Bill Text: CA SB1449 | 2015-2016 | Regular Session | Amended

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Bill Title: Personal income tax: credit for taxes paid.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2016-11-30 - From committee without further action. [SB1449 Detail]

Download: California-2015-SB1449-Amended.html

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BILL NUMBER: SB 1449	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 2, 2016
	AMENDED IN SENATE  APRIL 18, 2016

INTRODUCED BY   Senator Nguyen

                        FEBRUARY 19, 2016

   An act to amend Section 18001 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1449, as amended, Nguyen. Personal income tax: credit for taxes
paid.
   The Personal Income Tax Law allows a credit against the net tax
imposed by that law to residents for specified taxes paid to another
state on income derived from sources within that state. That law
requires income derived from sources within that state to be
determined by applying nonresident sourcing rules for determining
income from sources within this state.
   This bill would, instead, require the apportionment and allocation
rules of the other state to be used to determine the source of
income derived from that  state if doing so will either
maintain or increase the amount of the credit that a taxpayer is
allowed.   state. 
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  It is the intent of the Legislature to do the
following:
   (a) Require that the Other State Tax Credit be administered in a
manner to help prevent California residents from being subject to
taxation on more than 100 percent of their income.
   (b) Modify existing law to prevent the risk of there being an
impermissible burden on interstate commerce resulting from the
potential burden of multiple taxation.
  SEC. 2.  Section 18001 of the Revenue and Taxation Code is amended
to read:
   18001.  (a) Subject to the following conditions, residents shall
be allowed a credit against the "net tax" (as defined by Section
17039) for net income taxes imposed by and paid to another state (not
including any preference, alternative, or minimum tax comparable to
the tax imposed by Section 17062) on income taxable under this part:
   (1) The credit shall be allowed only for taxes paid to the other
state (not including any preference, alternative, or minimum tax
comparable to the tax imposed by Section 17062) on income derived
from sources within that state which is taxable under its laws
irrespective of the residence or domicile of the recipient.
   This paragraph shall not apply to residents to whom subdivision
(b) of Section 17014 applies.
   (2) The credit shall not be allowed if the other state allows
residents of this state a credit against the taxes imposed by that
state (not including any preference, alternative, or minimum tax
comparable to the tax imposed by Section 17062) for "net tax" (as
defined by Section 17039) paid or payable under this part.
   (3) The credit shall not exceed the proportion of the "net tax"
(as defined by Section 17039) payable under this part as the income
subject to tax in the other state (not including any preference,
alternative, or minimum tax comparable to the tax imposed by Section
17062) and also taxable under this part bears to the taxpayer's
entire income upon which the "net tax" (as defined by Section 17039)
is imposed by this part.
   (4) No credit shall be allowed under this section for any tax
imposed by Section 17062.
   (b) For purposes of this section, the amount of "net income taxes"
paid to another state shall include the taxpayer's pro rata share of
any taxes on, or according to, or measured by, income or profits
paid or accrued, which were paid by an "S" corporation, as provided
by Section 18006.
   (c)  (1)    For purposes of this
section, "income derived from sources within that state" shall be
determined by applying the nonresident sourcing rules for determining
income from sources within this state, as specified in Chapter 11
(commencing with Section 17951), and the regulations thereunder,
except that the apportionment and allocation rules of the other state
shall apply in lieu of Article 2 (commencing with Section 25120) of
Chapter 17 of Part 11. 
   (2) The changes made in paragraph (1) by the act adding this
paragraph shall apply if it will either maintain or increase the
amount of the credit that a taxpayer is allowed. 
  SEC. 3.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.