” (Amended by Stats. 1999, Ch. 987, Sec. 39. Effective October 10, 1999.)
  59. 17553.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    Section 454(c) of the Internal Revenue Code, relating to matured United States Savings Bonds, does not apply under this section.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17553. Section 454(c) of the Internal Revenue Code, relating to matured United States Savings Bonds, shall not apply. (Amended by Stats. 1999, Ch. 987, Sec. 40. Effective October 10, 1999.)
  60. 17555.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    If spouses file separate returns, the Franchise Tax Board may allocate gross income between them when needed to reflect their proper income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17555. In any case where spouses file separate returns, the Franchise Tax Board may distribute, apportion, or allocate gross income between the spouses, if it is determined that such distribution, apportionment, or allocation is necessary in order to reflect the proper income of the spouses. (Amended by Stats. 2016, Ch. 50, Sec. 101. (SB 1005) Effective January 1, 2017.)
  61. 17556.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    An estate may change its annual accounting period one time without Franchise Tax Board approval.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17556. Notwithstanding Section 442 of the Internal Revenue Code, the estate may change its annual accounting period one time without the approval of the Franchise Tax Board. (Added by Stats. 1983, Ch. 1102, Sec. 22. Effective September 27, 1983.)
  62. 17559.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    This section changes a federal tax rule for livestock sales affected by drought, flood, or other weather-related conditions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17559. (a) Section 451(g) of the Internal Revenue Code, relating to special rule for proceeds from livestock sold on account of drought, is modified by substituting the phrase “drought, flood, or other weather-related conditions, and that those conditions” in lieu of the phrase “drought conditions, and that these drought conditions” contained therein. (b) This section shall apply to sales and exchanges after December 31, 1996. (c) This section shall not apply to taxable years beginning on or after January 1, 1998. (Amended by Stats. 2025, Ch. 231, Sec. 53. (SB 711) Effective October 1, 2025.)
  63. 1756.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 7. Repeal Date [1756- 1756.] ( Article 7 added by Stats. 2017, Ch. 132, Sec. 1. )

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    This chapter stays in effect until January 1, 2028, when it is repealed.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1.5. Multijurisdictional Assessment Appeals Boards [1750 - 1756] ( Chapter 1.5 added by Stats. 2017, Ch. 132, Sec. 1. ) ## ARTICLE 7. Repeal Date [1756- 1756.] ( Article 7 added by Stats. 2017, Ch. 132, Sec. 1. ) ## 1756. This chapter shall remain in effect only until January 1, 2028, and as of that date is repealed. (Added by Stats. 2017, Ch. 132, Sec. 1. (SB 447) Effective January 1, 2018. Repealed on January 1, 2028, by its own provisions. Note: Repeal affects Chapter 1.5, commencing with Section 1750.)
  64. 17560.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    This section makes several federal tax provisions apply in California and sets timing rules for certain taxable years and installment-obligation adjustments.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17560. (a) The provisions of Sections 811(c)(4), 811(c)(6), and 811(c)(7) of Public Law 99-514, as modified by Section 1008(f) of Public Law 100-647, shall apply. (b) The provisions of Section 812 of Public Law 99-514, relating to the disallowance of use of installment method for certain obligations as modified by Section 1008(g) of Public Law 100-647, shall apply to taxable years beginning on or after January 1, 1987. (c) The repeal of Section 453C of the Internal Revenue Code by Section 10202(a) of Public Law 100-203, relating to repeal of the proportionate disallowance of the installment method, shall apply to dispositions in taxable years beginning on or after January 1, 1990. (d) (1) In the case of any installment obligation to which Section 453(l)(2)(B) of the Internal Revenue Code applies, in lieu of the provisions of Section 453(l)(3)(A) of the Internal Revenue Code, the tax imposed under Section 17041 or 17048 for any taxable year for which payment is received on that obligation shall be increased by the amount of interest determined in the manner provided under Section 453(l)(3)(B) of the Internal Revenue Code. (2) The provisions of Sections 10202 and 10204 of Public Law 100-203 are modified to provide for each of the following: (A) The provisions of Section 10202 shall apply to dispositions in taxable years beginning on or after January 1, 1990. (B) The provisions of Section 10204 shall apply to costs incurred in taxable years beginning on or after January 1, 1990. (C) Any adjustments required by Section 481 of the Internal Revenue Code shall be included in gross income as follows: (i) Fifty percent in the first taxable year beginning on or after January 1, 1990. (ii) Fifty percent in the second taxable year beginning on or after January 1, 1990. (e) (1) In the case of any installment obligation to which Section 453A of the Internal Revenue Code applies and which is outstanding as of the close of the taxable year, in lieu of the provisions of Section 453A(c)(1) of the Internal Revenue Code, the tax imposed by Section 17041 or 17048 for the taxable year shall be increased by the amount of interest determined in the manner provided under Section 453A(c)(2) of the Internal Revenue Code. (2) The provisions of Section 453A(c)(3)(B) of the Internal Revenue Code, relating to the maximum rate used in calculating the deferred tax liability, are modified to refer to the maximum rate of tax imposed under Section 17041 in lieu of the maximum rate of tax imposed under Section 1 or 11 of the Internal Revenue Code. (Amended by Stats. 2002, Ch. 807, Sec. 8. Effective September 23, 2002.)
  65. 17560.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    This section says several federal tax loss-limitation provisions do not apply, and it overrides or modifies specific referenced federal rules.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17560.5. (a) Section 461(j) of the Internal Revenue Code, relating to limitation on excess farm losses of certain taxpayers, shall not apply. (b) (1) Section 11012(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), relating to limitation on excess business losses on noncorporate taxpayers, shall apply except as otherwise provided. (2) Section 461(l)(1) of the Internal Revenue Code, relating to limitation, as amended by Section 11012(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), is modified by substituting “beginning after December 31, 2018” for the phrase “beginning after December 31, 2017, and before January 1, 2026.” (3) Section 461(l)(2) of the Internal Revenue Code, relating to disallowed loss carryover, as amended by Section 11012(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), is modified by substituting “Any loss which is disallowed under paragraph (1) shall be treated as a carryover excess business loss for the following taxable year.” for “Any loss which is disallowed under paragraph (1) shall be treated as a net operating loss carryover to the following taxable year under section 172.” (4) Section 461(l)(3)(A) of the Internal Revenue Code, as amended by Section 11012 (a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), is modified by inserting “(i) the sum of (I) Any prior year carryover excess business losses, plus” below “In general, the term ‘excess business loss’ means the excess (if any) of.” (5) Section 461(l)(3)(A)(i) of the Internal Revenue Code, as amended by Section 11012 (a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), is modified by inserting “(II)” for “(i).” (6) Section 461(l)(6) of the Internal Revenue Code, relating to coordination with section 469, as amended by Section 11012(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), is modified by substituting “Section 17561” for “section 469.” (c) The amendments to Section 461(l) of the Internal Revenue Code made by Section 2304(a) and (b) of Public Law 116-136, relating to the modification of limitation on losses for taxpayers other than corporations, shall not apply. (d) The amendments to Section 461(l)(1) of the Internal Revenue Code made by Section 9041(a) of Public Law 117-2, relating to the extension of limitation on excess business losses of noncorporate taxpayers, shall not apply. (e) The amendments to Section 461(l)(1) of the Internal Revenue Code made by Section 13903(b)(1) of Public Law 117-169, relating to the extension of limitation on excess business losses of noncorporate taxpayers, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 54. (SB 711) Effective October 1, 2025.)
  66. 17561.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    This section changes how certain Internal Revenue Code passive-activity rules apply for California income tax purposes.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17561. (a) Section 469(c)(7) of the Internal Revenue Code, relating to special rules for taxpayers in real property business, shall not apply. (b) Section 469(d)(2) of the Internal Revenue Code, relating to passive activity credits, is modified to refer to the following credits: (1) The credit for research expenses allowed by Section 17052.12. (2) The credit for certain wages paid (targeted jobs) allowed by Section 17053.7. (3) The credit allowed by former Section 17057 (relating to clinical testing expenses). (4) The credit for low-income housing allowed by Section 17058. (c) Section 469(g)(1)(A) of the Internal Revenue Code is modified to provide that if all gain or loss realized on the disposition of the taxpayer’s entire interest in any passive activity (or former passive activity) is recognized, the excess of— (1) The sum of— (A) Any loss from that activity for that taxable year (determined after application of Section 469(b) of the Internal Revenue Code), plus (B) Any loss realized on that disposition, over (2) Net income or gain for the taxable year from all passive activities (determined without regard to losses described in paragraph (1)), shall be treated as a loss which is not from a passive activity. (d) (1) For purposes of applying the provisions of Section 469(i) of the Internal Revenue Code, relating to the twenty-five thousand dollars ($25,000) offset for rental real estate activities, the dollar limitation specified in Section 469(i)(2) of the Internal Revenue Code, relating to dollar limitation, for the credit allowed under Section 17058, relating to low-income housing, shall not apply. (2) The amendments made to this subdivision by the act adding this paragraph shall apply to each taxable year beginning on or after January 1, 2020. (e) Section 502 of the Tax Reform Act of 1986 (P.L. 99-514) shall apply. (f) For taxable years beginning on or after January 1, 1987, the provisions of Section 10212 of Public Law 100-203, relating to treatment of publicly traded partnerships under Section 469 of the Internal Revenue Code, shall be applicable. (Amended by Stats. 2019, Ch. 159, Sec. 25. (AB 101) Effective July 31, 2019.)
  67. 17563.51.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    This section applies certain federal tax law amendments to California taxable years starting on or after January 1, 2019, and lets a taxpayer elect limited earlier application in some cases.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17563.51. (a) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(a) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 447 of the Internal Revenue Code, relating to method of accounting for corporations engaged in farming, shall apply, except as otherwise provided. (b) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(e)(2) of the Tax Cuts and Jobs Act (Public Law 115-97), relating to preservation of suspense account rules with respect to any existing suspense accounts, shall apply to any suspense account existing as of the effective date of the act adding this subdivision. (c) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(a) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 448 of the Internal Revenue Code, relating to limitation on use of cash method of accounting, shall apply, except as otherwise provided. (d) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(b) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 263A of the Internal Revenue Code, relating to capitalization and inclusion in inventory cost of certain expenses, shall apply, except as otherwise provided. (e) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(c) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 471 of the Internal Revenue Code, relating to the general rule for inventories, shall apply, except as otherwise provided. (f) (1) Any change in method of accounting made pursuant to this section shall be treated for purposes of applying Section 481 of the Internal Revenue Code, as applicable for California purposes under Section 17551, as initiated by the taxpayer and made with the consent of the Franchise Tax Board. (2) Section 13102(e)(1) of the Tax Cuts and Jobs Act (Public Law 115-97) does not apply to subdivisions (a) to (e), inclusive. (3) (A) Notwithstanding paragraph (2) and except as provided in subparagraph (B), a taxpayer may elect to apply the provisions of this section to taxable years beginning on or after January 1, 2018, and before January 1, 2019. (B) Notwithstanding paragraph (2), a taxpayer may elect to apply the provisions of subdivision (b) to suspense accounts established before the effective date of the act adding this subdivision. (Added by Stats. 2019, Ch. 39, Sec. 14. (AB 91) Effective July 1, 2019.)
  68. 17564.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

    Verify source ↗

    Long-term contracts must be accounted for under the Internal Revenue Code rules referenced here, and a taxpayer may elect to apply this subdivision in some later cases.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17564. (a) Long-term contracts shall be accounted for in accordance with the special rules set forth in Section 460 of the Internal Revenue Code. (b) (1) The provisions of Section 804(d) of Public Law 99-514, relating to the effective date of modifications in the method of accounting for long-term contracts, shall be applicable to taxable years beginning on or after January 1, 1987. (2) In the case of a contract entered into after February 28, 1986, during a taxable year beginning before January 1, 1987, an adjustment to income shall be made upon completion of the contract, if necessary, to correct any underreporting or overreporting of income, for purposes of this part, resulting from differences between state and federal law for the taxable year in which the contract began. (c) (1) The amendments to Section 460 of the Internal Revenue Code made by Section 10203 of Public Law 100-203, relating to a reduction in the percentage of items taken into account under the completed contract method, shall apply to taxable years beginning on or after January 1, 1990. (2) In the case of a contract entered into after October 13, 1987, during a taxable year beginning before January 1, 1990, an adjustment to income shall be made upon completion of the contract, if necessary, to correct any underreporting or overreporting of income, for purposes of this part, resulting from differences between California and federal law for taxable years beginning prior to January 1, 1990. (d) (1) The amendments to Section 460 of the Internal Revenue Code made by Section 5041 of Public Law 100-647, relating to a reduction in the percentage of items taken into account under the completed contract method, shall apply to taxable years beginning on or after January 1, 1990. (2) In the case of a contract entered into after June 20, 1988, during a taxable year beginning before January 1, 1990, an adjustment to income shall be made upon completion of the contract, if necessary, to correct any underreporting or overreporting of income, for purposes of this part, resulting from differences between California and federal law for taxable years beginning prior to January 1, 1990. (e) (1) The amendments to Section 460 of the Internal Revenue Code made by Section 7621 of Public Law 101-239, relating to the repeal of the completed contract method of accounting for long-term contracts, shall apply to taxable years beginning on or after January 1, 1990. (2) In the case of a contract entered into after July 10, 1989, during a taxable year beginning before January 1, 1990, an adjustment to income shall be made upon completion of the contract, if necessary, to correct any underreporting or overreporting of income, for purposes of this part, resulting from differences between California and federal law for taxable years beginning prior to January 1, 1990. (f) For purposes of applying paragraphs (2) to (6), inclusive, of Section 460(b) of the Internal Revenue Code, relating to the look-back method, any adjustment to income computed under paragraph (2) of subdivision (b), (c), (d), or (e) shall be deemed to have been reported in the taxable year from which the adjustment arose, rather than the taxable year in which the contract was completed. (g) (1) For contracts entered into on or after the effective date of the act adding this subdivision, the amendments made by Section 13102(d) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 460 of the Internal Revenue Code, relating to special rules for long-term contracts, shall apply, except as otherwise provided. (2) For contracts entered into on or after the effective date of the act adding this subdivision, the amendments made by Section 13102(e)(3) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), relating to exemption from percentage completion for long-term contracts, shall apply, except as otherwise provided. (3) (A) Any change in method of accounting made pursuant to this section shall be treated for purposes of applying Section 481 of the Internal Revenue Code, as applicable for California purposes under Section 17551, as initiated by the taxpayer and made with the consent of the Franchise Tax Board. (B) Section 13102(e)(1) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) does not apply to this subdivision. (C) Notwithstanding subparagraph (B), a taxpayer may elect to apply the provisions of this subdivision, where otherwise allowed, to contracts entered into on or after January 1, 2018, in taxable years ending after January 1, 2018. (h) The amendments to Section 460(c)(6)(B)(ii) of the Internal Revenue Code made by Section 143(a)(2) and Section 143(b)(6)(I) of Public Law 114-113, relating to the special rule for federal long-term contracts, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 55. (SB 711) Effective October 1, 2025.)
  69. 17565.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

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    A taxpayer generally may not use a taxable year different from the one used for federal income tax purposes unless the Franchise Tax Board initiates or approves the change.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17565. (a) The taxable year of a taxpayer may not be different than the taxable year used for purposes of the Internal Revenue Code, unless initiated or approved by the Franchise Tax Board. (b) For purposes of this section, whenever a taxpayer is required to make a federal return for a period of less than 12 months, that period shall be deemed to be a taxable year, and Section 17552 shall apply. (Added by Stats. 1989, Ch. 1352, Sec. 53.5. Effective October 2, 1989. Applicable to taxable years beginning on or after January 1, 1989, by Sec. 172 of Ch. 1352.)
  70. 17567.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

    Verify source ↗

    The cited federal amendments relating to repeal of the small life insurance company deduction do not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17567. The amendments to Section 453B(e) of the Internal Revenue Code as enacted by Section 13512(b)(1) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), relating to the repeal of the small life insurance company deduction, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 56. (SB 711) Effective October 1, 2025.)
  71. 17570.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. )

    Verify source ↗

    This section sets state tax accounting rules for certain taxpayers using mark-to-market elections and spreads some adjustment amounts over specified tax-year periods.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 6. Accounting Periods and Methods of Accounting [17551 - 17570] ( Chapter 6 repealed and added by Stats. 1983, Ch. 488, Sec. 38. ) ## 17570. (a) Section 13233(c)(2)(C) of the Revenue Reconciliation Act of 1993 (Public Law 103-66), relating to the effective date for changes in the mark to market accounting method for securities dealers, is modified to provide that the amount taken into account under Section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over the five-taxable-year period beginning with the first taxable year beginning on or after January 1, 1997. (b) In the case of any taxpayer required by the enactment of the act adding this subdivision, which act incorporated by reference the amendments made by Section 7003 of the Internal Revenue Service Restructuring and Reform Act of 1998 (Public Law 105-206) to Section 475 of the Internal Revenue Code, for taxable years beginning on or after January 1, 2002, to change its method of accounting on its first taxable year beginning on or after January 1, 2002, then each of the following shall apply for purposes of this part, Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001): (1) The change shall be treated as initiated by the taxpayer. (2) The change shall be treated as made with the consent of the Franchise Tax Board. (3) The taxpayer shall not be required to make a change in the method of accounting until the first taxable year beginning on or after January 1, 2002. (4) The net amount of the adjustments required to be taken into account by the taxpayer under Chapter 6 (commencing with Section 17551) shall be taken into account ratably over the three taxable year period beginning with that taxpayer’s first taxable year beginning on or after January 1, 2002. (c) (1) If a taxpayer has, at any time, made an election for federal purposes under Section 475(e) of the Internal Revenue Code, relating to election of mark to market for dealers in commodities, to have Section 475 of the Internal Revenue Code apply, Section 475 of the Internal Revenue Code shall apply to that dealer in commodities for state purposes, a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5, and the federal election shall be binding for purposes of this part. (2) If a taxpayer fails to make, or has not previously made, an election for federal purposes under Section 475(e) of the Internal Revenue Code, relating to election of mark to market for dealers in commodities, to have Section 475 of the Internal Revenue Code apply, an election under Section 475(e) of the Internal Revenue Code shall not be allowed for state purposes, Section 475 of the Internal Revenue Code shall not apply to that dealer in commodities for state purposes, and a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5. (d) (1) If a taxpayer has, at any time, made an election for federal purposes under Section 475(f)(1) of the Internal Revenue Code, relating to election of mark to market for traders in securities, to have Section 475 of the Internal Revenue Code apply to a trade or business, Section 475 of the Internal Revenue Code shall apply to that trader in securities for state purposes with respect to that trade or business, a separate election for state purposes with respect to that trade or business shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5, and the federal election shall be binding for purposes of this part. (2) If a taxpayer fails to make, or has not previously made, an election for federal purposes under Section 475(f)(1) of the Internal Revenue Code, relating to election of mark to market for traders in securities, to have Section 475 of the Internal Revenue Code apply to a trade or business, an election under Section 475(f)(1) of the Internal Revenue Code shall not be allowed for state purposes with respect to that trade or business, Section 475 of the Internal Revenue Code shall not apply to that trader in securities for state purposes with respect to that trade or business, and a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5. (e) (1) If a taxpayer has, at any time, made an election for federal purposes under Section 475(f)(2) of the Internal Revenue Code, relating to election of mark to market for traders in commodities, to have Section 475 of the Internal Revenue Code apply to a trade or business, Section 475 of the Internal Revenue Code shall apply to that trader in commodities for state purposes with respect to that trade or business, a separate election for state purposes with respect to that trade or business shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5, and the federal election with respect to that trade or business shall be binding for purposes of this part. (2) If a taxpayer fails to make, or has not previously made, an election for federal purposes under Section 475(f)(2) of the Internal Revenue Code, relating to election of mark to market for traders in commodities, to have Section 475 of the Internal Revenue Code apply to a trade or business, an election under Section 475(f)(2) of the Internal Revenue Code shall not be allowed for state purposes with respect to that trade or business, Section 475 of the Internal Revenue Code shall not apply to that trader in commodities for state purposes with respect to that trade or business, and a separate election for state purposes with respect to that trade or business shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5. (f) (1) An election under Section 475(e) or (f) of the Internal Revenue Code made for federal purposes with respect to a taxable year beginning before January 1, 1998, shall be treated as having been made for state purposes with respect to the first taxable year beginning on or after January 1, 1998. (2) Section 1001(d)(4)(B) of the Taxpayer Relief Act of 1997 (Public Law 105-34), relating to the effective date for election of mark to market by securities traders and traders and dealers in commodities, is modified to provide that the requirement for timely identification shall be treated as timely made for state purposes if that identification is treated as timely made for federal purposes, and the amount taken into account under Section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over the four-taxable-year period beginning with the first taxable year beginning on or after January 1, 1998. (Amended by Stats. 2002, Ch. 35, Sec. 25. Effective May 8, 2002.)
  72. 17631.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. )

    Verify source ↗

    Certain organizations described in Section 401(a) of the Internal Revenue Code are exempt from taxation under this part, unless the exemption is denied under Sections 17635 to 17639.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. ) ## 17631. An organization described in Section 401(a) of the Internal Revenue Code shall be exempt from taxation under this part unless such exemption is denied under Sections 17635 to 17639, inclusive. (Amended by Stats. 1983, Ch. 488, Sec. 39. Effective July 28, 1983.)
  73. 17632.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. )

    Verify source ↗

    An organization exempt under Section 17631 is taxed only as Article 2 provides for unrelated income, but it is still treated as income-tax-exempt for laws that refer to exempt organizations.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. ) ## 17632. An organization exempt from taxation under Section 17631 shall be subject to tax to the extent provided in Article 2 (commencing at Section 17651) of this chapter (relating to tax on unrelated income), but, notwithstanding Article 2, shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes. (Amended by Stats. 1961, Ch. 847.)
  74. 17635.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. )

    Verify source ↗

    An organization described in Section 401(a) loses exemption under Section 17631 if it engaged in a prohibited transaction after December 31, 1960.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. ) ## 17635. (a) An organization described in Section 401(a) of the Internal Revenue Code which is subject to the provisions of this section shall not be exempt from taxation under Section 17631 if it has engaged in a prohibited transaction after December 31, 1960. (b) An organization described in Section 401(a) of the Internal Revenue Code shall be denied exemption from taxation under Section 17631 by reason of subdivision (a) only for taxable years after the taxable year during which it is notified by the Franchise Tax Board that it has engaged in a prohibited transaction, unless the organization entered into the prohibited transaction with the purpose of diverting corpus or income of the organization from its exempt purposes, and the transaction involved a substantial part of the corpus or income of the organization. (Amended by Stats. 1985, Ch. 106, Sec. 131.)
  75. 17636.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. )

    Verify source ↗

    Sections 17635 to 17639 apply to organizations described in Section 401(a) of the Internal Revenue Code.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. ) ## 17636. Sections 17635 to 17639, inclusive, apply to any organization described in Section 401(a) of the Internal Revenue Code. (Amended by Stats. 1983, Ch. 488, Sec. 41. Effective July 28, 1983.)
  76. 17637.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. )

    Verify source ↗

    This section defines “prohibited transaction” for certain organizations covered by Sections 17635 to 17639.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. ) ## 17637. For purposes of Sections 17635 to 17639, inclusive, the term “prohibited transaction” means any transaction in which an organization subject to the provisions of Sections 17635 to 17639, inclusive— (a) Lends any part of its income or corpus, without the receipt of adequate security and a reasonable rate of interest, to; (b) Pays any compensation, in excess of a reasonable allowance for salaries or other compensation for personal services actually rendered, to; (c) Makes any part of its services available on a preferential basis to; (d) Makes any substantial purchase of securities or any other property, for more than adequate consideration in money or money’s worth, from; (e) Sells any substantial part of its securities or other property, for less than an adequate consideration in money or money’s worth to; or (f) Engages in any other transaction which results in a substantial diversion of its income or corpus to; the creator of such organization (if a trust); a person who has made a substantial contribution to such organization; a member of the family (as defined in Section 267(c)(4) of the Internal Revenue Code) of an individual who is the creator of such trust or who has made a substantial contribution to such organization; or a corporation controlled by such creator or person through the ownership, directly or indirectly, of 50 percent or more of the total combined voting power of all classes of stock entitled to vote or 50 percent or more of the total value of shares of all classes of stock of the corporation. (Amended by Stats. 1983, Ch. 488, Sec. 42. Effective July 28, 1983.)
  77. 17638.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. )

    Verify source ↗

    Certain organizations or trusts may file a claim for exemption with the Franchise Tax Board, and if the Board is satisfied they will not knowingly repeat a prohibited transaction, they become exempt for later taxable years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. ) ## 17638. Any organization described in Section 401(a) of the Internal Revenue Code or a trust which is denied exemption under Section 17631 by reason of Section 17635, with respect to any taxable year following the taxable year in which notice of denial of exemption was received, may, under regulations prescribed by the Franchise Tax Board, file claim for exemption, and if the Franchise Tax Board, pursuant to such regulations, is satisfied that such organization will not knowingly again engage in a prohibited transaction, such organization shall be exempt with respect to taxable years after the year in which such claim is filed. (Amended by Stats. 1983, Ch. 488, Sec. 43. Effective July 28, 1983.)
  78. 17639.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. )

    Verify source ↗

    A qualifying trust can avoid having certain debt instruments treated as loans without adequate security if the purchase and concentration conditions are met.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. ) ## 17639. For purposes of subdivision (a) of Section 17637, a bond, debenture, note, or certificate or other evidence of indebtedness (hereinafter in this section referred to as “obligation”) acquired by a trust described in Section 401(a) of the Internal Revenue Code shall not be treated as a loan made without the receipt of adequate security if— (a) The obligation is acquired— (1) On the market, either (i) at the price of the obligation prevailing on a national securities exchange which is registered with the Securities and Exchange Commission, or (ii) if the obligation is not traded on such a national securities exchange, at a price not less favorable to the trust than the offering price for the obligation as established by current bid and asked prices quoted by persons independent of the issuer; (2) From an underwriter, at a price (i) not in excess of the public offering price for the obligation as set forth in a prospectus or offering circular filed with the Securities and Exchange Commission, and (ii) at which a substantial portion of the same issue is acquired by persons independent of the issuer; or (3) Directly from the issuer, at a price not less favorable to the trust than the price paid currently for a substantial portion of the same issue by persons independent of the issuer; (b) Immediately following acquisition of the obligation— (1) Not more than 25 percent of the aggregate amount of obligations issued in the issue and outstanding at the time of acquisition is held by the trust, and (2) At least 50 percent of the aggregate amount referred to in paragraph (1) is held by persons independent of the issuer; and (c) Immediately following acquisition of the obligation, not more than 25 percent of the assets of the trust is invested in obligations of persons described in Section 17637. (Amended by Stats. 1999, Ch. 987, Sec. 42. Effective October 10, 1999.)
  79. 17640.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. )

    Verify source ↗

    Section 17640 carves out a limited exception for certain trust loans to an employer if the loan has a reasonable interest rate and the listed conditions are met.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. General Rule [17631 - 17640] ( Heading of Article 1 amended by Stats. 1963, Ch. 2025. ) ## 17640. Subdivision (a) of Section 17637 shall not apply to a loan made by a trust described in Section 401(a) of the Internal Revenue Code to the employer (or to a renewal of such a loan or, if the loan is repayable upon demand, to a continuation of such a loan) if the loan bears a reasonable rate of interest, and if (in the case of a making or renewal)— (a) The employer is prohibited (at the time of the making or renewal) by any law of the United States or regulation thereunder from directly or indirectly pledging, as security for such a loan, a particular class or classes of his assets the value of which (at that time) represents more than one-half of the value of all his or her assets; (b) The making or renewal, as the case may be, is approved in writing as an investment that is consistent with the exempt purposes of the trust by a trustee who is independent of the employer, and no other similar trustee had previously refused to give that written approval; and (c) Immediately following the making or renewal, as the case may be, the aggregate amount loaned by the trust to the employer, without the receipt of adequate security, does not exceed 25 percent of the value of all the assets of the trust. (d) For purposes of subdivision (b), the term “trustee” means, with respect to any trust for which there is more than one trustee who is independent of the employer, a majority of those independent trustees. For purposes of subdivision (c), the determination as to whether any amount loaned by the trust to the employer is loaned without the receipt of adequate security shall be made without regard to Section 17639. (Amended by Stats. 1999, Ch. 987, Sec. 43. Effective October 10, 1999.)
  80. 17651.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Taxation of Business Income of Certain Exempt Organizations [17651- 17651.] ( Heading of Article 2 amended by Stats. 1961, Ch. 847. )

    Verify source ↗

    Certain trusts must pay tax each taxable year on unrelated business taxable income, with the amount computed under Section 17041.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Taxation of Business Income of Certain Exempt Organizations [17651- 17651.] ( Heading of Article 2 amended by Stats. 1961, Ch. 847. ) ## 17651. (a) There is hereby imposed for each taxable year on the unrelated business taxable income (as defined in Section 23732) of every trust a tax computed as provided in subdivision (e) of Section 17041. In making that computation for purposes of this section, the term “taxable income” as used in subdivisions (a) and (e) of Section 17041 shall be read as “unrelated business taxable income” as defined in Section 23732. (b) The tax imposed by subdivision (a) shall apply in the case of any trust which is exempt, except as provided in this article, from taxation under this part by reason of Section 17631 and which, if it were not for such exemption, would be subject to Chapter 9 (commencing with Section 17731) relating to estates, trusts, beneficiaries, and decedents. (Amended by Stats. 1999, Ch. 987, Sec. 44. Effective October 10, 1999.)
  81. 17671.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Common Trust Funds [17671 - 17677] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 48. )

    Verify source ↗

    Section 584 of the Internal Revenue Code applies here to common trust funds, unless another provision says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Common Trust Funds [17671 - 17677] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 48. ) ## 17671. Section 584 of the Internal Revenue Code, relating to common trust funds, shall apply, except as otherwise provided. (Amended by Stats. 1999, Ch. 987, Sec. 45. Effective October 10, 1999.)
  82. 17677.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Common Trust Funds [17671 - 17677] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 48. )

    Verify source ↗

    A trust company running a common trust fund must file a return each taxable year under penalties of perjury.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 7. Exempt Trusts and Common Trust Funds [17631 - 17677] ( Chapter 7 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Common Trust Funds [17671 - 17677] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 48. ) ## 17677. Every trust company operating a common trust fund shall make a return under penalties of perjury for each taxable year, stating specifically with respect to such fund the items of gross income and the deductions allowed by this article and shall include in the return information sufficient to identify the trusts and estates entitled to share in the taxable income of the common trust fund and the amount of the proportionate share of each such participant. (Repealed and added by Stats. 1983, Ch. 488, Sec. 48. Effective July 28, 1983.)
  83. 17681.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 8. Natural Resources [17681- 17681.] ( Chapter 8 repealed and added by Stats. 1987, Ch. 1138, Sec. 112. )

    Verify source ↗

    This section makes a federal natural-resources tax subchapter apply, but excludes several Internal Revenue Code provisions for certain natural resources starting with taxable years on or after January 1, 2024.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 8. Natural Resources [17681- 17681.] ( Chapter 8 repealed and added by Stats. 1987, Ch. 1138, Sec. 112. ) ## 17681. (a) Subchapter I of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to natural resources, shall apply, except as otherwise provided. (b) For taxable years beginning on or after January 1, 2024, Section 613(b)(2)(B) of the Internal Revenue Code, in the case of oil shale, shall not apply. (c) For taxable years beginning on or after January 1, 2024, Section 613(b)(4) of the Internal Revenue Code, relating to 10 percent, in the case of coal, shall not apply. (d) For taxable years beginning on or after January 1, 2024, Section 613A of the Internal Revenue Code, relating to limitations on percentage depletion in the case of oil and gas wells, shall not apply. (Amended by Stats. 2024, Ch. 34, Sec. 24. (SB 167) Effective June 27, 2024.)
  84. 177.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 3. Limitation of Actions [175 - 177] ( Chapter 3 added by Stats. 1945, Ch. 1017. )

    Verify source ↗

    Challenges to certain tax-sale deeds, and defenses based on them, must be brought or maintained within a one-year filing window, subject to the stated timing rules and exception.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 3. Limitation of Actions [175 - 177] ( Chapter 3 added by Stats. 1945, Ch. 1017. ) ## 177. (a) A proceeding based on an alleged invalidity or irregularity of any deed heretofore or hereafter issued upon the sale of property by any taxing agency, including taxing agencies which have their own system for the levying and collection of taxes, in the enforcement of delinquent property taxes or assessments, or a proceeding based on an alleged invalidity or irregularity of any proceedings leading up to such deed, can only be commenced within one year after the date of recording of such deed in the county recorder’s office or within one year after June 1, 1954, whichever is later. (b) A defense based on an alleged invalidity or irregularity of any deed heretofore or hereafter issued upon the sale of property by any taxing agency, including taxing agencies which have their own system for the levying and collection of taxes, in the enforcement of delinquent property taxes or assessments, or a defense based on an alleged invalidity or irregularity of any proceedings leading up to such deed, can only be maintained in a proceeding commenced within one year after the date of recording of such deed in the county recorder’s office or within one year after June 1, 1954, whichever is later. (c) Sections 351 to 358, inclusive, of the Code of Civil Procedure do not apply to the time within which a proceeding may be brought under the provisions of this section. (d) Nothing in this section shall operate to extend the time within which any proceeding based on the alleged invalidity or irregularity of any tax deed may be brought under any other section of this code. (e) This section shall not apply to any deed issued by a taxing agency within five years from the time the property was sold to said taxing agency. (Added by Stats. 1953, Ch. 1655.)
  85. 17731.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    This section says Subchapter J of the Internal Revenue Code applies, except as otherwise provided, and that IRC Section 692(d)(2) does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17731. (a) Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to estates, trusts, beneficiaries, and decedents, shall apply, except as otherwise provided. (b) Section 692(d)(2) of the Internal Revenue Code, relating to the ten thousand-dollar ($10,000) minimum benefit, does not apply. (Amended by Stats. 2005, Ch. 691, Sec. 37. Effective October 7, 2005.)
  86. 17731.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    This section changes how certain tax and credit provisions are read: one tax amount is calculated using the highest individual tax rate, and one credit is set to zero.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17731.5. (a) Section 641(c)(2)(A) of the Internal Revenue Code is modified to read: “The amount of the tax imposed by subdivision (e) of Section 17041 shall be determined by using the highest rate of tax applicable to an individual under subdivision (a) of Section 17041.” (b) Section 641(c)(2)(B) of the Internal Revenue Code is modified to read: “The credit allowed under subdivision (b) of Section 17733 shall be zero.” (Amended by Stats. 2002, Ch. 35, Sec. 26. Effective May 8, 2002. Applicable as prescribed by Sec. 63 of Ch. 35.)
  87. 17732.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    Section 642(b) of the Internal Revenue Code, relating to the deduction for personal exemption, does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17732. Section 642(b) of the Internal Revenue Code, relating to deduction for personal exemption, shall not apply. (Amended by Stats. 1999, Ch. 987, Sec. 46. Effective October 10, 1999.)
  88. 17733.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    Estates and certain trusts can claim income tax credits under this section, with a special rule for disability trusts.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17733. (a) An estate shall be allowed a credit of ten dollars ($10) against the tax imposed under Section 17041, less any amounts imposed under paragraph (1) of subdivision (d) or paragraph (1) of subdivision (e), or both, of Section 17560. (b) (1) Except as provided in paragraph (2), a trust shall be allowed a credit of one dollar ($1) against the tax imposed under Section 17041, less any amounts imposed under paragraph (1) of subdivision (d) or paragraph (1) of subdivision (e), or both, of Section 17560. (2) (A) A disability trust, as defined in Section 642(b)(2)(C) of the Internal Revenue Code, shall be allowed a credit in an amount equal to the personal exemption credit authorized for a single individual pursuant to subdivision (a) of Section 17054. (B) The credit authorized by subparagraph (A) shall be subject to the credit reduction provisions of Section 17054.1. For purposes of making the adjustments required by Section 17054.1, the adjusted gross income of the disability trust shall be computed in accordance with Section 67(e) of the Internal Revenue Code, relating to determination of adjusted gross income in case of estates and trusts. (C) This paragraph applies to taxable years beginning on or after January 1, 2004. (c) The credits allowed by this section shall be in lieu of the credits allowed under Section 17054 (relating to credit for personal exemption). (Amended by Stats. 2005, Ch. 691, Sec. 37.5. Effective October 7, 2005.)
  89. 17734.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    For a nonresident beneficiary, income and deductions received through an estate or trust are counted in the taxable-income computation only to the extent they come from sources within this state.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17734. For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, in the case of a nonresident beneficiary, income and deduction derived through an estate or trust shall be included in that computation only to the extent that the income or deduction is derived by the estate or trust from sources within this state. (Amended by Stats. 2001, Ch. 920, Sec. 16. Effective January 1, 2002.)
  90. 17734.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    Section 646 of the Internal Revenue Code does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17734.6. Section 646 of the Internal Revenue Code, relating to tax treatment of electing Alaska Native Settlement Trusts, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 37.6. Effective October 7, 2005.)
  91. 17736.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    This section changes how Section 642(c)(2) of the Internal Revenue Code is read for this part, and says a trust’s Section 642(c) deduction is subject to Section 681.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17736. (a) Section 642(c)(2) of the Internal Revenue Code is modified for purposes of this part by substituting “December 31, 1970” for “October 9, 1969” throughout that paragraph. (b) In the case of a trust, the deduction allowed by Section 642(c) of the Internal Revenue Code is subject to Section 681 of the Internal Revenue Code, relating to limitation on charitable deduction. (Amended by Stats. 2018, Ch. 92, Sec. 195. (SB 1289) Effective January 1, 2019.)
  92. 17737.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    For estate and trust income calculations, a qualifying spouse is treated as the beneficiary under this chapter. The rule does not apply to certain divorce or separation instruments after December 31, 2025, and the section is repealed on December 1, 2027.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17737. (a) For purposes of computing the taxable income of the estate or trust and the taxable income of a spouse to whom Section 682(a) of the Internal Revenue Code, relating to income of an estate or trust in the case of divorce, etc., as it read on January 1, 2015, applies, that spouse shall be considered as the beneficiary for purposes of this chapter. (b) Subdivision (a) shall not apply for any divorce or separation instrument executed after December 31, 2025, or for any divorce or separation instrument executed on or before December 31, 2025, and modified after that date, if the modification expressly provides that the amendments made by this subdivision apply to such modification. (c) This section shall remain in effect only until December 1, 2027, and as of that date is repealed. (Amended by Stats. 2025, Ch. 231, Sec. 57. (SB 711) Effective October 1, 2025. Applicable to taxable years beginning on or after January 1, 1987, by Sec. 189 of Stats. 1987, Ch. 1138. Repealed as of December 1, 2027, by its own provisions.)
  93. 17742.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    An estate or trust’s income is taxable to the estate or trust, subject to chapter exceptions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17742. (a) Except as otherwise provided in this chapter, the income of an estate or trust is taxable to the estate or trust. The tax applies to the entire taxable income of an estate, if the decedent was a resident, regardless of the residence of the fiduciary or beneficiary, and to the entire taxable income of a trust, if the fiduciary or beneficiary (other than a beneficiary whose interest in such trust is contingent) is a resident, regardless of the residence of the settlor. (b) For purposes of this article the residence of a corporate fiduciary of a trust means the place where the corporation transacts the major portion of its administration of the trust. (Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
  94. 17743.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    If trust income taxability depends on the fiduciary’s residence and there are two or more fiduciaries, the Section 17742 income is apportioned by the number of fiduciaries resident in the state.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17743. Where the taxability of income under this chapter depends on the residence of the fiduciary and there are two or more fiduciaries for the trust, the income taxable under Section 17742 shall be apportioned according to the number of fiduciaries resident in this state pursuant to rules and regulations prescribed by the Franchise Tax Board. (Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
  95. 17744.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    If trust income taxability depends on a beneficiary’s residence and the trust has two or more beneficiaries, the income taxable under Section 17742 must be apportioned by the number and interest of California-resident beneficiaries, under Franchise Tax Board rules.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17744. Where the taxability of income under this chapter depends on the residence of the beneficiary and there are two or more beneficiaries of the trust, the income taxable under Section 17742 shall be apportioned according to the number and interest of beneficiaries resident in this state pursuant to rules and regulations prescribed by the Franchise Tax Board. (Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
  96. 17745.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    Trust income can be taxed to the beneficiary when it is distributed or distributable, with a special limit for nonresident beneficiaries.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17745. (a) If, for any reason, the taxes imposed on income of a trust which is taxable to the trust because the fiduciary or beneficiary is a resident of this state are not paid when due and remain unpaid when that income is distributable to the beneficiary, or in case the income is distributable to the beneficiary before the taxes are due, if the taxes are not paid when due, such income shall be taxable to the beneficiary when distributable to him except that in the case of a nonresident beneficiary such income shall be taxable only to the extent it is derived from sources within this state. (b) If no taxes have been paid on the current or accumulated income of the trust because the resident beneficiary’s interest in the trust was contingent such income shall be taxable to the beneficiary when distributed or distributable to him or her. (c) The tax on that income which is taxable to the beneficiary under subdivisions (a) or (b) is a tax on the receipt of that income distributed or on the constructive receipt of that distributable income. For purposes of this section income accumulated by a trust continues to be income even though the trust provides that the income (ordinary or capital) shall become a part of the corpus. (d) The tax attributable to the inclusion of that income in the gross income of that beneficiary for the year that income is distributed or distributable under subdivision (b) shall be the aggregate of the taxes which would have been attributable to that income had it been included in the gross income of that beneficiary ratably for the year of distribution and the five preceding taxable years, or for the period that the trust accumulated or acquired income for that contingent beneficiary, whichever period is the shorter. (e) In the event that a person is a resident beneficiary during the period of accumulation, and leaves this state within 12 months prior to the date of distribution of accumulated income and returns to the state within 12 months after distribution, it shall be presumed that the beneficiary continued to be a resident of this state throughout the time of distribution. (f) The Franchise Tax Board shall prescribe such regulations as it deems necessary for the application of this section. (Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
  97. 17745.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    The 1963 amendments to Sections 17742 and 17745 apply only to taxable years beginning after December 31, 1962.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17745.1. The amendments of Sections 17742 and 17745 made at the 1963 Regular Session of the Legislature shall be applicable only with respect to taxable years beginning after December 31, 1962. Whether or not the income of a trust which is or was accumulated or is or was accumulated and distributed or accumulated and distributable is taxable by California for the years prior to 1963 shall be determined as if Sections 17742 and 17745 had not been amended at the 1963 Regular Session of the Legislature and without inferences drawn from the fact that such amendments were not made applicable with respect to taxable years beginning before January 1, 1963. (Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
  98. 17751.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    For certain revocable trusts, the federal Section 645 election is treated as the state election made by the executor and trustee, and separate state elections are not allowed.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17751. Section 645 of the Internal Revenue Code, relating to certain revocable trusts treated as part of estate, is modified as follows: (a) An election under Section 645(a) of the Internal Revenue Code for federal purposes shall be treated for purposes of this part as an election made by the executor, if any, of the estate and the trustee of the qualified revocable trust under Section 645(a) of the Internal Revenue Code for state purposes and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed. (b) If the executor, if any, of the estate and the trustee of a qualified revocable trust fail to make an election under Section 645(a) of the Internal Revenue Code for federal purposes with respect to that qualified revocable trust, that trust shall be treated and taxed for purposes of this part as a separate trust, an election under Section 645(a) of the Internal Revenue Code for state purposes with respect to that trust shall not be allowed, and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed with respect to that trust. (Amended by Stats. 2002, Ch. 35, Sec. 27. Effective May 8, 2002. Applicable as prescribed by Sec. 64 of Ch. 35.)
  99. 17752.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    This section changes how certain federal tax elections are treated for state tax purposes for estates and trusts.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17752. Section 663 of the Internal Revenue Code, relating to special rules applicable to Sections 661 and 662, is modified as follows: (a) Section 663(b) of the Internal Revenue Code, relating to distributions in the first 65 days of the taxable year, is modified as follows: (1) An election under Section 663(b) of the Internal Revenue Code for federal purposes shall be treated for purposes of this part as an election made by the executor of the estate or the fiduciary of the trust, as the case may be, under Section 663(b) of the Internal Revenue Code for state purposes and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed. (2) If the executor of the estate or the fiduciary of the trust, as the case may be, fails to make an election under Section 663(b) of the Internal Revenue Code for federal purposes with respect to an amount properly paid or credited within 65 days of the taxable year, that amount shall not be considered for purposes of this part as having been paid or credited on the last day of the preceding taxable year, an election under Section 663(b) of the Internal Revenue Code for state purposes with respect to that amount shall not be allowed, and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed with respect to that amount. (b) Section 663(c) of the Internal Revenue Code, relating to separate shares treated as separate estates or trusts, is modified as follows: (1) An election under Section 663(c) of the Internal Revenue Code for federal purposes shall be treated for purposes of this part as an election made by the executor of the estate or the fiduciary of the trust, as the case may be, under Section 663(c) of the Internal Revenue Code for state purposes and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed. (2) If the executor of the estate or the fiduciary of the trust, as the case may be, fails to make an election under Section 663(c) of the Internal Revenue Code for federal purposes with respect to separate shares treated as separate estates or trusts, an election under Section 663(c) of the Internal Revenue Code for state purposes shall not be allowed, and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed. (Added by Stats. 1998, Ch. 322, Sec. 34. Effective August 20, 1998.)
  100. 17755.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2014, this section says the federal excise-tax rule in IRC Section 664(c)(2) does not apply, and unrelated business taxable income of charitable remainder annuity trusts and charitable remainder unitrusts is taxed under Section 17651.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17755. For taxable years beginning on or after January 1, 2014, Section 664(c)(2) of the Internal Revenue Code, relating to excise tax, shall not apply and, in lieu thereof, the unrelated business taxable income, as defined in Section 23732, of every charitable remainder annuity trust or charitable remainder unitrust shall be subject to tax under Section 17651. (Repealed and added by Stats. 2014, Ch. 478, Sec. 4. (AB 2754) Effective January 1, 2015.)
  101. 17760.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    Internal Revenue Code section 684 does not apply to certain transfers to certain foreign trusts and estates.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17760. Section 684 of the Internal Revenue Code, relating to recognition of gain on certain transfers to certain foreign trusts and estates, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 38. Effective October 7, 2005.)
  102. 17760.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    This section changes how qualified funeral trusts are taxed and reported, and gives the Franchise Tax Board power to issue simplified reporting rules.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17760.5. Section 685 of the Internal Revenue Code, relating to treatment of funeral trusts, is modified as follows: (a) Section 685(a) of the Internal Revenue Code is modified to read: In the case of a qualified funeral trust— (1) Subparts B, C, D, and E of Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code shall not apply. (2) No credit for personal exemption shall be allowed under Section 17054 or Section 17733. (b) Section 685(b) of the Internal Revenue Code is modified as follows: (1) An election under Section 685(b)(5) of the Internal Revenue Code for federal purposes shall be treated for purposes of this part as an election made by the trustee of the qualified funeral trust under Section 685(b)(5) of the Internal Revenue Code for state purposes and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed. (2) If the trustee of a qualified funeral trust fails to make an election under Section 685(b)(5) of the Internal Revenue Code for federal purposes with respect to a qualified funeral trust, that trust shall be treated for purposes of this part as owned under Subpart E of the Internal Revenue Code by the purchasers of the contracts described in Section 685(b)(1) of the Internal Revenue Code, an election under Section 685(b)(5) of the Internal Revenue Code for state purposes with respect to that trust shall not be allowed, and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed with respect to that trust. (c) Section 685(d) of the Internal Revenue Code is modified to read: Subdivision (e) of Section 17041 shall be applied to each qualified funeral trust by treating each beneficiary’s interest in each qualified funeral trust as a separate trust. (d) The Franchise Tax Board may, by forms and instructions, provide rules for simplified reporting of all trusts having a single trustee consistent with the rules prescribed by the Secretary of the Treasury under Section 685 of the Internal Revenue Code. (e) This section shall apply to taxable years ending after August 5, 1997. (f) The amendments made to this section by the act adding this subdivision shall apply to taxable years beginning on or after January 1, 1998. (Amended (as added by Stats. 1998, Ch. 7) by Stats. 1998, Ch. 322, Sec. 35. Effective August 20, 1998.)
  103. 17779.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. )

    Verify source ↗

    This section says certain Internal Revenue Code sections do not apply to distributions described in Section 17745(b).

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 9. Estates, Trusts, Beneficiaries, and Decedents [17731 - 17779] ( Chapter 9 repealed and added by Stats. 1983, Ch. 488, Sec. 59. ) ## 17779. Sections 665 to 668, inclusive, of the Internal Revenue Code shall not apply to distributions described in subdivision (b) of Section 17745. (Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
  104. 17851.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

    Verify source ↗

    Subchapter K of the Internal Revenue Code applies to partners and partnerships, unless another rule provides otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17851. Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to partners and partnerships, shall apply, except as otherwise provided. (Amended by Stats. 1999, Ch. 987, Sec. 47. Effective October 10, 1999.)
  105. 17851.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

    Verify source ↗

    A partnership, as an entity, is subject to the specified partnership-related tax chapters.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17851.5. Notwithstanding the provisions of Section 701 of the Internal Revenue Code, relating to partners, not partnerships, subject to tax, a partnership, as an entity shall be subject to Chapter 10.5 (commencing with Section 17935), relating to tax on limited partnerships, Chapter 10.6 (commencing with Section 17941), relating to tax on limited liability companies, and Chapter 10.7 (commencing with Section 17948), relating to tax on limited liability partnerships. (Amended by Stats. 2017, Ch. 561, Sec. 234. (AB 1516) Effective January 1, 2018.)
  106. 17853.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

    Verify source ↗

    A partnership may not claim the specified federal tax deduction for taxes paid to another state.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17853. Section 703(a)(2) of the Internal Revenue Code is modified to additionally provide that the deduction for taxes provided in Section 164(a) of the Internal Revenue Code with respect to taxes, described in Section 18006, paid to another state shall not be allowed to the partnership. (Amended by Stats. 1999, Ch. 987, Sec. 49. Effective October 10, 1999.)
  107. 17854.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

    Verify source ↗

    For a nonresident partner, guaranteed payments must be included when computing taxable income under the cited rule.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17854. For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, in the case of a nonresident partner, guaranteed payments, as defined by Section 707(c) of the Internal Revenue Code, shall be included in that computation as gross income from sources within this state in the same manner as if those payments were a distributive share of that partnership. (Amended by Stats. 2001, Ch. 920, Sec. 18. Effective January 1, 2002.)
  108. 17855.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

    Verify source ↗

    For this provision, “unrealized receivables” does not include certain foreign corporate stock or oil, gas, or geothermal property.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17855. The term “unrealized receivables,” as defined by Section 751(c) of the Internal Revenue Code, shall not include any of the following: (a) Stock in certain foreign corporations, as described in Section 1248 of the Internal Revenue Code. (b) Oil, gas, or geothermal property, described in Section 1254 of the Internal Revenue Code. (Repealed and added by Stats. 1983, Ch. 488, Sec. 61. Effective July 28, 1983.)
  109. 17856.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

    Verify source ↗

    Section 751(d)(3) of the Internal Revenue Code does not apply to the referenced appreciated inventory items.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17856. Section 751(d)(3) of the Internal Revenue Code, relating to appreciated inventory items subject to tax as a gain on foreign investment company stock, does not apply. (Amended by Stats. 2003, Ch. 185, Sec. 14. Effective January 1, 2004.)
  110. 17857.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

    Verify source ↗

    Section 751(e) of the Internal Revenue Code does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17857. Section 751(e) of the Internal Revenue Code, relating to the limitation on tax attributable to deemed sales of Section 1248 stock, shall not apply. (Amended by Stats. 1999, Ch. 987, Sec. 50. Effective October 10, 1999.)
  111. 17858.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

    Verify source ↗

    A partnership must make any depreciation election, and each partner must account for their distributive share of the resulting depreciation amount.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17858. For purposes of this part and Part 11 (commencing with Section 23001), any election relating to the computation of depreciation shall be made by the partnership and each partner shall take into account his or her distributive share of the depreciation amount computed in accordance with that election. (Amended by Stats. 1992, Ch. 1295, Sec. 12. Effective January 1, 1993.)
  112. 17859.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

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    This section lets a partnership elect to apply subdivision (a) to certain tax years, and it requires the Franchise Tax Board to set the election’s form and manner.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17859. (a) The amendments made by Section 13504 of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 708 of the Internal Revenue Code, relating to the continuation of a partnership, shall apply, except as otherwise provided. (b) The amendments made by Section 13504 of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 743(e) of the Internal Revenue Code, relating to alternative rules for electing investment partnerships, shall apply, except as otherwise provided. (c) The amendments made by Section 13504 of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 168(i)(7)(B) of the Internal Revenue Code, relating to transactions covered, shall apply, except as otherwise provided. (d) (1) A partnership may elect to have subdivision (a) apply to partnership taxable years beginning after December 31, 2017, and before January 1, 2019, in which case subdivisions (b) and (c) shall also apply to the election. (2) The Franchise Tax Board shall specify the form and manner in which the election under paragraph (1) shall be made, as well as whether an amended return or any other information shall be required. (3) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, procedure, or guideline established or issued by the Franchise Tax Board pursuant to paragraph (2). (Added by Stats. 2019, Ch. 39, Sec. 16. (AB 91) Effective July 1, 2019.)
  113. 17865.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. )

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    Part IV of Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code does not apply here, except where another rule says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10. Partners and Partnerships [17851 - 17865] ( Chapter 10 repealed and added by Stats. 1983, Ch. 488, Sec. 61. ) ## 17865. Part IV of Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code (commencing with Section 771 of the Internal Revenue Code), shall not apply, except as otherwise provided. (Added by Stats. 1998, Ch. 322, Sec. 37. Effective August 20, 1998.)
  114. 17935.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.5. Tax on Limited Partnerships [17935 - 17937] ( Chapter 10.5 added by Stats. 1996, Ch. 952, Sec. 18. )

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    Certain limited partnerships must pay an annual tax to the state, with some exceptions and a special $400 amount for specified years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.5. Tax on Limited Partnerships [17935 - 17937] ( Chapter 10.5 added by Stats. 1996, Ch. 952, Sec. 18. ) ## 17935. (a) Except as provided in subdivision (f), for each taxable year beginning on or after January 1, 1997, every limited partnership doing business in this state (as defined by Section 23101) and required to file a return under Section 18633 shall pay annually to this state a tax for the privilege of doing business in this state in an amount equal to the applicable amount specified in Section 23153. (b) (1) In addition to any limited partnership that is doing business in this state and therefore is subject to the tax imposed by subdivision (a), for each taxable year beginning on or after January 1, 1997, every limited partnership that has executed, acknowledged, and filed a certificate of limited partnership with the Secretary of State pursuant to Section 15621 or 15902.01 of the Corporations Code, and every foreign limited partnership that has registered with the Secretary of State pursuant to Section 15692 or 15909.01 of the Corporations Code, shall pay annually the tax prescribed in subdivision (a). The tax shall be paid for each taxable year, or part thereof, until a certificate of cancellation is filed on behalf of the limited partnership with the office of the Secretary of State pursuant to Section 15623, 15696, 15902.03, or 15909.07 of the Corporations Code. (2) If a taxpayer files a return with the Franchise Tax Board that is designated its final return, that board shall notify the taxpayer that the tax imposed by this chapter is due annually until a certificate of cancellation is filed with the Secretary of State pursuant to Section 15623, 15696, 15902.03, or 15909.07 of the Corporations Code. (c) The tax imposed by this chapter shall be due and payable on the date the return is required to be filed under former Section 18432 or 18633. (d) For purposes of this section, “limited partnership” means any partnership formed by two or more persons under the laws of this state or any other jurisdiction and having one or more general partners and one or more limited partners. (e) Notwithstanding subdivision (b), any limited partnership that ceased doing business prior to January 1, 1997, filed a final return with the Franchise Tax Board for a taxable year ending before January 1, 1997, and filed a certificate of dissolution with the Secretary of State pursuant to Section 15623 of the Corporations Code prior to January 1, 1997, shall not be subject to the tax imposed by this chapter for any period following the date the certificate of dissolution was filed with the Secretary of State, but only if the limited partnership files a certificate of cancellation with the Secretary of State pursuant to Section 15623 of the Corporations Code. In the case where a notice of proposed deficiency assessment of tax or a notice of tax due (whichever is applicable) is mailed after January 1, 2001, the first sentence of this subdivision shall not apply unless the certificate of cancellation is filed with the Secretary of State not later than 60 days after the date of the mailing of the notice. (f) (1) (A) Every limited partnership doing business in this state as described in subdivision (a) that files a certificate of limited partnership or registers with the Secretary of the State pursuant to subdivision (b) on or after January 1, 2021, and before January 1, 2024, shall not be subject to the tax imposed under this section for its first taxable year. (B) This subdivision shall become operative only for a taxable year in which any budget measure appropriates one dollar ($1) or more to the Franchise Tax Board for the costs associated with administration of this subdivision. (2) For taxable years beginning on or after January 1, 2027, and before January 1, 2030, every limited partnership required to file a return under Section 18633 shall, instead of the amount specified in Section 23153, pay the annual tax to this state in the amount of four hundred dollars ($400) for its first taxable year. (Amended by Stats. 2026, Ch. 23, Sec. 25. (SB 122) Effective June 29, 2026.)
  115. 17936.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.5. Tax on Limited Partnerships [17935 - 17937] ( Chapter 10.5 added by Stats. 1996, Ch. 952, Sec. 18. )

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    A limited partnership is not subject to the chapter’s taxes if it did no business in California during the taxable year and that taxable year was 15 days or less.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.5. Tax on Limited Partnerships [17935 - 17937] ( Chapter 10.5 added by Stats. 1996, Ch. 952, Sec. 18. ) ## 17936. A limited partnership shall not be subject to the taxes imposed by this chapter if the limited partnership did no business in this state during the taxable year and the taxable year was 15 days or less. (Added by Stats. 1997, Ch. 604, Sec. 10. Effective October 3, 1997.)
  116. 17937.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.5. Tax on Limited Partnerships [17935 - 17937] ( Chapter 10.5 added by Stats. 1996, Ch. 952, Sec. 18. )

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    A limited partnership is exempt from the chapter’s taxes for a taxable year if it files a timely final annual tax return, stops doing business in this state after that year, and files a certificate of cancellation within 12 months of filing the final return.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.5. Tax on Limited Partnerships [17935 - 17937] ( Chapter 10.5 added by Stats. 1996, Ch. 952, Sec. 18. ) ## 17937. (a) A limited partnership shall not be subject to the taxes imposed by this chapter for a taxable year if the limited partnership does all of the following: (1) Files with the Franchise Tax Board a timely final annual tax return for the preceding taxable year. (2) Does not do business in this state after the end of the taxable year for which the final annual tax return was filed. (3) Files a certificate of cancellation with the Secretary of State, pursuant to Section 15623 or 15696 of the Corporations Code, before the end of the 12-month period beginning with the date the final annual tax return was filed. (b) For purposes of this section, a “final annual tax return” is a return described in Section 18633 that is filed on or before the due date of the return, as extended, that the taxpayer designates in the manner prescribed by the Franchise Tax Board as the taxpayer’s final annual return for purposes of the tax imposed under this chapter. For purposes of this chapter, a “final annual tax return” is a return filed pursuant to Section 18633 where the taxpayer is not required to file a subsequent return to reflect the imposition of tax under this chapter. (Added by Stats. 2006, Ch. 773, Sec. 49. Effective September 29, 2006.)
  117. 17941.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. )

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    Limited liability companies doing business in California must pay an annual tax, with specific filing and first-year exceptions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. ) ## 17941. (a) Except as provided in subdivision (g), for each taxable year beginning on or after January 1, 1997, a limited liability company doing business in this state (as defined in Section 23101) shall pay annually to this state a tax for the privilege of doing business in this state in an amount equal to the applicable amount specified in subdivision (d) of Section 23153 for the taxable year. (b) (1) In addition to any limited liability company that is doing business in this state and is therefore subject to the tax imposed by subdivision (a), for each taxable year beginning on or after January 1, 1997, a limited liability company shall pay annually the tax prescribed in subdivision (a) if articles of organization have been accepted, or a certificate of registration has been issued, by the office of the Secretary of State. The tax shall be paid for each taxable year, or part thereof, until a certificate of cancellation of registration or of articles of organization is filed on behalf of the limited liability company with the office of the Secretary of State. (2) If a taxpayer files a return with the Franchise Tax Board that is designated as its final return, the Franchise Tax Board shall notify the taxpayer that the annual tax shall continue to be due annually until a certificate of dissolution is filed with the Secretary of State pursuant to Section 17707.08 of the Corporations Code or a certificate of cancellation is filed with the Secretary of State pursuant to Section 17708.06 of the Corporations Code. (c) The tax assessed under this section shall be due and payable on or before the 15th day of the fourth month of the taxable year. (d) For purposes of this section, “limited liability company” means an organization, other than a limited liability company that is exempt from the tax and fees imposed under this chapter pursuant to Section 23701h or Section 23701x, that is formed by one or more persons under the law of this state, any other country, or any other state, as a “limited liability company” and that is not taxable as a corporation for California tax purposes. (e) Notwithstanding anything in this section to the contrary, if the office of the Secretary of State files a certificate of cancellation pursuant to Section 17707.02 of the Corporations Code for any limited liability company, then paragraph (1) of subdivision (f) of Section 23153 shall apply to that limited liability company as if the limited liability company were properly treated as a corporation for that limited purpose only, and paragraph (2) of subdivision (f) of Section 23153 shall not apply. Nothing in this subdivision entitles a limited liability company to receive a reimbursement for any annual taxes or fees already paid. (f) (1) Notwithstanding any provision of this section to the contrary, for taxable years beginning on or after January 1, 2020, a limited liability company that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the tax imposed under this section for any taxable year the owner is deployed and the limited liability company operates at a loss or ceases operation. (2) The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this subdivision, including a definition for “ceases operation.” (3) For the purposes of this subdivision, all of the following definitions apply: (A) “Deployed” means being called to active duty or active service during a period when a Presidential Executive order specifies that the United States is engaged in combat or homeland defense. “Deployed” does not include either of the following: (i) Temporary duty for the sole purpose of training or processing. (ii) A permanent change of station. (B) “Operates at a loss” means a limited liability company’s expenses exceed its receipts. (C) “Small business” means a limited liability company with total income from all sources derived from, or attributable to, the state of two hundred fifty thousand dollars ($250,000) or less. (4) This subdivision shall become inoperative for taxable years beginning on or after January 1, 2030. (g) (1) (A) Every limited liability company doing business in this state as described in subdivision (a) that organizes or registers with the Secretary of the State pursuant to subdivision (b) on or after January 1, 2021, and before January 1, 2024, shall not be subject to the tax imposed under this section for its first taxable year. (B) This subdivision shall become operative only for a taxable year in which any budget measure appropriates one dollar ($1) or more to the Franchise Tax Board for the costs associated with administration of this subdivision. (2) For taxable years beginning on or after January 1, 2027, and before January 1, 2030, every limited liability company required to file a return under Section 18633 shall, instead of the amount specified in Section 23153, pay the annual tax to this state in the amount of four hundred dollars ($400) for its first taxable year. (Amended by Stats. 2026, Ch. 23, Sec. 26. (SB 122) Effective June 29, 2026.)
  118. 17942.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. )

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    Certain limited liability companies must pay an annual fee to California, with the amount based on income brackets.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. ) ## 17942. (a) In addition to the tax imposed under Section 17941, every limited liability company subject to tax under Section 17941 shall pay annually to this state a fee equal to: (1) Nine hundred dollars ($900), if the total income from all sources derived from or attributable to this state for the taxable year is two hundred fifty thousand dollars ($250,000) or more, but less than five hundred thousand dollars ($500,000). (2) Two thousand five hundred dollars ($2,500), if the total income from all sources derived from or attributable to this state for the taxable year is five hundred thousand dollars ($500,000) or more, but less than one million dollars ($1,000,000). (3) Six thousand dollars ($6,000), if the total income from all sources derived from or attributable to this state for the taxable year is one million dollars ($1,000,000) or more, but less than five million dollars ($5,000,000). (4) Eleven thousand seven hundred ninety dollars ($11,790), if the total income from all sources derived from or attributable to this state for the taxable year is five million dollars ($5,000,000) or more. (b) (1) (A) For purposes of this section, “total income from all sources derived from or attributable to this state” means gross income, as defined in Section 24271, plus the cost of goods sold that are paid or incurred in connection with the trade or business of the taxpayer. However, “total income from all sources derived from or attributable to this state” shall not include allocation or attribution of income or gain or distributions made to a limited liability company in its capacity as a member of, or holder of an economic interest in, another limited liability company if the allocation or attribution of income or gain or distributions are directly or indirectly attributable to income that is subject to the payment of the fee described in this section. (B) For purposes of this section, “total income from all sources derived from or attributable to this state” shall be determined using the rules for assigning sales under Sections 25135 and 25136 and the regulations thereunder, as modified by regulations under Section 25137, other than those provisions that exclude receipts from the sales factor. (2) In the event a taxpayer is a commonly controlled limited liability company, the total income from all sources derived from or attributable to this state, taking into account any election under Section 25110, may be determined by the Franchise Tax Board to be the total income of all the commonly controlled limited liability company members if it determines that multiple limited liability companies were formed for the primary purpose of reducing fees payable under this section. A determination by the Franchise Tax Board under this subdivision may only be made with respect to one limited liability company in a commonly controlled group. However, each commonly controlled limited liability company shall be jointly and severally liable for the fee. For purposes of this section, commonly controlled limited liability companies shall include the taxpayer and any other partnership or limited liability company doing business (as defined in Section 23101) in this state and required to file a return under Section 18633 or 18633.5, in which the same persons own, directly or indirectly, more than 50 percent of the capital interests or profits interests. (c) The fee assessed under this section shall be due and payable on the date the return of the limited liability company is required to be filed under Section 18633.5, shall be collected and refunded in the same manner as the taxes imposed by this part, and shall be subject to interest and applicable penalties. (d) (1) The fee imposed by this section shall be estimated and paid on or before the 15th day of the sixth month of the current taxable year. (2) A penalty of 10 percent of the amount of any underpayment shall be added to the fee. The underpayment amount shall be equal to the difference between the total amount of the fee imposed by this section for the taxable year less the amount paid under paragraph (1) by the date specified in that paragraph. A penalty shall not be imposed with respect to any fee estimated and paid under this section if the amount paid by the date prescribed in this subdivision is equal to or greater than the total amount of the fee of the limited liability company for the preceding taxable year. (Amended by Stats. 2008, Ch. 763, Sec. 6. Effective September 30, 2008. Note: See provisions clarifying this section's application in Sec. 8 of Stats. 2008, 1st Ex., Ch. 1, which took effect on Dec. 31, 2008.)
  119. 17943.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. )

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    The Legislature said the annual fee amount in Section 17942 applies starting with the taxable year beginning January 1, 2001, and later years, even if a study said otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. ) ## 17943. It is the intent of the Legislature that the amount of the annual fee described in Section 17942 shall apply to the taxable year beginning January 1, 2001, and subsequent taxable years, notwithstanding the results of any study prepared by the Franchise Tax Board and submitted to the Joint Legislative Budget Committee pursuant to former Section 17943. (Repealed and added by Stats. 2001, Ch. 391, Sec. 3. Effective October 1, 2001.)
  120. 17944.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. )

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    This section sets when dissolution, withdrawal, cancellation, and foreign registration cancellation take effect, and requires the Secretary of State to recommend certified mail for required filings and to acknowledge receipt within 21 days.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. ) ## 17944. (a) The effective date of dissolution, withdrawal, or cancellation of a limited liability company is the date on which the certified copy of the court decree, judgment, or order declaring the limited liability company duly wound up and dissolved is filed in the office of the Secretary of State or the date on which the certificate of winding up and dissolution is filed in the office of the Secretary of State. For the purposes of this chapter, the effective date of cancellation of registration of a foreign limited liability company is the date on which the certificate of cancellation of registration is filed in the office of the Secretary of State. (b) The Secretary of State shall, through an information program and by forms and instructions, recommend that all required documents filed with the Secretary of State be sent, if mailed, by certified mail with return receipt requested. The Secretary of State shall also notify persons that receipt of documents by the Secretary of State will be acknowledged within 21 days of receipt. (c) On or before 21 days after their receipt, the Secretary of State shall provide a payer with acknowledgment of the receipt of documents submitted by a limited liability company pursuant to this chapter. (Added by Stats. 1996, Ch. 952, Sec. 19. Effective January 1, 1997.)
  121. 17946.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. )

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    A limited liability company is exempt from the chapter’s taxes and fees if it did no business in California during the taxable year and that taxable year was 15 days or less.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. ) ## 17946. A limited liability company shall not be subject to the taxes and fees imposed by this chapter if the limited liability company did no business in this state during the taxable year and the taxable year was 15 days or less. (Added by Stats. 1996, Ch. 952, Sec. 19. Effective January 1, 1997.)
  122. 17947.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. )

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    A limited liability company is not subject to this chapter’s taxes for a taxable year if it files a timely final annual tax return, stops doing business in the state after that year, and files dissolution or cancellation paperwork within 12 months.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.6. Tax and Fees on Limited Liability Companies [17941 - 17947] ( Chapter 10.6 added by Stats. 1996, Ch. 952, Sec. 19. ) ## 17947. (a) A limited liability company shall not be subject to the taxes imposed by this chapter for a taxable year if the limited liability company does all of the following: (1) Files with the Franchise Tax Board a timely final annual tax return for the preceding taxable year. (2) Does not do business in this state after the end of the taxable year for which the final annual tax return was filed. (3) Files a certificate of dissolution with the Secretary of State, pursuant to Section 17707.08 of the Corporations Code, or a certificate of cancellation with the Secretary of State pursuant to Section 17708.06 of the Corporations Code, before the end of the 12-month period beginning with the date the final annual tax return was filed. (b) For purposes of this section, a “final annual tax return” is a return described in Section 18633.5 that is filed on or before the due date of the return, as extended, that the taxpayer designates in the manner prescribed by the Franchise Tax Board as the taxpayer’s final return for purposes of the tax imposed under this chapter. For purposes of this chapter, a “final annual tax return” is a return filed pursuant to Section 18633.5 where the taxpayer is not required to file a subsequent return to reflect the imposition of tax under this chapter. (Amended by Stats. 2012, Ch. 419, Sec. 27. (SB 323) Effective January 1, 2013. Operative January 1, 2014, by Sec. 32 of Ch. 419.)
  123. 17948.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.7. Tax on Registered Limited Liability Partnerships and Foreign Limited Liability Partnerships [17948 - 17948.3] ( Chapter 10.7 added by Stats. 1996, Ch. 952, Sec. 20. )

    Verify source ↗

    Certain limited liability partnerships must pay an annual tax to the Franchise Tax Board, with specific exceptions and a temporary $400 amount for some first taxable years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.7. Tax on Registered Limited Liability Partnerships and Foreign Limited Liability Partnerships [17948 - 17948.3] ( Chapter 10.7 added by Stats. 1996, Ch. 952, Sec. 20. ) ## 17948. (a) Except as provided in subdivision (e), for each taxable year beginning on or after January 1, 1997, every limited liability partnership doing business in this state (as defined in Section 23101) and required to file a return under Section 18633 shall pay annually to the Franchise Tax Board a tax for the privilege of doing business in this state in an amount equal to the applicable amount specified in paragraph (1) of subdivision (d) of Section 23153 for the taxable year. (b) In addition to any limited liability partnership that is doing business in this state and therefore is subject to the tax imposed by subdivision (a), for each taxable year beginning on or after January 1, 1997, every registered limited liability partnership that has registered with the Secretary of State pursuant to Section 16953 of the Corporations Code and every foreign limited liability partnership that has registered with the Secretary of State pursuant to Section 16959 of the Corporations Code shall pay annually the tax prescribed in subdivision (a). The tax shall be paid for each taxable year, or part thereof, until any of the following occurs: (1) A notice of cessation is filed with the Secretary of State pursuant to subdivision (b) of Section 16954 or 16960 of the Corporations Code. (2) A foreign limited liability partnership withdraws its registration pursuant to subdivision (a) of Section 16960 of the Corporations Code. (3) The registered limited liability partnership or foreign limited liability partnership has been dissolved and finally wound up. (c) The tax assessed under this section shall be due and payable on the date the return is required to be filed under Section 18633. (d) If a taxpayer files a return with the Franchise Tax Board that is designated as its final return, the Franchise Tax Board shall notify the taxpayer that the annual tax shall continue to be due annually until a certificate of cancellation is filed with the Secretary of State pursuant to Section 16954 or 16960 of the Corporations Code. (e) (1) (A) Every limited liability partnership doing business in this state as described in subdivision (a) that registers with the Secretary of the State pursuant to subdivision (b) on or after January 1, 2021, and before January 1, 2024, shall not be subject to the tax imposed under this section for its first taxable year. (B) This subdivision shall become operative only for a taxable year in which any budget measure appropriates one dollar ($1) or more to the Franchise Tax Board for the costs associated with administration of this subdivision. (2) For taxable years beginning on or after January 1, 2027, and before January 1, 2030, every limited liability partnership required to file a return under Section 18633 shall, instead of the amount specified in Section 23153, pay the annual tax to this state in the amount of four hundred dollars ($400) for its first taxable year. (Amended by Stats. 2026, Ch. 23, Sec. 27. (SB 122) Effective June 29, 2026.)
  124. 17948.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.7. Tax on Registered Limited Liability Partnerships and Foreign Limited Liability Partnerships [17948 - 17948.3] ( Chapter 10.7 added by Stats. 1996, Ch. 952, Sec. 20. )

    Verify source ↗

    Certain registered or foreign limited liability partnerships are exempt from the chapter’s taxes and fees if they did no business in the state during the taxable year and the taxable year was 15 days or less.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.7. Tax on Registered Limited Liability Partnerships and Foreign Limited Liability Partnerships [17948 - 17948.3] ( Chapter 10.7 added by Stats. 1996, Ch. 952, Sec. 20. ) ## 17948.2. A registered limited liability partnership or foreign limited liability partnership shall not be subject to the taxes and fees imposed by this chapter if the registered limited liability partnership or foreign limited liability partnership did no business in this state during the taxable year and the taxable year was 15 days or less. (Added by Stats. 1996, Ch. 952, Sec. 20. Effective January 1, 1997.)
  125. 17948.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.7. Tax on Registered Limited Liability Partnerships and Foreign Limited Liability Partnerships [17948 - 17948.3] ( Chapter 10.7 added by Stats. 1996, Ch. 952, Sec. 20. )

    Verify source ↗

    A registered limited liability partnership is exempt from this chapter’s taxes for a taxable year if it meets three filing and business-activity conditions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 10.7. Tax on Registered Limited Liability Partnerships and Foreign Limited Liability Partnerships [17948 - 17948.3] ( Chapter 10.7 added by Stats. 1996, Ch. 952, Sec. 20. ) ## 17948.3. (a) A registered limited liability partnership shall not be subject to the taxes imposed by this chapter for a taxable year if the registered limited liability partnership does all of the following: (1) Files with the Franchise Tax Board a timely final annual tax return for the preceding taxable year. (2) Does not do business within this state after the end of the taxable year for which the final annual tax return was filed. (3) Files a notice in accordance with subdivision (b) of Section 16954 or subdivision (b) of Section 16960 of the Corporations Code with the Secretary of State before the end of the 12-month period beginning with the date of the final annual tax return was filed. (b) For purposes of this section, a “final annual tax return” is a return described in Section 18633 that is filed on or before the due date of the return, as extended, that the taxpayer designates in the manner prescribed by the Franchise Tax Board as the taxpayer’s final annual tax return for purposes of the tax imposed under this chapter. For purposes of this chapter, a “final annual tax return” is a return filed pursuant to Section 18633 where the taxpayer is not required to file a subsequent return to reflect the imposition of tax under this chapter. (Added by Stats. 2006, Ch. 773, Sec. 53. Effective September 29, 2006.)
  126. 17951.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    Nonresident taxpayers include only California-source gross income when calculating taxable income, subject to listed federal-law exclusions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. ) ## 17951. (a) For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, in the case of nonresident taxpayers the gross income includes only the gross income from sources within this state. (b) Notwithstanding subdivision (a), the gross income of a nonresident taxpayer does not include income not subject to the Personal Income Tax Law (Part 10 (commencing with Section 17001) of Division 2) by operation of the following federal laws: (1) Section 11108 of Title 46, United States Code, relating to compensation for the performance of duties of certain merchant seamen. (2) Section 11502 of Title 49, United States Code, relating to compensation of an employee of a rail carrier. (3) Section 14503 of Title 49, United States Code, relating to compensation of an employee of a motor carrier. (4) Section 40116 of Title 49, United States Code, relating to the pay of an employee of an air carrier. (5) Section 571 of Title 50, Appendix, United States Code, relating to military compensation of service members. (Amended by Stats. 2004, Ch. 62, Sec. 1. Effective January 1, 2005.)
  127. 17952.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    This section says nonresidents’ income from stocks, bonds, notes, or other intangible personal property is generally not California-source income unless the property has a business situs in California.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. ) ## 17952. For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, income of nonresidents from stocks, bonds, notes, or other intangible personal property is not income from sources within this state unless the property has acquired a business situs in this state, except that if a nonresident buys or sells such property in this state or places orders with brokers in this state to buy or sell such property so regularly, systematically, and continuously as to constitute doing business in this state, the profit or gain derived from such activity is income from sources within this state irrespective of the situs of the property. (Amended by Stats. 2001, Ch. 920, Sec. 20. Effective January 1, 2002.)
  128. 17952.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. )

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    Nonresidents generally exclude qualified retirement income from California-source gross income when computing taxable income, subject to the stated timing and residency conditions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. ) ## 17952.5. (a) For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, gross income of a nonresident, as defined in Section 17015, from sources within this state shall not include “qualified retirement income” received on or after January 1, 1996, for any part of the taxable year during which the taxpayer was not a resident of this state. (b) For purposes of this section, “qualified retirement income” means income from any of the following: (1) A qualified trust under Section 401(a) of the Internal Revenue Code that is exempt under Section 501(a) of the Internal Revenue Code from taxation. (2) A simplified employee pension as defined in Section 408(k) of the Internal Revenue Code. (3) An annuity plan described in Section 403(a) of the Internal Revenue Code. (4) An annuity contract described in Section 403(b) of the Internal Revenue Code. (5) An individual retirement plan described in Section 7701(a)(37) of the Internal Revenue Code. (6) An eligible deferred compensation plan as defined in Section 457 of the Internal Revenue Code. (7) A governmental plan as defined in Section 414(d) of the Internal Revenue Code. (8) A trust described in Section 501(c)(18) of the Internal Revenue Code. (9) Any plan, program, or arrangement described in Section 3121(v)(2)(C) of the Internal Revenue Code, or any plan, program, or arrangement that is in writing, that provides for retirement payments in recognition of prior service to be made to a retired partner, and that is in effect immediately before retirement begins, if that income is either of the following: (A) Part of a series of substantially equal periodic payments (not less frequently than annually), which may include income described in paragraphs (1) to (8), inclusive, made for either of the following: (i) The life or the life expectancy of the recipient (or the joint lives or joint life expectancies of the recipient and the designated beneficiary of the recipient). (ii) A period of not less than 10 years. (B) A payment received after termination of employment, under a plan, program, or arrangement to which that employment relates, maintained solely for the purpose of providing retirement benefits for employees in excess of the limitation imposed by Section 401(a)(17), 401(k), 401(m), 402(g), 403(b), 408(k), or 415 of the Internal Revenue Code, or any combination of those sections, or any other limitation on contributions or benefits in the Internal Revenue Code on plans to which any of those sections apply. (C) The fact that payments may be adjusted, from time to time, pursuant to this plan, program, or arrangement to limit total disbursements under a predetermined formula, or to provide cost-of-living or similar adjustments, will not cause the periodic payments provided under that plan, program, or arrangement to fail the “substantially-equal-periodic-payments” test. (10) Any retired or retainer pay of a member or former member of a uniform service computed under Section 1401 and following of Title 10 of the United States Code. (c) For purposes of this section, the term “retired partner” is an individual who is described as a partner in Section 7701(a)(2) of the Internal Revenue Code and who is retired under that individual’s partnership agreement. (d) This section shall apply only to any taxable year, or portion thereof, that the provisions of Section 114 of Title 4 of the United States Code, relating to limitation on state income taxation of certain pension income, are effective. (e) Except as otherwise provided, references to the Internal Revenue Code are subject to paragraph (1) of subdivision (a) of Section 17024.5. (Amended by Stats. 2010, Ch. 14, Sec. 35. (SB 401) Effective January 1, 2011.)
  129. 17953.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    For this tax calculation, income paid or payable to nonresident beneficiaries counts as California-source income only if it comes from estate or trust income derived from sources within California.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. ) ## 17953. For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, income of estates and trusts distributed or distributable to nonresident beneficiaries is income from sources within this state only if distributed or distributable out of income of the estate or trust derived from sources within this state. For the purposes of this section, the nonresident beneficiary shall be deemed to be the owner of intangible personal property from which the income of the estate or trust is derived. (Amended by Stats. 2001, Ch. 920, Sec. 22. Effective January 1, 2002.)
  130. 17954.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. )

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    For certain nonresident and part-year resident income calculations, gross income from inside and outside the state must be allocated and apportioned under rules set by the Franchise Tax Board, except where Section 25141 applies.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. ) ## 17954. For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, except as provided in Section 25141, gross income from sources within and without this state shall be allocated and apportioned under rules and regulations prescribed by the Franchise Tax Board. (Amended by Stats. 2001, Ch. 920, Sec. 23. Effective January 1, 2002.)
  131. 17955.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. )

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    Nonresidents generally exclude dividends, interest, and gains or losses from qualifying investment securities from California-source gross income, if the section’s contact and ownership conditions are met.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 11. Gross Income of Nonresidents [17951 - 17955] ( Chapter 11 added by Stats. 1955, Ch. 939. ) ## 17955. (a) For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, notwithstanding Sections 17951, 17952, and 17953, gross income of a nonresident (as defined in Section 17015) from sources within this state shall not include dividends, interest, or gains and losses from qualifying investment securities if any of the following apply: (1) In the case of an individual, with respect to the qualifying investment securities, the taxpayer’s only contact with this state is through a broker, dealer, or investment adviser located in this state. (2) In the case of a partner’s distributive share of income from qualifying investment securities, the partnership qualifies as an investment partnership, whether or not the partnership has a usual place of business located in this state. (3) In the case of a beneficiary of a qualifying estate or trust, the taxpayer’s only contact with this state is through an investment account managed by a corporate fiduciary located in this state. (4) In the case of a unit holder in a regulated investment company (as defined in Section 851 of the Internal Revenue Code), to the extent of the dividends distributed by the regulated investment company, whether or not the regulated investment company has a principal place of business in this state. (b) This section shall not apply to income derived from investment activity that is interrelated with any trade or business activity of the nonresident or an entity in which the nonresident owns an interest in this state, whose primary activities are separate and distinct from the acts of acquiring, managing, or disposing of qualified investment securities, or if those securities were acquired with working capital of a trade or business activity conducted in this state in which the nonresident owns an interest. (c) For purposes of this section: (1) “Investment partnership” means a partnership that meets both of the following requirements: (A) No less than 90 percent of the partnership’s cost of its total assets consist of qualifying investment securities, deposits at banks or other financial institutions, and office space and equipment reasonably necessary to carry on its activities as an investment partnership. (B) No less than 90 percent of its gross income consists of interest, dividends, and gains from the sale or exchange of qualifying investment securities. (2) “Qualifying estate or trust” means an estate or trust that meets both of the following requirements: (A) No less than 90 percent of the estate’s or trust’s cost of its total assets consist of qualifying investment securities, deposits at banks or other financial institutions, and office space and equipment reasonably necessary to carry on its investment activities. (B) No less than 90 percent of its gross income consists of interest, dividends, and gains from the sale or exchange of qualifying investment securities. (3) (A) “Qualifying investment securities” include all of the following: (i) Common stock, including preferred or debt securities convertible into common stock, and preferred stock. (ii) Bonds, debentures, and other debt securities. (iii) Foreign and domestic currency deposits or equivalents and securities convertible into foreign securities. (iv) Mortgage- or asset-backed securities secured by federal, state, or local governmental agencies. (v) Repurchase agreements and loan participations. (vi) Foreign currency exchange contracts and forward and futures contracts on foreign currencies. (vii) Stock and bond index securities and futures contracts, and other similar financial securities and futures contracts on those securities. (viii) Options for the purchase or sale of any of the securities, currencies, contracts, or financial instruments described in clauses (i) to (vii), inclusive. (ix) Regulated futures contracts. (B) “Qualifying investment securities” does not include an interest in a partnership unless that partnership is itself an investment partnership. (Amended by Stats. 2001, Ch. 920, Sec. 24. Effective January 1, 2002.)
  132. 18.

    ## Revenue and Taxation Code - RTC ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1939, Ch. 154. )

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    This section says that “signature” or “subscription” includes a mark.

    ## Revenue and Taxation Code - RTC ## GENERAL PROVISIONS ( General Provisions enacted by Stats. 1939, Ch. 154. ) ## 18. “Signature” or “subscription” includes mark. Such mark shall be made as required in the Civil Code. (Enacted by Stats. 1939, Ch. 154.)
  133. 18001.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

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    Residents may claim a credit against net tax for certain income taxes paid to another state, subject to listed limits and exclusions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18001. (a) Subject to the following conditions, residents shall be allowed a credit against the “net tax” (as defined by Section 17039) for net income taxes imposed by and paid to another state (not including any preference, alternative, or minimum tax comparable to the tax imposed by Section 17062) on income taxable under this part: (1) The credit shall be allowed only for taxes paid to the other state (not including any preference, alternative, or minimum tax comparable to the tax imposed by Section 17062) on income derived from sources within that state which is taxable under its laws irrespective of the residence or domicile of the recipient. This paragraph shall not apply to residents to whom subdivision (b) of Section 17014 applies. (2) The credit shall not be allowed if the other state allows residents of this state a credit against the taxes imposed by that state (not including any preference, alternative, or minimum tax comparable to the tax imposed by Section 17062) for “net tax” (as defined by Section 17039) paid or payable under this part. (3) The credit shall not exceed the proportion of the “net tax” (as defined by Section 17039) payable under this part as the income subject to tax in the other state (not including any preference, alternative, or minimum tax comparable to the tax imposed by Section 17062) and also taxable under this part bears to the taxpayer’s entire income upon which the “net tax” (as defined by Section 17039) is imposed by this part. (4) No credit shall be allowed under this section for any tax imposed by Section 17062. (b) For purposes of this section, the amount of “net income taxes” paid to another state shall include the taxpayer’s pro rata share of any taxes on, or according to, or measured by, income or profits paid or accrued, which were paid by an S corporation, as provided by Section 18006. (c) For purposes of this section, “income derived from sources within that state” shall be determined by applying the nonresident sourcing rules for determining income from sources within this state, as specified in Chapter 11 (commencing with Section 17951), and the regulations thereunder. (Amended by Stats. 2002, Ch. 374, Sec. 3. Effective January 1, 2003.)
  134. 18002.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

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    Nonresidents may claim a credit against net tax for certain net income taxes paid to their state of residence, if the section’s conditions are met.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18002. (a) Subject to the following conditions, nonresidents shall be allowed a credit against the “net tax” (as defined by Section 17039) for net income taxes imposed by and paid to the state of residence (not including any preference, alternative, or minimum tax comparable to the tax imposed by Section 17062) on income taxable under this part: (1) The credit shall be allowed only if the state of residence either does not tax income of residents of this state derived from sources within that state or allows residents of this state a credit against the taxes imposed by that state on such income for “net tax” (as defined by Section 17039) paid or payable thereon under this part. (2) The credit shall not be allowed for taxes paid to a state which allows its residents a credit against the taxes imposed by that state for “net tax” (as defined by Section 17039) paid or payable under this part irrespective of whether its residents are allowed a credit against the taxes imposed by this part for income taxes paid to that state. (3) Credit shall be allowed only for such proportion of the taxes paid to the state of residence (not including any preference, alternative, or minimum tax comparable to the tax imposed by Section 17062) as the income taxable under this part and also subject to tax in the state of residence bears to the entire income upon which the taxes paid to the state of residence are imposed. (4) The credit shall not exceed such proportion of the “net tax” (as defined by Section 17039) payable under this part as the income subject to tax in the state of residence and also taxable under this part bears to the entire income taxable under this part. (5) No credit shall be allowed under this section for any tax imposed by Section 17062. (b) For purposes of this section, the amount of “net income taxes” paid to another state shall include the taxpayer’s pro rata share of any taxes on, or according to, or measured by, income or profits paid or accrued, which were paid by an S corporation, as provided by Section 18006. (Amended by Stats. 1990, Ch. 1349, Sec. 9. Effective September 26, 1990.)
  135. 18003.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

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    For this chapter, an estate or trust is treated as a resident of the state that taxes its income, even if the income comes from outside that state.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18003. For the purpose of this chapter an estate or trust is considered a resident of the state which taxes the income of the estate or trust irrespective of whether the income is derived from sources within that state. (Amended by Stats. 1959, Ch. 321.)
  136. 18004.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

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    An estate or trust that is a resident of this state and another state may get a credit for net income taxes paid to the other state, subject to proportional limits.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18004. If an estate or trust is a resident of this State and also a resident of another state, it shall, notwithstanding the limitations contained in Sections 18001 and 18002, be allowed a credit against the taxes imposed by this part for net income taxes imposed by and paid to the other state, subject to the following conditions: (a) Credit shall be allowed only for such proportion of the taxes paid to the other state as the income taxable under this part and also subject to tax in the other state bears to the entire income upon which the taxes paid to the other state are imposed. (b) The credit shall not exceed such proportion of the tax payable under this part as the income subject to tax in the other state and also taxable under this part bears to the entire income taxable under this part. (Amended by Stats. 1959, Ch. 321.)
  137. 18005.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    A resident beneficiary of an estate or trust may claim a California credit for net income taxes the estate or trust paid to another state, but only within specified proportional limits.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18005. A resident beneficiary of an estate or trust who is taxable on the income of the estate or trust under Chapter 9 of this part shall, subject to the following conditions, be allowed a credit against the taxes imposed by this part on such income for net income taxes paid by the estate or trust to another state on such income: (a) Credit shall be allowed only for such proportion of the tax paid to the other state by the estate or trust as the income of the estate or trust which is taxable to the beneficiary under this part and also taxed to the estate or trust in the other state bears to the entire income of the estate or trust upon which the taxes paid to the other state were imposed. (b) The credit shall not exceed such proportion of the tax payable under this part as the income of the estate or trust which is taxable to the beneficiary under this part and also taxed to the estate or trust in the other state bears to the beneficiary’s entire income upon which the tax is imposed by this part. (Amended by Stats. 1957, Ch. 215.)
  138. 18006.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    Partners and qualifying S corporation shareholders may treat certain out-of-state net income taxes paid by the entity as if they had paid them directly, for credit calculations under Sections 18001 or 18002.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18006. For purposes of determining a credit under Section 18001 (relating to residents) or Section 18002 (relating to nonresidents), both of the following apply: (a) A member of a partnership is allowed to treat his, her, or its pro rata share of net income taxes paid to another state by the partnership as if those taxes had been paid directly by the partner. (b) (1) A shareholder of a corporation that is an S corporation under Chapter 4.5 (commencing with Section 23800) of Part 11 is allowed to treat his or her pro rata share of net income taxes paid to another state by the S corporation as if those taxes had been paid by the shareholder. (2) This subdivision applies only if either of the following requirements is met: (A) The state imposing the tax does not allow corporations to elect to be treated as an S corporation. (B) The state imposes a tax on S corporations and the corporation referred to in paragraph (1) has elected to be treated as an S corporation in the other state. (Amended by Stats. 2003, Ch. 185, Sec. 15. Effective January 1, 2004.)
  139. 18007.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    If a taxpayer later gets a credit or refund of taxes paid to another state that were used for a credit under this chapter, the taxpayer must immediately report it to the Franchise Tax Board.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18007. If any taxes paid to another state for which a taxpayer has been allowed a credit under this chapter are at any time credited or refunded to the taxpayer, the taxpayer shall immediately report that fact to the Franchise Tax Board. (Amended by Stats. 1959, Ch. 321.)
  140. 18008.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    A taxpayer must pay a tax equal to the credit allowed for taxes credited or refunded by another state when the Franchise Tax Board gives notice and demand.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18008. A tax equal to the credit allowed for the taxes credited or refunded by the other state is due and payable from the taxpayer upon notice and demand from the Franchise Tax Board. (Amended by Stats. 1957, Ch. 215.)
  141. 18009.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    Interest is to be assessed, collected, and paid like the tax, at the adjusted annual rate set under Section 19521, from when the credit is allowed until payment.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18009. Interest shall be assessed, collected and paid in the same manner as the tax at the adjusted annual rate established pursuant to Section 19521 from the date the credit was allowed under this part to the date of payment. (Amended by Stats. 1993, Ch. 31, Sec. 16. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  142. 18011.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. )

    Verify source ↗

    A tax credit for net income taxes paid to another state is not allowed if allowing it would create invalid or illegal discrimination against another taxpayer or class of taxpayers.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 12. Credit for Taxes Paid [18001 - 18011] ( Chapter 12 added by Stats. 1955, Ch. 939. ) ## 18011. The credit against the taxes imposed by this part for net income taxes paid to another state shall not be allowed to any taxpayer or any class of taxpayers if the allowance of the credit will result in an invalid or illegal discrimination against another taxpayer or another class of taxpayers. (Amended by Stats. 1957, Ch. 215.)
  143. 18031.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    This section says Subchapter O of the Internal Revenue Code applies to gain or loss on disposition of property, unless another provision says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18031. Subchapter O of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to gain or loss on disposition of property, shall apply, except as otherwise provided. (Amended by Stats. 1993, Ch. 873, Sec. 27. Effective October 6, 1993.)
  144. 18031.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    This section applies the federal real-property exchange rule to certain California taxpayers, but only if income thresholds are met and the exchange timing fits the dates stated here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18031.5. (a) The amendments made by Section 13303(a) and (b) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 1031 of the Internal Revenue Code, relating to exchange of real property held for productive use or investment, shall apply, except as otherwise provided in this section. (b) (1) (A) In the case of a taxpayer who is a head of household, a surviving spouse, or spouses filing a joint return, this section shall only apply to those taxpayers with adjusted gross income, as defined in Section 17072, of five hundred thousand dollars ($500,000) or more for the taxable year in which the exchange begins. (B) In the case of a taxpayer filing an individual return, this section shall only apply to those taxpayers with adjusted gross income, as defined in Section 17072, of two hundred fifty thousand dollars ($250,000) or more for the taxable year in which the exchange begins. (2) This subdivision shall not apply for taxable years beginning on or after January 1, 2025. (c) (1) This section shall apply to exchanges completed after January 10, 2019. (2) This section shall not apply to an exchange where the property to be disposed of by the taxpayer in the exchange is disposed of by that taxpayer on or before January 10, 2019, or where the property to be received by the taxpayer in the exchange is received by that taxpayer on or before January 10, 2019. (Amended by Stats. 2025, Ch. 231, Sec. 58. (SB 711) Effective October 1, 2025.)
  145. 18032.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    A taxpayer must file an information return with the Franchise Tax Board when a property exchange is not recognized under Section 1031 and the acquired property is outside California.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18032. (a) If gain or loss from the exchange of property in this state of a taxpayer is not recognized under this part because of Section 1031 of the Internal Revenue Code, relating to exchange of property held for productive use or investment, for a taxable year and the property acquired in that exchange is located outside of this state, the taxpayer shall file an information return with the Franchise Tax Board for the taxable year of the exchange and for each subsequent taxable year in which the gain or loss from that exchange has not been recognized, in the form and manner prescribed by the Franchise Tax Board. (b) If a taxpayer fails to file an information return required pursuant to subdivision (a), and fails to file a return required under Part 10.2 (commencing with Section 18401), the Franchise Tax Board may make an estimate of the net income, from any available information, including the amount of gain described in subdivision (a), and may propose to assess the amount of tax, interest, and penalties due in the same manner as Section 19087. (c) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section. (d) This section shall apply to exchanges of property that occur in taxable years beginning on or after January 1, 2014. (Added by Stats. 2013, Ch. 26, Sec. 4. (AB 92) Effective June 27, 2013.)
  146. 18036.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    This section requires certain basis adjustments for specified deductions, and bars basis adjustments for listed fees and tax amounts.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18036. (a) In addition to the adjustments to basis provided by Section 1016(a) of the Internal Revenue Code, a proper adjustment shall also be made for amounts allowed as deductions as deferred expenses under subdivision (b) of former Section 17689 or former Section 17689.5 (relating to certain exploration expenditures) and resulting in a reduction of the taxpayer’s taxes under this part, but not less than the amounts allowable under those sections for the taxable year and prior years. A proper adjustment shall also be made for amounts deducted under Section 17252.5, 17265, or 17266. (b) Notwithstanding the provisions of Sections 164(a) and 1016(a) of the Internal Revenue Code, no adjustment to basis shall be made for any of the following: (1) Abandonment fees paid in respect of property on which the open-space easement is terminated under Section 51061 or 51093 of the Government Code. (2) Tax recoupment fees paid under Section 51142 of the Government Code. (3) Sales or use tax which is paid or incurred by the taxpayer in connection with the acquisition of property for which a tax credit is claimed pursuant to Section 17052.13. (c) The provisions of Section 1016(c) of the Internal Revenue Code, relating to increase in basis of property on which additional estate tax is imposed, shall be applicable. (d) The amendments made to Section 1016 of the Internal Revenue Code by Section 1913(a) of Public Law 102-486, relating to deduction for clean-fuel vehicles and certain refueling property, shall apply to property placed in service after June 30, 1993, without respect to taxable year. (e) The provisions of Section 1016(a)(38) of the Internal Revenue Code, relating to basis adjustments for capital gains invested in opportunity zones, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 59. (SB 711) Effective October 1, 2025.)
  147. 18036.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    A proper adjustment to basis must also be made for certain property acquired when part of the gain on another property sale was not recognized under Section 18038.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18036.5. In addition to the adjustments to basis provided by Section 1016(a) of the Internal Revenue Code, a proper adjustment shall also be made in the case of property the acquisition of which resulted under Section 18038.5 in the nonrecognition of any part of the gain realized on the sale of other property, to the extent provided in paragraph (4) of subdivision (b) of Section 18038.5. (Amended by Stats. 2003, Ch. 185, Sec. 16. Effective January 1, 2004.)
  148. 18037.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    A taxpayer’s election under IRC 1033(g)(3) cannot be denied just because the taxpayer expensed the asset on the federal return.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18037. An election made by a taxpayer pursuant to Section 1033(g)(3) of the Internal Revenue Code, relating to the election to treat outdoor advertising displays as real property, may not be denied because the taxpayer has, on his or her federal return, elected to expense the asset. (Amended by Stats. 2003, Ch. 185, Sec. 17. Effective January 1, 2004.)
  149. 18037.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    The listed federal tax amendments do not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18037.5. The amendments made by Section 844 of the Pension Protection Act of 2006 (Public Law 109-280) to Section 1035 of the Internal Revenue Code, shall not apply. (Added by Stats. 2010, Ch. 14, Sec. 37. (SB 401) Effective January 1, 2011.)
  150. 18038.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    Section 1040 of the Internal Revenue Code does not apply to this provision’s covered real property transfer rule.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18038. Section 1040 of the Internal Revenue Code, relating to transfer of certain real property, does not apply. (Amended by Stats. 2003, Ch. 185, Sec. 20. Effective January 1, 2004.)
  151. 18038.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    Section 1045 of the Internal Revenue Code does not apply to this provision’s rollover rule for gain from qualified small business stock.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18038.4. Section 1045 of the Internal Revenue Code, relating to rollover of gain from qualified small business stock to another qualified small business stock, shall not apply. (Added by Stats. 1998, Ch. 322, Sec. 40. Effective August 20, 1998.)
  152. 18039.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    This section changes how basis is determined for certain property and says Internal Revenue Code section 1052(c) does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18039. Section 1052 of the Internal Revenue Code, relating to basis established by prior revenue acts, is modified as follows: (a) Section 1052(c) of the Internal Revenue Code does not apply. (b) If the property was acquired, after February 28, 1913, in a transaction to which the Personal Income Tax Law of 1954 applied, and the basis thereof, for purposes of the Personal Income Tax Law of 1954, was prescribed by Section 17747, 17751, 17755, 17756, 17757, 17758, or 17788 of that law, then for purposes of this part the basis shall be the same as the basis therein prescribed in the Personal Income Tax Law of 1954. (Amended by Stats. 2003, Ch. 185, Sec. 21. Effective January 1, 2004.)
  153. 18041.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    This section allows nonrecognition of gain on certain sales of assisted housing or related property if the sale proceeds are reinvested in California residential real property within two years and, in some cases, affordability is maintained for 30 years or the remaining federal assistance term, whichever is greater.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18041.5. (a) No gain shall be recognized with respect to a sale of an assisted housing development to a tenant association, nonprofit organization, profit-motivated organization or individual, or public agency which obligates itself and any successors in interest to maintain the assisted housing development affordable to persons or families of lower income or very low income for either a period of 30 years from the date of sale or the remaining term of existing federal government assistance as listed in subdivision (a) of Section 65863.10 of the Government Code, whichever is greater, provided that all of the proceeds from the sale are reinvested in residential real property, other than a personal residence, in this state within two years after the sale. This obligation shall be recorded at the time of sale in the office of the county recorder of the county in which the development is located. (b) No gain shall be recognized with respect to a sale of a majority or more of units in an assisted housing development converted to condominium interests, to a tenant association, nonprofit organization, profit-motivated organization or individual, or public agency which obligates itself and any successors in interest to maintain the condominiums affordable to persons or families of lower income or very low income for either a period of 30 years from the date of sale or the remaining term of existing federal government assistance as listed in subdivision (a) of Section 65863.10 of the Government Code, provided that all of the proceeds from the sale are reinvested in residential real property, other than a personal residence, in this state within two years after the sale. This obligation shall be recorded at the time of sale in the office of the county recorder of the county in which the development is located. (c) No gain shall be recognized with respect to a sale of real property to a majority or more of existing lower income and very low income residents of that property, provided that all of the proceeds from the sale are reinvested in residential real property, other than a personal residence, in this state within two years after the sale. (d) No gain shall be recognized with respect to a sale of a majority or more of units converted to condominium interests to the existing lower income or very low income residents of that property, provided that all of the proceeds from the sale are reinvested in residential real property, other than a personal residence, in this state within two years after the sale. (e) For purposes of this section: (1) “Assisted housing development” means a multifamily rental housing development that receives federal government assistance, appearing of record and containing a legal description of the property, as defined in subdivision (a) of Section 65863.10 of the Government Code. (2) “Tenant association” means a group of tenants who have formed a nonprofit corporation, cooperative corporation, or other entity or organization; or a local nonprofit, regional, or national organization whose purpose includes the acquisition of an assisted housing development, real property, or condominium and which represents the interests of at least a majority of the tenants in the assisted housing development, real property, or condominium. (3) “Nonprofit organization” means a not-for-profit corporation organized pursuant to Division 2 (commencing with Section 5000) of Title 1 of the Corporations Code, which has as its principal purpose the ownership, development, or management of housing or community development projects for persons and families of lower income and very low income, and which has a broadly representative board, a majority of whose members are community-based and has a proven track record of community service. (4) “Public agency” means a housing authority, redevelopment agency, or any other agency of a city, county, or city and county, whether general law or chartered, which is authorized to own, develop, or manage housing or community development projects for persons and families of lower income and very low income. (5) “Regional or national organization” means a not-for-profit, charitable corporation organized on a multicounty, state, or multistate basis which has as its principal purpose the ownership, development, or management of housing or community development projects for persons and families of lower income and very low income. (6) “Regional or national agency” means a multicounty, state, or multistate agency which is authorized to own, develop, or manage housing or community development projects for persons and families of lower income and very low income. (7) “Profit-motivated organization or individual” means an individual or two or more persons organized pursuant to Division 1 (commencing with Section 100) of Title 1 of, Division 3 (commencing with Section 1200) of Title 1 of, or Division 1 (commencing with Section 15001) of Title 2 of, the Corporations Code, which carries on as a business for profit. (8) “Lower income” means those residents having an income as defined by Section 50079.5 of the Health and Safety Code. (9) “Very low income” means those residents having an income as defined by Section 50105 of the Health and Safety Code. (10) “Resident” means a tenant or other person who lawfully occupies a unit located in a qualified low-income housing project as defined under Section 17058, and whose income qualifies as lower income or very low income. (11) “Condominium” means the interest in real property defined in Section 783 of the Civil Code. (f) If the purchase of residential real property results in the nonrecognition of gain on the sale of an assisted housing development, real property, or condominium under subdivision (a), (b), (c), or (d), in determining the adjusted basis of the purchased residential real property as of any time following the sale of the assisted housing development, real property, or condominium, the adjustments to the basis shall include a reduction by an amount equal to the amount of the gain not so recognized on the sale of the assisted housing development, real property, or condominium. If more than one parcel of residential real property has been purchased, the nonrecognized gain from the sale of the assisted housing development, real property, or condominium shall be attributed to the parcels of residential real property on a pro rata basis based upon the purchase prices of those parcels. (g) In accordance with subdivision (a), (b), (c), or (d), if the sale of an assisted housing development, real property, or condominium results in a gain during the taxable year, then all of the following shall apply: (1) The statutory period for the assessment of any deficiency attributable to any part of the gain shall not expire before the expiration of four years from the date the Franchise Tax Board is notified (on the form as the Franchise Tax Board may provide) of one of the following: (A) The cost of purchasing the residential real property which satisfies the requirement of subdivision (a), (b), (c), or (d), and results in the nonrecognition of gain. (B) The intention not to reinvest all of the proceeds from the sale in residential real property within the period specified in subdivision (a), (b), (c), or (d). (C) The failure to reinvest all of the proceeds from the sale in residential real property within the period specified in subdivision (a), (b), (c), or (d). (2) The deficiency may be assessed before the expiration of the period specified in paragraph (1), notwithstanding the provisions of any other law or rule of law which would otherwise prevent the assessment. (3) All information regarding the sale of an assisted housing development, real property, or condominium, at a gain in accordance with subdivision (a), (b), (c), or (d), shall be disclosed in the return for the taxable year in which the sale took place in order to determine if the sale qualifies and the amount of nonrecognition of gain qualifies under subdivision (a), (b), (c), or (d). (h) The Department of Housing and Community Development shall do all of the following: (1) Certify that the lower income or very low income resident meets the definitions provided in paragraphs (8) and (9) of subdivision (e). (2) Provide an annual listing to the Franchise Tax Board, in a form and manner agreed upon by the Franchise Tax Board and the Department of Housing and Community Development, of the names and identification numbers of the persons who are members of the group of purchasers who are lower income or very low income residents that were issued a certification, and the names and identification numbers of the sellers of the property. (3) Provide the group of purchasers who are lower income or very low income residents a copy of the certification. (i) The group of purchasers who are lower income or very low income residents shall do all of the following: (1) Provide the Department of Housing and Community Development with documents, as deemed necessary by the department, verifying the income of each member of the group. (2) Provide a copy of the certification to the seller of the assisted housing development, real property, or condominium. (3) Retain a copy of the certification. (j) The seller of the assisted housing development, real property, or condominium shall do all of the following: (1) Obtain a copy of the certification from the group of purchasers who are lower income or very low income residents of the assisted housing development, real property, or condominium. (2) Retain a copy of the group’s lower income or very low income certification for tax purposes. (Added by Stats. 1990, Ch. 1436, Sec. 3. Effective September 30, 1990.)
  154. 18042.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    This section adopts and modifies Internal Revenue Code Section 1042 for certain taxable years, including a change from “domestic corporation” to “domestic C corporation” for 1998–2027, and excludes IRC 1042(g).

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18042. (a) Section 1042 of the Internal Revenue Code, relating to sales of stock to employee stock ownership plans or certain cooperatives, shall apply to taxable years beginning on or after January 1, 1995. (b) For taxable years beginning on or after January 1, 1998, and before January 1, 2028, Section 1042 of the Internal Revenue Code, relating to sales of stock to employee stock ownership plans or certain cooperatives, is modified to provide that the term “domestic corporation” shall instead mean “domestic C corporation.” (c) For taxable years beginning on or after January 1, 2028, Section 1042(h) of the Internal Revenue Code, relating to application of section to sale of stock in S corporation, shall apply. (d) Section 1042(g) of the Internal Revenue Code, relating to application of section to sales of stock in agricultural refiners and processors to eligible farm cooperatives, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 60. (SB 711) Effective October 1, 2025. Applicable from January 1, 1995, as prescribed by Sec. 106 of Stats. 1998, Ch. 322.)
  155. 18044.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    Section 1044 rollover treatment does not apply for a taxable year, or part of a year, when the related federal income tax provisions are not applicable.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18044. The provisions of Section 1044 of the Internal Revenue Code, relating to rollover of publicly traded securities gain into specialized small business investment companies, shall not apply to any taxable year (or portion thereof) that those provisions (or similar provisions) are not applicable for federal income tax purposes. (Added by Stats. 1997, Ch. 611, Sec. 47. Effective October 3, 1997.)
  156. 18045.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. )

    Verify source ↗

    Section 1061 of the Internal Revenue Code does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 13. Gain or Loss on Disposition of Property [18031 - 18045] ( Chapter 13 repealed and added by Stats. 1983, Ch. 488, Sec. 63. ) ## 18045. Section 1061 of the Internal Revenue Code, relating to partnership interests held in connection with performance of services, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 61. (SB 711) Effective October 1, 2025.)
  157. 181.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. )

    Verify source ↗

    This section defines key terms used in the disaster relief chapter, including what counts as an eligible county, eligible property, and a property tax deferral claim.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. ) ## 181. As used in this chapter: (a) “Eligible county” means a county which meets both of the following requirements: (1) Has been proclaimed by the Governor to be in a state of disaster as a result of storms and floods occurring during February 1986. (2) Has adopted an ordinance providing for property reassessment pursuant to Section 170. (b) “Eligible property” means real property and any manufactured home which has received the homeowners’ exemption or is eligible for the homeowners’ exemption as of March 1, 1986, and which is located in an eligible county. (c) “Property tax deferral claim” means a claim filed by the owner of eligible property in conjunction with or in addition to the filing of an application for reassessment of that property pursuant to Section 170, which enables the owner to defer payment of the April 10, 1986, installment of taxes on property on the regular secured roll for the 1985–86 fiscal year, as provided in Section 185. (Amended by Stats. 2002, Ch. 775, Sec. 11. Effective January 1, 2003.)
  158. 1815.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1. Generally [1815 - 1817] ( Article 1 repealed and added by Stats. 1982, Ch. 327, Sec. 146. )

    Verify source ↗

    When valuing property, the board must follow Section 402.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1. Generally [1815 - 1817] ( Article 1 repealed and added by Stats. 1982, Ch. 327, Sec. 146. ) ## 1815. When valuing property, the board shall follow the provisions set forth in Section 402.5. (Repealed and added by Stats. 1982, Ch. 327, Sec. 146. Effective June 30, 1982.)
  159. 18151.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code applies to capital gains and losses, unless another provision says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18151. Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to capital gains and losses, shall apply, except as otherwise provided. (Amended by Stats. 1993, Ch. 873, Sec. 29. Effective October 6, 1993.)
  160. 18151.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    Section 301 of the federal Emergency Economic Stabilization Act of 2008 does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18151.5. Section 301 of Title III of Division A of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), relating to gain or loss from sale of certain preferred stock, shall not apply. (Added by Stats. 2010, Ch. 14, Sec. 38. (SB 401) Effective January 1, 2011.)
  161. 18151.9.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    The listed federal tax amendments relating to certain self-created property not treated as a capital asset do not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18151.9. The amendments made to Sections 1221(a)(3) and 1231(b)(1)(C) of the Internal Revenue Code by Section 13314 of Public Law 115-97, relating to certain self-created property not treated as a capital asset, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 62. (SB 711) Effective October 1, 2025.)
  162. 18152.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    Section 1202’s 50-percent exclusion for gain from certain small business stock does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18152. Section 1202 of the Internal Revenue Code, relating to 50-percent exclusion for gain from certain small business stock, does not apply. (Amended by Stats. 2018, Ch. 92, Sec. 197. (SB 1289) Effective January 1, 2019.)
  163. 18154.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    For this part, the San Bruno natural gas transmission line explosion is treated as a federally declared disaster under Section 1033 of the Internal Revenue Code.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18154. Notwithstanding any other law, for purposes of this part, the natural gas transmission line explosion on September 9, 2010, in San Bruno, California, shall be treated as a federally declared disaster within the meaning of Section 1033 of the Internal Revenue Code. (Added by Stats. 2011, Ch. 18, Sec. 3. (AB 50) Effective April 7, 2011.)
  164. 18155.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    A deduction is not allowed for capital loss carrybacks under Internal Revenue Code Section 1212.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18155. A deduction shall not be allowed for capital loss carrybacks provided by Section 1212 of the Internal Revenue Code, relating to capital loss carrybacks and carryovers. (Amended by Stats. 2015, Ch. 359, Sec. 18. (AB 154) Effective September 30, 2015. Applicable to taxable years beginning on or after January 1, 2015, as provided in Sec. 41 of Stats. 2015, Ch. 359.)
  165. 18155.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    This section changes the holding-period rule so that, in the specified nonrecognition situation, the taxpayer also counts the period that the other property was already held.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18155.5. Section 1223 of the Internal Revenue Code, relating to holding period of property, is modified to additionally provide that in determining the period for which the taxpayer has held property the acquisition of which resulted under Section 18038.5 in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which that other property has been held as of the date of the sale. (Amended by Stats. 2003, Ch. 185, Sec. 24. Effective January 1, 2004.)
  166. 18155.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    For taxable years starting on or after January 1, 2010, certain Internal Revenue Code cross-references in this part must be read as different section numbers.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18155.6. For taxable years beginning on or after January 1, 2010, specific reference to Sections 1223(4) to (16), inclusive, of the Internal Revenue Code in this part shall instead be treated as a reference to Sections 1223(3) to (15), inclusive, of the Internal Revenue Code, respectively. (Added by Stats. 2010, Ch. 14, Sec. 39. (SB 401) Effective January 1, 2011.)
  167. 1816.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1. Generally [1815 - 1817] ( Article 1 repealed and added by Stats. 1982, Ch. 327, Sec. 146. )

    Verify source ↗

    When valuing non-state-assessed property, the board must use the same valuation considerations and methods that apply to assessors under the code.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1. Generally [1815 - 1817] ( Article 1 repealed and added by Stats. 1982, Ch. 327, Sec. 146. ) ## 1816. When valuing property other than “state-assessed property” as defined in Section 108, the board shall be subject to the same valuation considerations and methods applicable to assessors as provided by this code. (Repealed and added by Stats. 1982, Ch. 327, Sec. 146. Effective June 30, 1982.)
  168. 18165.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

    Verify source ↗

    This section changes how two Internal Revenue Code provisions apply: one expands a reference in Section 1245(a)(2)(C), and the other makes Section 1245(b)(8) apply to property dispositions on or after January 1, 2010.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18165. (a) Section 1245(a)(2)(C) of the Internal Revenue Code, relating to certain deductions treated as amortization, is modified to also refer to Sections 17252.5, 17265, and 17266. (b) Section 1245(b)(8) of the Internal Revenue Code, relating to disposition of amortizable Section 197 intangibles, shall apply to dispositions of property on or after January 1, 2010. (Amended by Stats. 2010, Ch. 14, Sec. 40. (SB 401) Effective January 1, 2011.)
  169. 1817.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1. Generally [1815 - 1817] ( Article 1 repealed and added by Stats. 1982, Ch. 327, Sec. 146. )

    Verify source ↗

    The board must annually determine and publish statewide and county-by-county assessment ratios for locally assessed commercial and industrial real property in California.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1. Generally [1815 - 1817] ( Article 1 repealed and added by Stats. 1982, Ch. 327, Sec. 146. ) ## 1817. Commencing with the 1987–88 fiscal year and annually thereafter, the board shall determine the statewide and county-by-county ratio of assessed value to fair market value of locally assessed commercial and industrial real property in California. The board shall publish these ratios. The board shall determine these ratios by sales-assessment ratio studies of commercial and industrial property which has been transferred, which may be supplemented by board appraisals and by review of the amount of new construction added to the assessment rolls each year. The board shall conduct ratio studies in accordance with statistical principles applicable to those studies. For this purpose, the board and its duly authorized representatives shall have access to all records, public or otherwise, of any county assessor, and further, the board shall prescribe by rules the information which shall be necessary to be developed by the county assessors to enable the board to perform sales-assessment ratio studies and the format in which the data or information shall be transmitted by the county assessors to the board. (Added by Stats. 1986, Ch. 1457, Sec. 22.)
  170. 18171.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

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    This section changes how certain depreciation terms are calculated for capital gains and losses.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18171. Section 1250(b) of the Internal Revenue Code, relating to additional depreciation, is modified as follows: (a) “Depreciation adjustments,” as defined in Section 1250(b)(3) of the Internal Revenue Code, do not include the following: (1) For taxable years beginning on or after January 1, 1983, amortization under Section 17251 or under Section 188 of the Internal Revenue Code. (2) For taxable years beginning prior to January 1, 1983, amortization under former Section 17226, relating to pollution control facilities, or former Section 17227, relating to trademarks. (b) “Additional depreciation,” as defined in Section 1250(b)(4) of the Internal Revenue Code, includes the following: (1) For taxable years beginning on or after January 1, 1983, amortization under Section 167(k) of the Internal Revenue Code. (2) For taxable years beginning before January 1, 1983, amortization under former Section 17211.7, relating to low-income rental housing, or former Section 17228.5, relating to certified historic structures. (Amended by Stats. 2003, Ch. 185, Sec. 25. Effective January 1, 2004.)
  171. 18171.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

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    This section modifies Section 1250(a) of the Internal Revenue Code by replacing several date references.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18171.5. Section 1250(a) of the Internal Revenue Code is modified as follows: (a) The date “December 31, 1970” is substituted for “July 24, 1969,” and “December 31, 1969.” (b) The date “January 1, 1971” is substituted for “January 1, 1970.” (c) The date “December 31, 1976” is substituted for “December 31, 1975.” (d) The date “January 1, 1977” is substituted for “January 1, 1976.” (Amended by Stats. 2003, Ch. 185, Sec. 26. Effective January 1, 2004.)
  172. 18177.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

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    This section says the federal code definition does not apply here; instead, a “tax-exempt obligation” means an obligation whose interest is exempt from tax under this part.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18177. Section 1275(a)(3) of the Internal Revenue Code, relating to the definition of tax-exempt obligations, does not apply but instead the term “tax-exempt obligation” means an obligation the interest on which is exempt from tax under this part. (Amended by Stats. 2003, Ch. 185, Sec. 27. Effective January 1, 2004.)
  173. 18178.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

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    This section changes how certain debt-obligation income is treated for California income tax purposes, tying some amounts to the federal return and setting transition rules for older obligations and later amendments.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18178. Section 1272 of the Internal Revenue Code shall be modified as follows: (a) For taxable years beginning on or after January 1, 1987, and before the taxable year in which the debt obligation matures or is sold, exchanged, or otherwise disposed, the amount included in gross income under this part shall be the same as the amount included in gross income on the federal tax return. (b) The difference between the amount included in gross income on the federal return and the amount included in gross income under this part, with respect to obligations issued after December 31, 1984, for taxable years beginning before January 1, 1987, shall be included in gross income in the taxable year in which the debt obligation matures or is sold, exchanged, or otherwise disposed. (c) Section 1004(b) of the Taxpayer Relief Act of 1997 (P.L. 105-34), relating to the effective date for determination of original issue discount where pooled debt obligations are subject to acceleration, is modified to provide that the changes to Section 1272(a)(6) of the Internal Revenue Code made by the act adding this subdivision shall apply to taxable years beginning on or after January 1, 1998, and the amount taken into account under Section 481 of the Internal Revenue Code shall be taken into account ratably over the four-taxable-year period beginning with the first taxable year beginning on or after January 1, 1998. (Amended by Stats. 1998, Ch. 322, Sec. 42. Effective August 20, 1998.)
  174. 18180.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

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    This section says IRC Section 7872 applies, unless another rule here says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18180. (a) Section 7872 of the Internal Revenue Code, relating to treatment of loans with below market interest rates, shall apply, except as otherwise provided. (b) Section 7872(h) of the Internal Revenue Code, relating to exception for loans to qualified continuing care facilities, shall apply to calendar years beginning on or after January 1, 2010, with respect to loans made before, on, or after that date. (Amended by Stats. 2010, Ch. 14, Sec. 41. (SB 401) Effective January 1, 2011.)
  175. 18181.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

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    This section says Part VI of Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181] ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. ) ## 18181. Part VI of Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to treatment of certain passive foreign investment companies, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 40.5. Effective October 7, 2005.)
  176. 182.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. )

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    An eligible county’s tax collector must certify specified delinquent property-tax amounts and delinquency rates to the Director of Finance by May 31, 1986.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. ) ## 182. On or before May 31, 1986, the tax collector of an eligible county shall certify to the Director of Finance the total amount of the second installment of property taxes on the regular secured roll for the 1985–86 fiscal year which are not paid by 5 p.m. on April 10, 1986, and which are delinquent, less the total amount of payments of that second installment received between April 10, 1986, and the date of the tax collector’s certification, and the delinquency percentage rate for property taxes on the regular secured roll for the 1982–83, 1983–84, and 1984–85 fiscal years. (Amended by Stats. 1986, Ch. 1110, Sec. 3. Effective September 24, 1986.)
  177. 182.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. )

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    If an eligible county has adopted an ordinance under Section 191, the tax collector must certify certain supplemental roll property tax deferral claim totals to the Director of Finance by May 1, 1986.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. ) ## 182.5. If an eligible county has adopted an ordinance in accordance with Section 191, the tax collector shall certify to the Director of Finance on or before May 1, 1986, the total amount of supplemental roll property tax deferral claims submitted pursuant to Section 191 to the county by 5 p.m. on April 10, 1986. (Added by Stats. 1986, Ch. 16, Sec. 3. Effective March 11, 1986.)
  178. 183.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. )

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    After a certified Section 182 submission from an eligible county’s tax collector, the Director of Finance must calculate a county payment amount, certify it to the Controller, and the Controller must allocate it within 10 working days.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. ) ## 183. If the tax collector of an eligible county has certified to the Director of Finance the information specified in Section 182, the Director of Finance shall determine an amount for payment to the county which is equal to the amount of the second installment of property taxes on the regular secured roll for the 1985–86 fiscal year which is not paid by 5 p.m. on April 10, 1986, less a percentage of that amount which is equal to the average delinquency rate for property taxes on the regular secured roll for the immediately preceding three fiscal years. The Director of Finance shall certify the amount so determined to the Controller for allocation to the county. Upon receipt of certification by the Director of Finance, the Controller shall make the appropriate allocation to the county within 10 working days thereafter. (Added by Stats. 1986, Ch. 16, Sec. 3. Effective March 11, 1986.)
  179. 184.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. )

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    If an eligible county’s tax collector certifies the Section 182.5 information to the Director of Finance, the Director of Finance must certify the amount to the Controller, and the Controller must allocate it to the county within 10 working days.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. ) ## 184. If the tax collector of an eligible county has certified to the Director of Finance the information specified in Section 182.5, the Director of Finance shall certify this amount to the Controller for allocation to the county. Upon receipt of certification by the Director of Finance, the Controller shall make the appropriate allocation to the county within 10 working days thereafter. (Added by Stats. 1986, Ch. 16, Sec. 3. Effective March 11, 1986.)
  180. 1840.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1.5. Review of Assessment of Publicly Owned Property [1840 - 1841] ( Article 1.5 added by Stats. 1971, Ch. 1633. )

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    Certain local governments must apply in writing by November 30, or within 60 days after the tax bill is mailed for out-of-period assessments, and must provide supporting facts and a copy to the assessor.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1.5. Review of Assessment of Publicly Owned Property [1840 - 1841] ( Article 1.5 added by Stats. 1971, Ch. 1633. ) ## 1840. If any county, city and county, or municipal corporation desires to secure a review, equalization, or adjustment of the assessment of its property by the board pursuant to subdivision (g) of Section 11 of Article XIII of the California Constitution, it shall apply to the board for that review, equalization, or adjustment in writing on or before November 30. If the assessment objected to is one made outside the regular period for those assessments, the application for review shall be filed with the board within 60 days from the date the tax bill is mailed to the assessee. Every application shall show the facts claimed to require action of the board, and a copy of the application shall be filed with the assessor whose assessment is questioned. Upon receipt of a timely application, the board shall afford the applicant notice and a hearing in accordance with any rules and regulations as the board may prescribe. The failure to file a timely application shall bar the applicant from relief under subdivision (g) of Section 11 of Article XIII or this section. (Amended by Stats. 2016, Ch. 116, Sec. 2. (SB 1480) Effective January 1, 2017.)
  181. 18401.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    This section says every provision in this part applies to Part 10 and Part 11 unless another rule says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18401. Each provision of this part shall apply to Part 10 (commencing with Section 17001) and Part 11 (commencing with Section 23001), unless otherwise provided. (Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  182. 18402.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    This section says certain general tax-code definitions apply here, and it defines “person” broadly for this part.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18402. (a) Except where the context otherwise requires, the general provisions and definitions provided in Chapter 1 (commencing with Section 17001) of Part 10 and in Chapter 1 (commencing with Section 23001) of Part 11 shall apply to this part. (b) For purposes of this part, “person” includes an individual, fiduciary, partnership, limited liability company, corporation, or organization exempt from taxation under Section 23701. (c) (1) Whenever provisions of this part are applied in connection with Part 10 (commencing with Section 17001), the terms “taxpayer,” “corporation” and “taxable year” have the same meaning as defined in Chapter 1 (commencing with Section 17001) of Part 10. (2) Whenever provisions of this part are applied in connection with Part 11 (commencing with Section 23001), the terms “taxpayer,” “corporation,” “income year,” and “taxable year” have the same meaning as defined in Article 2 (commencing with Section 23030) of Chapter 1 of Part 11. (Amended by Stats. 1997, Ch. 605, Sec. 7. Effective January 1, 1998.)
  183. 18403.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    For this part, certain returns and other documents required under Part 10 or Part 11 are treated as if they were required under this part.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18403. For purposes of this part, any return, declaration, report, statement, or other document required to be made or filed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) shall be deemed to have been required to be made or filed under this part. (Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  184. 18405.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    The Franchise Tax Board may grant limited relief for certain new tax provisions, mainly waiving penalties or perfecting elections, if specific timing and compliance conditions are met.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18405. (a) In the case of a new statutory provision in Part 7.5 (commencing with Section 13201), Part 10 (commencing with Section 17001), Part 10.2 (commencing with Section 18401), or Part 11 (commencing with Section 23001), or the addition of a new part, the Franchise Tax Board itself is authorized to grant relief as set forth in subdivision (b) from the requirements of the new statutory provision in a manner as provided in subdivision (c). (b) The relief provided in subdivision (a) may be granted only for the first taxable year for which the new statutory provision is operative and only when substantial unintentional noncompliance with the new provision has occurred by a class of affected taxpayers. The relief is limited to waiving penalties or perfecting elections and may be granted only to taxpayers who timely paid taxes and other required amounts shown on the return consistent with the election and who timely filed their return (with regard to extension). (c) The relief granted in this section shall, upon the recommendation of the Executive Officer of the Franchise Tax Board, be made by resolution of the Franchise Tax Board that sets forth the conditions, time, and manner as the Franchise Tax Board determines are necessary. The resolution shall be adopted only by an affirmative vote of each of the three members of the Franchise Tax Board. (d) For purposes of this section: (1) “New statutory provision” means a complete, newly established tax program, tax credit, exemption, deduction, exclusion, penalty, or reporting or payment requirement and does not mean amendments made to existing tax provisions that make minor modifications or technical changes. (2) “Perfecting elections” includes correcting omissions or errors only when substantial evidence is present with the filed return that the taxpayer intended to make the election and does not include making an election where one was not previously attempted to be made. (3) “Substantial unintentional noncompliance,” for purposes of Part 11 (commencing with Section 23001), includes any case in which the taxpayer filed a water’s-edge contract with a timely filed original return and timely paid all taxes and other required amounts shown on the return consistent with the water’s-edge election, but where the taxpayer’s election is or might be invalidated by reason of the act or omission of an affiliated corporation that is not the parent or a subsidiary of the taxpayer. In that case, notwithstanding anything to the contrary in this section, relief shall be deemed granted to validate the taxpayer’s water’s-edge election, conditioned only upon an agreement by the affiliated corporation to either (A) file a water’s-edge contract and pay all taxes and other required amounts consistent with that election, or (B) waive any right, with respect to any taxable year for which the corporation did not make a water’s-edge election on its own timely filed return, to determine its income derived from or attributable to sources within this state pursuant to that election, whichever measure produces the greater amount of tax. (e) This section shall apply to any Franchise Tax Board resolution adopted after the effective date of this section with respect to any taxable year that is subject to an open statute of limitations on the date of the resolution. (Amended by Stats. 2004, Ch. 193, Sec. 185. Effective January 1, 2005.)
  185. 18405.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    The Franchise Tax Board may, in its discretion, let certain elections be perfected during the limitations period.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18405.1. (a) Notwithstanding Section 18405, the Franchise Tax Board may, in its discretion, permit elections made under Section 25111 to be perfected during the period of limitations prescribed under Sections 19057 and 19306 for the applicable taxable year. The statute of limitations of all taxpayers in a water’s-edge group whose taxable year falls, in whole or in part, within the period of the election shall remain open to receive adjustments, under claim or deficiency, consistent with that perfection of the election. (b) Subdivision (a) does not apply to the 1988 taxable year of any taxpayer whose water’s-edge election has been perfected pursuant to Section 18405. (Added by Stats. 2003, Ch. 633, Sec. 5. Effective September 30, 2003.)
  186. 18406.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    Employee classification for this part is generally controlled by Labor Code Article 1.5, unless another rule in this part says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18406. For the purposes of this part, except as otherwise provided, the determination of whether an individual is an employee shall be governed by Article 1.5 (commencing with Section 2775) of Chapter 2 of Division 3 of the Labor Code. (Added by Stats. 2020, Ch. 38, Sec. 4. (AB 2257) Effective September 4, 2020.)
  187. 18407.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    California adopts Section 6011 reporting rules for taxpayers liable for certain state taxes, with modifications, and requires the Franchise Tax Board to identify, publish, and publicize listed transactions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18407. Section 6011 of the Internal Revenue Code, relating to general requirement of return, statement, or list, shall apply, except as otherwise provided. (a) Section 6011(a) of the Internal Revenue Code, relating to general rule, is modified as follows: (1) The phrase “any person liable for any tax imposed by Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part,” shall be substituted for the phrase “when required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title,” contained therein. (2) “Secretary of the Treasury under Section 6011 of the Internal Revenue Code for federal income tax purposes or by the Franchise Tax Board” shall be substituted for “Secretary.” (3) To additionally provide that “reportable transaction” includes any transaction of a type that the Secretary of the Treasury under Section 6011 of the Internal Revenue Code for federal income tax purposes or the Franchise Tax Board under this section for California income or franchise tax purposes determines as having a potential for tax avoidance or evasion including deductions, basis, credits, entity classification, dividend elimination, or omission of income, and shall be reported on the return or the statement required to be made. (4) To additionally provide that “listed transaction” includes any transaction that is the same as, or substantially similar to, a transaction specifically identified by the Secretary of the Treasury under Section 6011 of the Internal Revenue Code for federal income tax purposes or by the Franchise Tax Board under this section for California income or franchise tax purposes, as a tax avoidance transaction including deductions, basis, credits, entity classification, dividend elimination, or omission of income and shall be reported on the return or statement required to be made. (A) The Franchise Tax Board shall identify and publish “listed transactions” (whether identified by the Secretary of the Treasury under Section 6011 of the Internal Revenue Code for federal income tax purposes or by the Franchise Tax Board) through the use of Franchise Tax Board Notices or other published positions. In addition, the “listed transactions” identified and published pursuant to the preceding sentence shall be published on the Web site of the Franchise Tax Board. (B) The Franchise Tax Board shall conduct a public outreach program to make taxpayers aware of the new and increased penalties associated with the use of tax avoidance transactions including deductions, basis, credits, entity classification, dividend elimination, or omission of income. (5) 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 standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to paragraph (4). (b) Section 6011(b) of the Internal Revenue Code, relating to identification of taxpayer, does not apply and, in lieu thereof, Section 18408 shall apply. (c) Section 6011(c) of the Internal Revenue Code, relating to returns, etc., of DISCs and former DISCs and FSCs and former FSCs, does not apply. (d) Section 6011(d) of the Internal Revenue Code, relating to authority to require information concerning Section 912 allowances, does not apply. (e) Section 6011(e) of the Internal Revenue Code, relating to regulations requiring returns on magnetic media, etc., shall take into account Section 18408 and shall also include the modifications made to Section 6011(e) of the Internal Revenue Code by Section 18408. (f) Section 6011(f)(2) of the Internal Revenue Code, relating to incentives, does not apply. (Amended (as added by Stats. 2003, Ch. 656) by Stats. 2004, Ch. 183, Sec. 327. Effective January 1, 2005.)
  188. 18408.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    The Franchise Tax Board may require information needed to properly identify persons subject to the specified withholding taxes.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18408. The Franchise Tax Board is authorized to require that information with respect to persons subject to the taxes imposed by Article 5 (commencing with Section 18661) of Chapter 2 (relating to tax withheld at source) as is necessary or helpful in securing proper identification of those persons. (Added by renumbering Section 18552 by Stats. 2000, Ch. 863, Sec. 11. Effective January 1, 2001.)
  189. 18409.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    The Franchise Tax Board must issue regulations for which returns can be filed on magnetic media or other machine-readable form, and it may not require certain estate and trust returns to be filed other than on paper forms it supplies.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18409. (a) The Franchise Tax Board shall prescribe regulations providing standards for determining which returns shall be filed on magnetic media or in other machine-readable form. The Franchise Tax Board may not require returns of any tax imposed by Part 10 (commencing with Section 17001) on estates and trusts to be other than on paper forms supplied by the Franchise Tax Board. In prescribing those regulations, the Franchise Tax Board shall take into account, among other relevant factors, the ability of the taxpayer to comply at a reasonable cost with that filing requirement. (b) (1) Subdivision (a) is applicable only to taxpayers required to file returns on magnetic media or in other machine-readable form pursuant to Section 6011(e) of the Internal Revenue Code, relating to regulations requiring returns on magnetic media, and the regulations adopted thereto. (2) In addition, the regulations under subdivision (a) shall not require that returns filed on magnetic media or in other machine-readable form contain more information than is required to be included in similar returns filed with the Internal Revenue Service under Section 6011(e) of the Internal Revenue Code and the regulations adopted thereto. (c) In lieu of the magnetic media or other machine-readable form returns required by this section, a copy of the similar magnetic media or other machine-readable form returns filed with the Internal Revenue Service pursuant to Section 6011(e) of the Internal Revenue Code, and the regulations adopted thereto, may be filed with the Franchise Tax Board. (Amended by Stats. 2025, Ch. 231, Sec. 63. (SB 711) Effective October 1, 2025.)
  190. 1841.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1.5. Review of Assessment of Publicly Owned Property [1840 - 1841] ( Article 1.5 added by Stats. 1971, Ch. 1633. )

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    After review, equalization, and adjustment are completed, the executive director must send notice of the board’s action to the auditor, the taxing agency’s governing body, and the applicant. After receiving the notice, the auditor must enter any resulting assessment change on the local roll.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2. Equalization by State Board of Equalization [1815 - 1841] ( Chapter 2 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 1.5. Review of Assessment of Publicly Owned Property [1840 - 1841] ( Article 1.5 added by Stats. 1971, Ch. 1633. ) ## 1841. When the review, equalization, and adjustment are completed, the executive director of the board shall transmit to the auditor and the governing body of the taxing agency whose assessment is questioned, and to the applicant a notice of the action of the board with respect to the assessment. The notice is prima facie evidence of the regularity of all proceedings of the board resulting in the action that is the subject matter of the notice. Upon receipt of the notice the auditor shall enter upon the local roll any change in the assessment resulting from the action of the board. (Amended by Stats. 2003, Ch. 471, Sec. 18. Effective January 1, 2004.)
  191. 18410.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    For these tax law provisions, a “legal holiday” also includes a federal legal holiday recognized by the IRS under Internal Revenue Code Section 7503.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18410. For purposes of Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), and this part, a legal holiday includes a federal legal holiday recognized by the Internal Revenue Service under Section 7503 of the Internal Revenue Code. (Added by Stats. 2012, Ch. 313, Sec. 1. (AB 318) Effective January 1, 2013.)
  192. 18410.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. )

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    This section creates the California Competes Tax Credit Committee and gives it power to approve or reject certain tax credit or grant allocation decisions and recapture recommendations. It also requires the Governor’s Office of Business and Economic Development to provide needed information on request, except protected information.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 1. General Application [18401 - 18410.2] ( Article 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18410.2. (a) The California Competes Tax Credit Committee is hereby established. The committee shall consist of the Treasurer, the Director of Finance, and the Director of the Governor’s Office of Business and Economic Development, who shall serve as chair of the committee, or their designated representatives, and one appointee each by the Speaker of the Assembly and the Senate Committee on Rules. A Member of the Legislature shall not be appointed. (b) For purposes of Article 4.4 (commencing with Section 12096.6) of Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code and Sections 17059.2 and 23689, the California Competes Tax Credit Committee shall do all of the following: (1) Approve or reject any written agreement for a tax credit or grant allocation by resolution at a duly noticed public meeting held in accordance with the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code), but only after receipt of the fully executed written agreement between the taxpayer and the Governor’s Office of Business and Economic Development. (2) Approve or reject any recommendation to recapture, in whole or in part, a tax credit or grant allocation by resolution at a duly noticed public meeting held in accordance with the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code), but only after receipt of the recommendation from the Governor’s Office of Business and Economic Development pursuant to the terms of the fully executed written agreement. (c) For purposes of Article 4.4 (commencing with Section 12096.6) of Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code and Sections 17059.2 and 23689, the Governor’s Office of Business and Economic Development shall provide a member of the committee, or their designated representatives, listed in subdivision (a), upon request of that member, with any information necessary to fulfill their duties or otherwise comply with the requirements of this section. Nothing in this subdivision shall be construed to require the Governor’s Office of Business and Economic Development to provide information to the member or their designated representative that the applicant considers to be a trade secret, confidential, privileged, or otherwise exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (Amended by Stats. 2022, Ch. 28, Sec. 146. (SB 1380) Effective January 1, 2023.)
  193. 18412.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. )

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    Substantially similar provisions of this part must be treated as restatements and continuations of earlier law, not as new enactments.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18412. The provisions of this part insofar as they are substantially the same as statutory provisions relating to the same subject matter in Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), as those provisions, including applicable regulations, existed on December 31, 1993, shall be construed as restatements and continuations thereof, and not as new enactments. (Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  194. 18413.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. )

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    Repealing certain tax-law provisions does not disturb earlier acts, accrued rights, or proceedings started before the repeal.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18413. The repeal of any provision in Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) made by the act adding this section shall not affect any act done or any right accruing or accrued, or any suit, appeal, or other proceeding having commenced under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), before that repeal; but all rights and liabilities under that law shall continue, and may be enforced in the same manner, as if that repeal had not been made. (Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  195. 18414.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. )

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    If this part refers to a prior period, it should be read as referring to the corresponding provision in Part 10 or Part 11 for that period, when appropriate and consistent with the provision’s purpose.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18414. Any provision of this part that refers to the application of any portion of this part to a prior period (or which depends upon the application to a prior period of any portion of this part) shall, when appropriate and consistent with the purpose of that provision, be deemed to refer to (or depend upon the application of) the corresponding provision of Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) as was applicable to the prior period. (Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  196. 18415.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. )

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    This section sets when changes in an act apply to taxable years, with special timing rules for estimated tax and underpayment provisions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18415. Unless otherwise specifically provided therein, the provisions of any act: (a) That affect the imposition or computation of taxes, additions to tax other than Sections 19136 or 19142, penalties, or the allowance of credits against the tax, shall be applied to taxable years beginning on or after January 1 of the year in which the act takes effect. (b) That change the provisions of Sections 19023 to 19027, inclusive, (relating to payment of estimated tax) or Section 19136 or Sections 19142 to 19151, inclusive, (relating to underpayment of estimated tax) shall be applied to taxable years beginning on or after January 1 of the year immediately after the year in which the act takes effect. (c) That otherwise affect the provisions of this part shall be applied on and after the date the act takes effect. (Amended by Stats. 2000, Ch. 862, Sec. 4. Effective January 1, 2001.)
  197. 18416.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. )

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    Notices under this part may be sent by first-class mail, and a notice mailed to a taxpayer is sufficient if sent to the taxpayer’s last known address.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18416. (a) Unless expressly otherwise provided in this part, any notice may be given by first-class mail postage prepaid. (b) For purposes of this part, any notice mailed to a taxpayer shall be sufficient if mailed to the taxpayer’s last known address. (c) The last known address shall be the address that appears on the taxpayer’s last return filed with the Franchise Tax Board, unless the taxpayer has provided to the Franchise Tax Board clear and concise written or electronic notification of a different address, or the Franchise Tax Board has an address it has reason to believe is the most current address for the taxpayer. (Amended by Stats. 2007, Ch. 341, Sec. 2. Effective January 1, 2008.)
  198. 18416.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. )

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    The Franchise Tax Board may create a regulated alternative electronic communication process, but it must warn taxpayers or their representatives about the effects of choosing it and of not responding properly.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18416.5. (a) The Franchise Tax Board may, by regulation, implement an alternative communication method that would allow the Franchise Tax Board, at the request of the taxpayer or the taxpayer’s authorized representative, to provide notification to the taxpayer in a preferred electronic communication method designated by the taxpayer that a notice, statement, bill, or other communication required or authorized under Part 10 (commencing with Section 17001), this part, or Part 11 (commencing with Section 23001) is available for viewing in the taxpayer’s limited access secure folder on the Franchise Tax Board’s internet website and would allow the taxpayer or the taxpayer’s authorized representative to file a protest, notification, and other communication to the Franchise Tax Board in a secure manner. Prior to obtaining the consent of a taxpayer to participate in the alternative communication method authorized by this section, the Franchise Tax Board shall advise the taxpayer or the taxpayer’s authorized representative of the ramifications of electing to receive notifications from the Franchise Tax Board in the manner selected and of failing to take appropriate action in response to one or more of those notifications. (b) Sending electronic notification to a taxpayer or the taxpayer’s authorized representative pursuant to the taxpayer’s request made in accordance with regulations authorized under subdivision (a) shall not be considered a violation of Section 19542 or 19542.1. Any electronic notification provided to a taxpayer using the alternative communication method authorized by this section shall include plain language advising the taxpayer that a failure to act may cause the taxpayer to forego procedural or administrative rights to challenge the proposed action. (c) Notwithstanding any other law regarding the use of United States mail, any notice, statement, bill, protest, and other communication from the Franchise Tax Board to a taxpayer or the taxpayer’s authorized representative and from a taxpayer or the taxpayer’s authorized representative to the Franchise Tax Board pursuant to the alternative communication method authorized by this section shall be treated as if it were mailed by United States mail, postage prepaid. (Amended by Stats. 2024, Ch. 122, Sec. 1. (AB 3287) Effective January 1, 2025.)
  199. 18417.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. )

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    This section lists other laws and code provisions that are related to this part.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802] ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## CHAPTER 1. General Provisions [18401 - 18417] ( Chapter 1 added by Stats. 1993, Ch. 31, Sec. 26. ) ## ARTICLE 2. Continuity with Prior Law [18412 - 18417] ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. ) ## 18417. Provisions in other codes or general law statutes that are related to this part include all of the following: (a) Chapter 20.6 (commencing with Section 9891) of Division 3 of the Business and Professions Code, relating to tax preparers. (b) Sections 1502, 2204 to 2206, inclusive, 6210, 6810, 8210, and 8810 of the Corporations Code, relating to the corporation officer statement penalty. (c) Section 2104 of the Corporations Code, which prevents the application of any provision of this part against any foreign lending institution whose activities in this state are limited to those described in subdivision (d) of Section 191 of the Corporations Code. (d) Sections 15700 to 15702.1, inclusive, of the Government Code, relating to the Franchise Tax Board. (e) Part 10 (commencing with Section 17001) of this division, relating to the Personal Income Tax Law. (f) Part 10.5 (commencing with Section 20501) of this division, relating to the Senior Citizens Property Tax Assistance and Postponement Law. (g) Part 10.7 (commencing with Section 21001) of this division, relating to the Taxpayers’ Bill of Rights. (h) Part 11 (commencing with Section 23001) of this division, relating to the Corporation Tax Law. (Amended by Stats. 2001, Ch. 543, Sec. 7. Effective January 1, 2002.)
  200. 185.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. )

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    Eligible property owners with timely February 1986 flood- or storm-damage reassessment claims may ask the county assessor to defer certain 1985–86 property tax payments, with payment deferred until reassessment and a corrected bill are issued.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 4. Disaster Relief [181 - 191] ( Chapter 4 added by Stats. 1986, Ch. 16, Sec. 3. ) ## 185. (a) Any owner of eligible property who files on or before April 10, 1986, a claim for reassessment pursuant to the provisions of Section 170 based upon flood or storm damage occurring in February 1986 and amounting to ten thousand dollars ($10,000) or more under procedures set forth in subdivision (b) of Section 170, may apply to the county assessor to defer payment of the second installment of property taxes on the regular secured roll for the 1985–86 fiscal year with respect to that property which are due no later than April 10, 1986. If a timely claim is filed, the payment shall be deferred without penalty or interest until the assessor has reassessed the property and a corrected bill prepared pursuant to the provisions of Section 170 has been issued to the property owner. Taxes deferred pursuant to this section are due 30 days after the date the corrected tax bill is issued and if unpaid thereafter are delinquent as provided in Section 2610.5 and shall be subject to the penalty provided by law. (b) If, following reassessment pursuant to subdivision (a), the assessor determines that an owner who applied and was granted a deferral of property taxes did not file a claim in good faith, the owner shall be assessed a delinquency penalty for the nonpayment of the deferred taxes. (c) The provisions of this section do not apply to property taxes paid through impound accounts. (Amended by Stats. 1986, Ch. 1110, Sec. 4. Effective September 24, 1986.)

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