Bill Text: CA AB406 | 2015-2016 | Regular Session | Introduced

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Bill Title: Corporation Tax Law: income: methods of accounting.

Sponsorship: Partisan Bill (Republican 1)

Status: (Failed) 2016-02-01 - Died at Desk. [AB406 Detail]

Download: California-2015-AB406-Introduced.html

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BILL NUMBER: AB 406	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Brough

                        FEBRUARY 19, 2015

   An act to amend Section 24651 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 406, as introduced, Brough. Corporation Tax Law: income:
methods of accounting.
   The Corporation Tax Law imposes taxes upon, or measured by,
income. Existing law requires the taxpayer's income to be computed
under a method of accounting on the basis of which the taxpayer
regularly computes its income in keeping its books and authorizes the
taxpayer to use one of a specified accounting methods.
   This bill would make nonsubstantive changes to this provision.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 24651 of the Revenue and Taxation Code is
amended to read:
   24651.  (a) Income shall be computed under the method of
accounting on the basis of which the taxpayer regularly computes its
income in keeping its books.
   (b) If no method of accounting has been regularly used by the
taxpayer, or if the method used does not clearly reflect income, the
computation of income shall be made under such method as, in the
opinion of the Franchise Tax Board, does clearly reflect income.
   (c) Subject to subdivisions (a) and (b) and Section 24654, a
taxpayer may compute income under any of the following methods of
 accounting--   accounting: 
   (1) The cash receipts and disbursements  method; 
 method. 
   (2) An accrual  method;   method. 
   (3) Any other method permitted by this  part; or 
 part. 
   (4) Any combination of the foregoing methods permitted under
regulations prescribed by the Franchise Tax Board.
   (d) A taxpayer engaged in more than one trade or business may 
,  in computing income, use a different method of accounting
for each trade or business.
   (e) Except as otherwise expressly provided in this part, a
taxpayer  who   that changes the method of
accounting on the basis of which it regularly computes its income in
keeping its books shall, before computing its income under the new
method, secure the consent of the Franchise Tax Board.
   (f) If the taxpayer does not file with the Franchise Tax Board a
request to change the method of accounting, the absence of the
consent of the Franchise Tax Board to a change in the method of
accounting shall not be taken into account for either of the
following:
   (1) To prevent the imposition of any penalty, or the addition of
any amount to tax, under this part.
   (2) To diminish the amount of that penalty or addition to tax.