Bill Text: CA SB49 | 2009-2010 | Regular Session | Amended

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

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Bill Title: Income tax credit: qualified principal residence.

Spectrum: Moderate Partisan Bill (Republican 11-2)

Status: (Introduced - Dead) 2010-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB49 Detail]

Download: California-2009-SB49-Amended.html

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BILL NUMBER: SB 49	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 14, 2009

INTRODUCED BY   Senator Dutton

                        JANUARY 13, 2009

   An act to  add and repeal   amend 
Section 17059 of the Revenue and Taxation Code, relating to taxation,
to take effect immediately, tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 49, as amended, Dutton. Income tax credit: qualified principal
residence.
   The Personal Income Tax Law authorizes various credits against the
taxes imposed by that law.  Existing law authorizes 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. Existing law requires a taxpayer to provide the Franchise
Tax Board with a certification from the seller of qualified principal
residence that the residence, has never been previously occupied
within one week of the sale of the residence and caps the total
amount of the credit at $100,000,000. 
   This bill would  allow a credit for the purchase during a
specified period of a qualified principal residence, as defined, in
an amount equal to that portion of the purchase price that does not
exceed $10,000, as provided   provide that a taxpayer
may reserve a credit with the Franchise Tax Board and require that
the certification be provided to the Franchise Tax Board within one
week of the close of escrow of the qualified principal residence.
This bill would also remove the cap on the total credit amount
allowed  .
   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.    Section 17059 of the   Revenue
and Taxation Code   is amended to read: 
   17059.  (a) (1) In the case of any taxpayer who purchases a
qualified principal residence on and after March 1, 2009, and before
March 1, 2010, 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 taxpayer may, but is not required to, reserve a credit prior
to close of escrow. 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 the agreement on or after
March 1, 2009, and before March 1, 2010. Upon receipt of the joint
certification, the Franchise Tax Board shall reserve the credit for
the taxpayer. 
   (b) (1) For purposes of this section, "qualified principal
residence" means a single-family residence, whether detached or
attached, that has never been occupied, that is purchased to be the
principal residence of the taxpayer for a minimum of two years and is
eligible for the homeowner's exemption under Section 218.
   (2) No credit shall be allowed under this section  , whether
or not the taxpayer reserves a credit pursuant to paragraph (4) of
subdivision (a),  unless the taxpayer submits with his or her
tax return a certification by the seller of the qualified principal
residence that the residence has never been previously occupied. The
seller shall provide the certification to the taxpayer and to the
Franchise Tax Board within one week of the  sale 
 close of escrow  of the qualified principal residence. 
If the taxpayer reserves a credit pursuant to paragraph (4) of
subdivision (a), the close of escrow need not occur before March 1,
2010. 
   (3) 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 the credit shall be canceled, and
the taxpayer shall be liable for any credit allowed under this
section on previous tax returns.
   (c) (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 ten thousand dollars ($10,000). 
   (d) The total amount of credit that may be allowed pursuant to
this section shall not exceed one hundred million dollars
($100,000,000).  
   (e) 
    (d)  (1) Upon receipt of the certification from the
seller, as described in paragraph (2) of subdivision (b), the
Franchise Tax Board shall allocate the credit to the taxpayer
 on a first-come, first-served basis  .
   (2) The taxpayer shall claim the credit on a timely filed original
return.
   (3) The date a certification is received shall be determined by
the Franchise Tax Board.
   (4) (A) The determinations of the Franchise Tax Board with respect
to the date a certification is received, 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 paragraph (1), 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. 
   (f) 
    (e)  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. 
   (g) 
    (f)  The credit allowed by this section is not a
business credit within the meaning of Section 17039.2. 
   (h) 
    (g)  This section shall remain in effect only until
December 1, 2013, and as of that date is repealed.
   SEC. 2.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  
  SECTION 1.   Section 17059 is added to the Revenue
and Taxation Code, to read:
   17059.  (a) (1) In the case of any individual who is a purchaser
of a qualified principal residence during the taxable year, there
shall be allowed as a credit against the "net tax," as defined in
Section 17039, an amount equal to that portion of the purchase price
of the residence that does not exceed ten thousand dollars ($10,000).

   (2) The amount of the credit allowed under paragraph (1) shall be
equally divided among the three taxable years beginning with the
taxable year in which the purchase of the qualified principal
residence is made.
   (b) (1) The credit under this section shall be allowed only with
respect to purchases made on or after March 1, 2009, and before March
1, 2010.
   (2) The credit under this section shall be allowed only for one
purchase of a qualified principal residence with respect to any
individual.
   (c) For purposes of this section:
   (1) "Qualified principal residence" means a new or previously
unoccupied single-family residence, whether detached or attached,
that is purchased to be the principal residence of the purchaser for
a minimum of one year.
   (2) No credit shall be allowed under this section unless the
taxpayer submits a certification by the seller of the residence that
the residence is a new or previously unoccupied single-family
residence.
   (3) Any credit allowed by this section shall be disallowed, and
shall be recaptured in accordance with rules established by the
Franchise Tax Board, if the individual does not occupy the qualified
principal residence as his or her principal residence for at least
one year during the period that this section is in effect.
   (d) (1) In the case of two married individuals filing separately,
subdivision (a) shall be applied to each individual by substituting
five thousand dollars ($5,000) for ten thousand dollars ($10,000) in
subdivision (a).
   (2) If two or more individuals who are not married purchase a
qualified principal residence, the amount of the credit allowed under
subdivision (a) shall be allocated among the individuals in the same
manner as each individual's percentage of ownership, except that the
total amount of the credits allowed to all of those individuals
shall not exceed ten thousand dollars ($10,000).
   (e) This section shall remain in effect only until December 1,
2013, and as of that date is repealed.  
  SEC. 2.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.