Corporation Tax Law: tax-exempt organizations: revocation of tax-exempt status.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Enrolled
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill changes how California tax-exempt organizations are treated when their federal tax-exempt status is suspended or revoked. Currently, state tax exemption is automatically suspended. This bill allows the Franchise Tax Board to retain the organization’s state tax exemption if the federal suspension or revocation isn’t due to fraud, misuse of funds, or other serious reporting issues. The changes take effect immediately.
Key provisions
- Allows the Franchise Tax Board to retain state tax-exempt status for organizations even if their federal exemption is suspended or revoked (unless due to fraud, misuse of funds, or reporting failures).
- Requires the Franchise Tax Board to consider the reason for the federal suspension or revocation when deciding whether to maintain state exemption.
- Specifies that the state exemption will not be automatically revoked if the federal suspension is not related to fraud, misuse of funds, or reporting issues.
- Addresses the process for organizations formed as California corporations that are listed as ‘suspended’ or ‘forfeited’ by the Secretary of State.
- Clarifies that retroactive determinations are permitted for organizations existing prior to 1970.
- Preserves the Franchise Tax Board’s authority to prescribe regulations and procedures.
- States that this act provides for a tax levy.
Who is affected
Bill text
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Sponsors
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1 on record
Primary sponsor
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