Personal Income Tax Law and Corporation Tax Law: federal conformity.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Passed
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed Assembly
- To Governor
- Became Law
Overview
This bill aims to align California’s tax laws with federal tax laws, specifically regarding personal income tax and corporate tax. It updates references to the Internal Revenue Code to reduce confusion and ensure consistency between state and federal tax systems. Notably, it removes restrictions on deducting business interest under federal law for California tax purposes, aligning the state’s rules with the federal standard. The bill also makes several technical amendments to existing sections of the Revenue and Taxation Code to reflect changes in federal law.
Key provisions
- Updates references to the Internal Revenue Code to align California tax laws with federal laws.
- Removes restrictions on deducting business interest under federal law for California tax purposes.
- Modifies provisions related to the Earned Income Tax Credit, adjusting percentages and amounts based on federal guidelines.
- Amends Section 17077 to clarify the deduction for net operating losses.
- Updates Section 17260 to align with federal rules regarding tertiary injectants.
- Modifies Section 17276 to adjust the carryforward of net operating losses.
- Clarifies the definition of ‘net tax’ for purposes of the Earned Income Tax Credit.
- Addresses specific provisions of the Internal Revenue Code related to depreciation and amortization.
Who is affected
- Taxpayers (individuals and corporations)
- The California Franchise Tax Board
Bill text
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Sponsors
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1 on record
Primary sponsor
Committee on Revenue and Taxation
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