Bill Text: CA SB1168 | 2011-2012 | Regular Session | Introduced
Bill Title: Income tax credit: qualified principal residence.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-03-28 - Set for hearing May 9. [SB1168 Detail]
Download: California-2011-SB1168-Introduced.html
BILL NUMBER: SB 1168 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Calderon
FEBRUARY 22, 2012
An act to add and repeal Section 17059.2 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1168, as introduced, Calderon. Income tax credit: qualified
principal residence.
The Personal Income Tax Law authorizes credits against the taxes
imposed by that law, including a credit against those taxes in an
amount equal to the lesser of 5% of the purchase price of a qualified
principal residence, as defined, or $10,000, for purchases made
between May 1, 2010, and on or before December 31, 2010, or on or
after December 31, 2010, and before August 1, 2011, subject to
specified restrictions, including the submission of a certification
to the Franchise Tax Board by either the taxpayer or seller, made
under the penalty of perjury, that the residence has either never
been occupied or that the taxpayer is a first-time home buyer.
This bill would authorize a similar credit against those taxes in
an amount equal to the lesser of 5% of the purchase price of a
qualified principal residence, as defined, or $10,000, for purchases
made on or after January 1, 2012, and on or before December 31, 2012,
subject to specified restrictions, including the submission of a
certification to the Franchise Tax Board by either the taxpayer or
seller, made under the penalty of perjury, that the residence has
either never been occupied or that the taxpayer is a first-time home
buyer.
By expanding the definition of an existing crime, this bill
imposes a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17059.2 is added to the Revenue and Taxation
Code, to read:
17059.2. (a) (1) In the case of any taxpayer who purchases a
qualified principal residence on or after January 1, 2012, and on or
before December 31, 2012, pursuant to an enforceable contract
executed on or before December 31, 2012, there shall be allowed as a
credit against the "net tax," as defined in Section 17039, an amount
equal to the lesser of 5 percent of the purchase price of the
qualified principal residence or ten thousand dollars ($10,000).
(2) The amount of any credit allowed under paragraph (1) shall be
applied in equal amounts over the three successive taxable years
beginning with the taxable year in which the purchase of the
qualified principal residence is made.
(3) The credit under this section shall be allowed for the
purchase of only one qualified principal residence with respect to
any taxpayer.
(4) A qualified principal residence is purchased on the date on
which escrow closes with respect to the purchase of the qualified
principal residence.
(b) For purposes of this section:
(1) "Qualified principal residence" means a single-family
residence, whether detached or attached, that is purchased to be the
principal residence of the taxpayer, is eligible for the homeowner's
exemption under Section 218, and has either never been occupied or is
purchased by a first-time home buyer.
(2) "First-time home buyer" means any individual, or individual's
spouse, who had no present ownership interest in a principal
residence during the preceding three-year period ending on the date
of the purchase of the qualified principal residence.
(c) (1) (A) A taxpayer may, but is not required to, reserve a
credit prior to close of escrow for the purchase of a qualified
principal residence that has never been occupied. To reserve a
credit, the taxpayer and seller shall jointly sign and submit to the
Franchise Tax Board a certification that they have entered into an
enforceable contract on or after January 1, 2012, and on or before
December 31, 2012. Upon receipt of the joint certification, the
Franchise Tax Board shall notify the taxpayer that the Franchise Tax
Board has reserved the credit for the taxpayer, pending receipt,
within two weeks after the close of escrow, of the information
required under paragraph (2) for a qualified principal residence that
has never been occupied.
(B) The reservation of a credit shall be canceled if a taxpayer
does not provide either the information required under paragraph (2)
or a notification of cancellation before January 15, 2013.
(2) No credit shall be allowed under this section unless the
taxpayer submits to the Franchise Tax Board, within two weeks after
the date of the purchase of the qualified principal residence, a copy
of the properly executed settlement statement and either one of the
following:
(A) If the qualified principal residence has never been occupied,
a certification by the seller, made under penalty of perjury, that
the residence has never been previously occupied.
(B) If the qualified principal residence is purchased by a
taxpayer who is a first-time home buyer, a certification by the
taxpayer, made under penalty of perjury, that he or she is a
first-time home buyer.
(d) If the taxpayer does not occupy the qualified principal
residence as his or her principal residence for at least two years
immediately following the purchase, any remaining unapplied credit
shall be canceled and any previously applied credit shall be
recaptured, and the taxpayer shall be liable for any increase in tax
attributable to the recapture of any credit previously allowed under
this section.
(e) (1) In the case of two married taxpayers filing separately,
the credit allowed under subdivision (a) shall be equally apportioned
between the two taxpayers.
(2) If two or more taxpayers who are not married purchase a
qualified principal residence, the amount of the credit allowed under
subdivision (a) shall be allocated among the taxpayers in the same
manner as each taxpayer's percentage of ownership, except that the
total amount of the credits allowed to all of these taxpayers shall
not exceed an amount equal to the lesser of 5 percent of the purchase
price of the qualified principal residence or ten thousand dollars
($10,000).
(f) (1) The total amount of credit that may be allocated pursuant
to this section shall not exceed one hundred million dollars
($100,000,000) for the purchase of qualified principal residences
that have never been occupied and one hundred million dollars
($100,000,000) for the purchase of qualified principal residences by
first-time home buyers.
(A) For each certification or reservation received from a taxpayer
for the purchase of a qualified principal residence that has never
been occupied, the total amount of credit available for allocation
shall be reduced by an amount equal to 70 percent of the amount of
the credit for the purchase of a qualified principal residence that
has never been occupied.
(B) For each certification received from a taxpayer for the
purchase of a qualified principal residence by a first-time home
buyer, the total amount of credit available for allocation shall be
reduced by an amount equal to 57 percent of the amount of the credit
for the purchase of a qualified principal residence by a first-time
home buyer.
(2) Once the credits allocated for qualified principal residences
that have never been occupied exceed the limit established in
subparagraph (A) of paragraph (1), the Franchise Tax Board shall
establish a wait list for subsequently received certifications or
reservations, with an order of priority based on the date
certification or reservation was received by the Franchise Tax Board.
The Franchise Tax Board shall notify taxpayers on the wait list no
later than December 31, 2012, as to whether they have been allocated
a credit and the amount allocated.
(3) In the case where a taxpayer is both a first-time home buyer,
as described in paragraph (2) of subdivision (b), and the purchaser
of a qualified principal residence that has never been occupied, the
Franchise Tax Board shall allocate that taxpayer his or her credit
amount from the one hundred million dollars ($100,000,000) for
qualified principal residences that have never been occupied.
(g) (1) Upon receipt of the information described in subdivision
(c), the Franchise Tax Board shall allocate the credit to the
taxpayer on a first-come-first-served basis.
(2) (A) Except as provided in subparagraph (B), the taxpayer shall
claim the credit on a timely filed original return.
(B) Taxpayers on the wait list, as described in paragraph (2) of
subdivision (f), that are allocated a credit for a qualified
principal residence that was purchased in the 2012 taxable year may
claim the credit on an amended income tax return for that taxable
year.
(3) The date the information described in subdivision (c) is
received shall be determined by the Franchise Tax Board.
(4) (A) The determinations of the Franchise Tax Board with respect
to the date the information described in subdivision (c) is
received, the allocation and reservation of credit, and whether a
return has been timely filed for purposes of this subdivision, may
not be reviewed in any administrative or judicial proceeding.
(B) Any disallowance of a credit claimed due to a determination
under this subdivision, including the application of the limitation
specified in subdivision (f), shall be treated as a mathematical
error appearing on the return. Any amount of tax resulting from that
disallowance may be assessed by the Franchise Tax Board in the same
manner as provided by Section 19051.
(h) The Franchise Tax Board may prescribe rules, guidelines, or
procedures necessary or appropriate to carry out the purposes of this
section, including any guidelines regarding the allocation of the
credit allowed under this section. Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code does not apply to any rule, guideline, or procedure prescribed
by the Franchise Tax Board pursuant to this section.
(i) The credit allowed by this section is not a business credit
within the meaning of Section 17039.2.
(j) No credit shall be allowed under this section if any of the
following apply:
(1) The taxpayer was allowed a credit under Section 17059 or
17059.1.
(2) The taxpayer is not 18 years of age or older as of the date of
purchase. A taxpayer who is married at the date of purchase shall be
considered to be 18 years of age if the spouse of the taxpayer is 18
years of age or older on the date of purchase.
(3) The taxpayer or the taxpayer's spouse, if the taxpayer is
married, is related to the seller within the meaning of Section 267
of the Internal Revenue Code, related to losses, expenses, and
interest with respect to transactions between related taxpayers.
(4) The taxpayer qualifies as a dependent, as defined in Section
17056, of any other taxpayer for the taxable year of the purchase.
(k) This section shall remain in effect only until December 1,
2015, and as of that date is repealed.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 3. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
