Bill Text: CA AB357 | 2019-2020 | Regular Session | Amended

California Assembly Bill 357 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Taxation: tax liability: collections.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2020-01-21 - Consideration of Governor's veto stricken from file. [AB357 Detail]

Download: California-2019-AB357-Amended.html

Amended IN Senate June 19, 2019

Amended IN Assembly May 16, 2019

Amended IN Assembly April 11, 2019

Amended IN Assembly March 07, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill

No. 357

Introduced by Assembly Member Nazarian

February 04, 2019

An act to amend Section 19255 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL'S DIGEST

AB 357, as amended, Nazarian. Taxation: tax liability: collections.

Under existing tax law, once a tax liability becomes due and payable, as defined, a statutory lien arises for that amount upon all real and personal property belonging to that taxpayer. Existing law establishes a statute of limitations on collections of those liabilities to limit the collection period to 20 years beginning from the date that the latest tax liability for a taxable year or the date any other liability that is not associated with a taxable year becomes due and payable, and thereafter extinguishes that liability. Existing law defines “tax liability” as a liability imposed under the Personal Income Tax Law, the Corporation Tax Law, or the laws related to the administration of franchise and income tax laws, including any additions to tax, interest, penalties, fees, and any other amounts relating to the imposed liability. Existing law provides that if more than one liability is due and payable for a particular taxable year, the date upon which the 20-year limitation commences is the due and payable date that is later in time.

This bill would ~~start the 20-year statute of limitations on collections of those liabilities only from the date that the latest tax liability for a taxable year becomes due and payable. The bill would~~ redefine “tax liability” to exclude interest, penalties, costs, or fees, except a specified fee on limited liability companies, relating to the assessment of tax, any other amounts relating to the imposed liability, and any additions to tax. The bill would provide that, for each tax liability due and payable for a particular taxable year, the date upon which the 20-year limitation commences is the date that the tax liability was first assessed. The bill would require the collection period for interest, penalties, costs, or fees that may accrue with a particular tax liability to lapse at the same time as the related tax liability.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 19255 of the Revenue and Taxation Code is amended to read:

19255.

(a) Except as otherwise provided in subdivisions (b) and (e), after 20 years have lapsed from the date the latest tax liability for a taxable year or the date any other liability that is not associated with a taxable year becomes “due and payable” ~~within the meaning of subdivision (c),~~ on the date prescribed by subdivision (b) of Section 19221, the Franchise Tax Board may not collect that amount and the taxpayer’s liability to the state for that liability is abated by reason of lapse of time. Any actions taken by the Franchise Tax Board to collect an uncollectible liability shall be released, withdrawn, or otherwise terminated by the Franchise Tax Board, and no subsequent administrative or civil action shall be taken or brought to collect all or part of that uncollectible amount. Any amounts received in contravention of this section shall be considered an overpayment that may be credited and refunded in accordance with Article 1 (commencing with Section 19301) of Chapter 6.

(b) If a timely civil action filed pursuant to Article 2 of Chapter 6 of this part is commenced, or a claim is filed in a probate action, the period for which the liability is collectable shall be extended and shall not expire until that liability, probate claim, or judgment against the taxpayer arising from that liability is satisfied or becomes unenforceable under the laws applicable to the enforcement of civil judgments.

(1) “Tax liability” means a liability due and payable under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.

(2) “Tax liability” does not include interest, penalties, costs, or fees, excluding the limited liability company fee imposed pursuant to Section 17942, relating to that assessment of tax.

(3)For each tax liability “due and payable” for a particular taxable year, with the exception of a liability resulting from a penalty imposed under Section 19777.5, the date that the tax liability was first assessed shall be the date upon which the 20-year limitation of subdivision (a) commences.
(3) If more than one liability is “due and payable” for a particular taxable year, with the exception of a liability resulting from a penalty imposed under Section 19777.5, the “due and payable” date that is later in time shall be the date upon which the 20-year limitation of subdivision (a) commences.

(4) Notwithstanding the provisions of this section, the collection period for interest, penalties, costs, or fees that may accrue with a particular tax liability shall lapse at the same time as that of the related tax liability.

(d) This section does not apply to amounts subject to collection by the Franchise Tax Board pursuant to Article 5.5 or 7 of this chapter, or any other amount that is not a tax imposed under Part 10 or Part 11, but which the Franchise Tax Board is collecting as though it were a final personal income tax delinquency.

(e) (1) The expiration of the period of limitation on collection under this section shall be suspended for the following periods:

(A) The period during which the Franchise Tax Board is prohibited by reason of a bankruptcy case from collecting, plus six months thereafter.

(B) The period described under subdivision (d) of Section 19008 relating to installment payment agreements.

(C) The period during which collection is postponed by operation of law under Section 18571, related to postponement by reason of service in a combat zone, or under Section 18572, related to postponement by reason of presidentially declared disaster or terroristic or military action.

(D) During any other period during which collection of a tax is suspended, postponed, or extended by operation of law.

(2) A suspension of the period of limitation under this subdivision applies with respect to both parties of any liability that is joint and several.

(f) This section shall be applied on and after July 1, 2006, to any liability “due and payable” before, on, or after that date.