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SB-43 Income and corporation taxes: net capital gains: exclusion. (2009-2010)

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CALIFORNIA LEGISLATURE— 2009–2010 8th Ext.

Senate Bill
No. 43

Introduced  by  Senator Dutton

February 12, 2010

An act to add and repeal Sections 18154 and 24996 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 43, as introduced, Dutton. Income and corporation taxes: net capital gains: exclusion.
The Personal Income Tax Law and the Corporation Tax Law provide that gain or loss upon the disposition of a capital asset is determined by reference to the adjusted basis of that asset.
This bill would, for taxable years beginning on or after January 1, 2012, and before January 1, 2015, provide that gross income does not include 50% of any net capital gain, as defined, from the sale or exchange of a capital asset, as defined, that is held for more than 3 years, as specified.
The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. The Governor issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on January 8, 2010.
This bill would state that it addresses the fiscal emergency declared by the Governor by proclamation issued on January 8, 2010, pursuant to the California Constitution.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 18154 is added to the Revenue and Taxation Code, to read:

18154.
 (a) For each taxable year beginning on or after January 1, 2012, and before January 1, 2015, gross income shall not include 50 percent of any net capital gain.
(b) For purposes of this section, “net capital gain” shall be defined by Section 1222 of the Internal Revenue Code, except that “net capital gain” shall be computed only for capital assets (as defined by Section 1221 of the Internal Revenue Code) purchased on or after the effective date of the act adding this section and that are held for more than three years.
(c) This section shall remain in effect only until December 1, 2015, and as of that date is repealed.

SEC. 2.

 Section 24996 is added to the Revenue and Taxation Code, to read:

24996.
 (a) For each taxable year beginning on or after January 1, 2012, and before January 1, 2015, gross income shall not include 50 percent of any net capital gain.
(b) For purposes of this section, “net capital gain” shall be defined by Section 1222 of the Internal Revenue Code, except that “net capital gain” shall be computed only for capital assets (as defined by Section 1221 of the Internal Revenue Code) purchased on or after the effective date of the act adding this section and that are held for more than three years.
(c) This section shall remain in effect only until December 1, 2015, and as of that date is repealed.

SEC. 3.

 This act addresses the fiscal emergency declared by the Governor by proclamation on January 8, 2010, pursuant to subdivision (f) of Section 10 of Article IV of the California Constitution.

SEC. 4.

  This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.