Bill Text: CA AB2113 | 2009-2010 | Regular Session | Introduced
Bill Title: Local taxation: personal income taxes: vehicle license
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-04-07 - In committee: Set, first hearing. Hearing canceled at the request of author. [AB2113 Detail]
Download: California-2009-AB2113-Introduced.html
BILL NUMBER: AB 2113 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Evans
FEBRUARY 18, 2010
An act to amend Sections 17041.5 and 18663 of, to add Chapter 3.8
(commencing with Section 7295) to Part 1.7 of Division 2 of, and to
add Chapter 2.2 (commencing with Section 17065) to Part 10 of
Division 2 of, the Revenue and Taxation Code, and to amend Section
13020 of the Unemployment Insurance Code, relating to taxation, and
making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2113, as introduced, Evans. Local taxation: personal income
taxes: vehicle license fees.
(1) Existing law authorizes various local governmental entities to
impose local taxes for various purposes.
This bill would authorize the board of supervisors of any county
or city and county, by ordinance, to propose to the voters either a
local personal income tax or a local vehicle license fee, or both, in
accordance with specified requirements.
This bill would require the Department of Motor Vehicles to
administer the local vehicle license fee, and would require, prior to
the operative date of any ordinance imposing a local vehicle license
fee, the county or city and county to contract with the Department
of Motor Vehicles to perform this function. This bill would require
the county or city and county to reimburse the Department of Motor
Vehicles pursuant to the contract. This bill would require the
revenues derived from the local vehicle license fee to be deposited
in the State Treasury to the credit of the Local Vehicle License Fee
Account, which this bill would create. This bill would continuously
appropriate those moneys to the Controller for allocation to each
county and city and county in which the local vehicle license fee is
imposed.
This bill would allow the local vehicle license fee to be deducted
from the tax imposed under Personal Income Tax Law and the
Corporation Tax Law, and would require the county or city and county
to reimburse the General Fund for these losses, as provided.
This bill would require the Franchise Tax Board to administer the
local personal income tax, and would require, prior to the operative
date of any ordinance imposing a local personal income tax, the
county or city and county to contract with the Franchise Tax Board
and the Employment Development Department to perform their functions.
This bill would require the county or city and county to reimburse
the Franchise Tax Board and the Employment Development Department
pursuant to these contracts. This bill would require the Franchise
Tax Board to permit the county or city and county to examine personal
income tax records, as provided.
This bill would authorize the Franchise Tax Board to adopt
regulations necessary to administer the local personal income tax.
This bill would require the revenues derived from the local personal
income tax to be deposited in the State Treasury to the credit of the
Local Personal Income Tax Account, which this bill would create.
This bill would continuously appropriate those moneys to the
Controller for allocation to each county and city and county in which
the local personal income tax is imposed.
(2) Existing law requires the Franchise Tax Board to prepare wage
withholding tables to be used by employers for purposes of
withholding state personal income taxes on wages paid.
This bill would require the Franchise Tax Board to prepare wage
withholding tables to be used by employers for purposes of
withholding both state personal income taxes and local personal
income taxes on wages paid.
(3) Existing law requires an employer who pays wages to a resident
employee for services performed within or without this state to
withhold from those wages, except as provided, specified state
personal income taxes.
This bill would require an employer who pays wages to a resident
employee to withhold from those wages both state personal income
taxes and local personal income taxes.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 3.8 (commencing with Section 7295) is added to
Part 1.7 of Division 2 of the Revenue and Taxation Code, to read:
CHAPTER 3.8. COUNTY INCOME TAXES AND VEHICLE LICENSE FEES
7295. In addition to any other tax authority provided by law, the
board of supervisors of any county or city and county may, by
ordinance, place on the ballot either or both of the following for
consideration by the voters in accordance with all constitutional and
statutory requirements:
(a) A local personal income tax subject to the following
conditions:
(1) The local personal income tax shall be calculated as a
percentage of tax liability after reduction for personal exemption
credits shown on the state personal income tax return filed for a
taxable year by a resident of the county in which the local personal
income tax is imposed.
(2) The local personal income tax shall be assessed and collected
by the Franchise Tax Board in accordance with Chapter 2.2 (commencing
with Section 17065).
(b) (1) A local vehicle license fee on any vehicle, registered
within the county or city and county in which the local vehicle
license fee is imposed, that is subject to registration under the
Vehicle Code and on which a vehicle license fee is imposed pursuant
to Part 5 (commencing with Section 10701), shall be subject to the
following conditions:
(A) (i) If the election in which the local vehicle license fee
receives voter approval occurs between January 1 and June 30, the
local vehicle license fee shall be imposed on and after the first
January 1 that follows that election.
(ii) If the election in which the local vehicle license fee
receives voter approval occurs between July 1 and December 31, the
local vehicle license fee shall be imposed on and after the first
July 1 that follows that election.
(B) Each county and city and county shall only establish one
countywide local vehicle license fee rate.
(C) (i) The local vehicle license fee shall be allowed as a
deduction for the state personal income tax imposed under Part 10
(commencing with Section 17001) and the corporation tax imposed under
Part 11 (commencing with Section 23001) for the taxable year within
which the local vehicle license fee shall be paid or accrued.
(ii) The county or city and county shall fully reimburse the
General Fund from the revenues collected from the local vehicle
license fee for the revenue losses incurred pursuant to clause (i).
(D) (i) The Department of Motor Vehicles shall administer the
local vehicle license fee.
(ii) Prior to the operative date of any ordinance imposing a local
vehicle license fee, the county or city and county shall contract
with the Department of Motor Vehicles to perform all functions
incident to the administration of the local vehicle license fee.
(iii) The contract shall contain a provision that the county or
city and county shall reimburse the Department of Motor Vehicles for
all refunds, losses, and costs incurred in the administration and
operation of the local vehicle license fee.
(E) The local vehicle license fee shall be assessed and collected
in the same manner as the fee imposed by Part 5 (commencing with
Section 10701).
(2) (A) Amounts collected pursuant to this subdivision shall be
transmitted to the Treasurer and deposited in the State Treasury to
the credit of the Local Vehicle License Fee Account in the General
Fund, which is hereby created.
(B) Notwithstanding Section 13340 of the Government Code, the
moneys in the Local Vehicle License Fee Account are hereby
continuously appropriated, without regard to fiscal year, to the
Controller for allocation to each county and city and county in which
the local vehicle license fee is imposed.
7296. For the purposes of this chapter, "resident" means any
individual who lives or is located in a county or city and county on
more than a temporary or transient basis.
SEC. 2. Section 17041.5 of the Revenue and Taxation Code is
amended to read:
17041.5. Notwithstanding any statute, ordinance, regulation, rule
, or decision to the contrary, no city, county,
city and county, governmental subdivision, district, public
and quasi-public corporation, municipal corporation, whether
incorporated or not or whether chartered or not, shall levy or
collect or cause to be levied or collected any tax upon the income,
or any part thereof, of any person, resident or nonresident.
This section shall not be construed so as to prohibit the levy or
collection of any otherwise authorized license tax upon a business
measured by or according to gross receipts.
SEC. 3. Chapter 2.2 (commencing with Section 17065) is added to
Part 10 of Division 2 of the Revenue and Taxation Code, to read:
CHAPTER 2.2. LOCAL PERSONAL INCOME TAX
17065. (a) A local ordinance, authorized pursuant to Section
7295, imposing a local personal income tax shall become operative for
taxable years beginning on or after January 1 of the first calendar
year following approval by the voters of the county or city and
county, provided written notice of that approval is provided by the
county or city and county elections official no later than September
30 of the preceding calendar year.
(b) (1) Each county and city and county shall only establish one
countywide local personal income tax rate.
(2) For each taxable year for which a local personal income tax is
operative under subdivision (a), in addition to any other taxes
imposed by this part, an additional tax on the tax liability after
reduction for personal exemption credits of a county or city and
county resident shall be imposed at the rate approved by the voters
of that county or city and county.
(c) (1) The local personal income tax shall be based on an
individual's county or city and county of residence.
(2) A taxpayer shall specify the county or city and county,
counties, or counties and city and county of his or her residence for
the taxable year when filing a personal income tax return.
(3) If a taxpayer resides in more than one county or city and
county, the taxpayer shall pay a proportionate share of the local
personal income tax of each county or city and county. A
proportionate share shall be based on the percentage of time during
the taxable year that a taxpayer resides in each county or city and
county.
(d) For purposes of applying Part 10.2 (commencing with Section
18401) of Division 2, the tax imposed under this section shall be
treated as if it were imposed under Section 17041.
(e) No credit authorized under this part shall be applied to
reduce taxes imposed under this chapter.
(f) Amounts paid for the local personal income tax authorized by
Section 7295 and imposed in accordance with this chapter shall not be
allowed as a deduction under this part.
(g) A county or city and county shall not adopt by ordinance any
credit or deduction against the local personal income tax.
17065.1. Prior to the operative date of any ordinance imposing a
local personal income tax, the county or city and county shall do
both of the following:
(a) (1) Contract with the Franchise Tax Board to perform all
functions incident to its administration and operation of the local
personal income tax.
(2) The contract shall contain a provision that the county or city
and county shall reimburse the Franchise Tax Board for all refunds,
losses, and costs incurred in its administration and operation of the
local personal income tax.
(b) (1) Contract with the Employment Development Department to
perform all functions incident to its administration and operation of
the local personal income tax.
(2) The contract shall contain a provision that the county or city
and county shall reimburse the Employment Development Department for
all refunds, losses, and costs incurred in its administration and
operation of the local personal income tax.
17065.2. Any payments and credits shown on the return, together
with any other credits associated with that taxpayer's account, shall
be applied in the following order:
(a) Taxes imposed under Part 10 (commencing with Section 17001),
including penalties and interest, if any, imposed under this part.
(b) The local personal income tax authorized by Section 7295 and
imposed in accordance with this chapter.
17065.3. Any information, information sources, or enforcement
remedies and capabilities available to the county or city and county
shall be made available to the Franchise Tax Board to be used in
conjunction with, or independent of, the information, information
sources, or remedies and capabilities available to the Franchise Tax
Board for purposes of administering the local personal income tax.
17065.4. (a) When requested by resolution of the board of
supervisors of any county or city and county, the Franchise Tax Board
shall permit any duly authorized officer or employee of the county
or city and county, or other person designated by that resolution, to
examine all of the personal income tax records of the Franchise Tax
Board pertaining to the ascertainment of those local personal income
taxes to be collected for the county or city and county by the
Franchise Tax Board pursuant to contract entered into between the
Franchise Tax Board and the county or city and county under this
chapter. Except as otherwise provided herein, this subdivision shall
not be construed to allow any officer, employee, or other person
authorized or designated by a county or city and county to examine
any personal income tax records of any taxpayer. The costs that are
incurred by the Franchise Tax Board in complying with a request made
pursuant to this subdivision shall be deducted, pursuant to the
contract specified in subdivision (a) of Section 17065.1, by the
Franchise Tax Board from those revenues collected by the Franchise
Tax Board on behalf of the county or city and county making the
request.
(b) The resolution shall certify that any person designated by the
resolution, other than an officer or employee, meets all of the
following conditions:
(1) Has an existing contract with the county or city and county to
examine those personal income tax records.
(2) Is required by that contract to disclose information contained
in, or derived from, those personal income tax records only to an
officer or employee of the county or city and county who is
authorized by the resolution to examine the information.
(3) Is prohibited by that contract from retaining the information
contained in, or derived from, those personal income tax records,
after that contract has expired.
(c) Information obtained by examination of the Franchise Tax Board
records as permitted in this subdivision shall be used only for
purposes related to the collection of local personal income taxes by
the Franchise Tax Board pursuant to the contract, or for purposes
related to other governmental functions of the county or city and
county set forth in the resolution.
17065.5. The Franchise Tax Board may prescribe all rules and
regulations necessary and proper to administer this chapter.
17065.6. The adoption, amendment, or repeal of a regulation
authorized by Section 17065.5 is hereby exempted from the rulemaking
provisions of the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code).
17065.7. (a) Amounts collected pursuant to this section shall be
transmitted to the Treasurer and deposited in the State Treasury to
the credit of the Local Personal Income Tax Account in the General
Fund, which is hereby created.
(b) Notwithstanding Section 13340 of the Government Code, the
moneys in the Local Personal Income Tax Account are hereby
continuously appropriated, without regard to fiscal year, to the
Controller for allocation to each county and city and county in which
the local personal income tax is imposed.
17065.8. For the purposes of this chapter, "resident" means any
individual who lives or is located in a county or city and county on
more than a temporary or transient basis.
SEC. 4. Section 18663 of the Revenue and Taxation Code is amended
to read:
18663. (a) (1) The Franchise Tax Board shall annually (or more
often if necessary) prepare and make available to the Employment
Development Department, wage withholding tables that shall be used by
every employer making payment of any wages to a resident employee
for services performed either within or without this state; or to a
nonresident employee for services performed in this state, to deduct
and withhold from those wages for each payroll period, a tax computed
in a manner as to produce, so far as practicable, with due regard to
the credits for personal exemptions allowable under Section 17054, a
sum that is substantially equivalent to the amount of tax reasonably
estimated to be due under Part 10 (commencing with Section 17001)
or reasonably estimated to be due under a local ordinance
authorizing the imposition of a local personal income tax under
Chapter 2.2 (commencing with Section 17065) of Part 10
resulting from the inclusion in the gross income of the employee the
wages which were subject to withholding.
(2) For wages paid on or after November 1, 2009, wage withholding
tables prepared by the Franchise Tax Board pursuant to this
subdivision shall produce, so far as practicable, with due regard to
the credits for personal exemptions allowable under Section 17054, a
sum that will significantly prevent underwithholding by using an
amount equal to 10 percent more than the sum described in paragraph
(1).
(b) (1) (A) For supplemental wages paid on or after January 1,
1992, the rate of withholding that may be applied to supplemental
wages in lieu of the wage withholding tables specified in subdivision
(a) shall be 6 percent.
(B) For supplemental wages paid on or after November 1, 2009, the
rate of withholding shall be 6.6 percent.
(2) For purposes of this subdivision, "supplemental wages"
includes, but is not limited to, bonus payments, overtime payments,
commissions, sales awards, back pay including retroactive wage
increases, and reimbursements for nondeductible moving expenses that
are paid for the same or a different period, or without regard to a
particular period.
(c) (1) For stock options and bonus payments that constitute wages
paid on or after January 1, 2002, the rate of withholding that may
be applied to those stock options and bonus payments in lieu of the
wage withholding tables specified in subdivision (a) shall,
notwithstanding subdivision (b), be 9.3 percent.
(2) For stock options and bonus payments that constitute wages
paid on or after November 1, 2009, the rate of withholding shall be
10.23 percent.
SEC. 5. Section 13020 of the Unemployment Insurance Code is
amended to read:
13020. (a) (1) Every employer who pays wages to a resident
employee for services performed either within or without this state,
or to a nonresident employee for services performed in this state,
shall deduct and withhold from those wages, except as provided in
subdivision (c) and Sections 13025 and 13026, for each payroll
period, a tax computed in that manner as to produce, so far as
practicable, with due regard to the credits for personal exemptions
allowable under Section 17054 of the Revenue and Taxation Code, a sum
which is substantially equivalent to the amount of tax reasonably
estimated to be due under Part 10 (commencing with Section 17001)
or reasonably estimated to be due under a local ordinance
authorizing the imposition of a local personal income tax
under Chapter 2.2 (commencing with Section 17065) of Part 10 of
Division 2 of the Revenue and Taxation Code resulting from the
inclusion in the gross income of the employee of the wages which were
subject to withholding. The method of determining the amount to be
withheld shall be prescribed by the Franchise Tax Board pursuant to
Section 18663 of the Revenue and Taxation Code.
(2) For each payroll period ending on or after November 1, 2009,
the sum shall comport with the changes made to Section 18663 of the
Revenue and Taxation Code, by the act adding this paragraph.
(b) The department upon request may permit the use of accounting
machines to calculate the proper amount to be deducted and withheld
from wages, if the calculation produces an amount substantially
equivalent to the amount of tax required to be withheld under
subdivision (a).
(c) Withholding shall not be required by this section with respect
to wages, salaries, fees, or other compensation paid by a
corporation for services performed in California for that corporation
to a nonresident corporate director for director services, including
attendance at a board of directors' meeting.
