Bill Text

Bill Information

PDF |Add To My Favorites | print page

AB-405 State Board of Equalization: administration: interest.(2015-2016)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
AB405:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Assembly Bill No. 405


Introduced by Assembly Member Brough

February 19, 2015


An act to amend Section 6591.5 of the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


AB 405, as introduced, Brough. State Board of Equalization: administration: interest.
The Sales and Use Tax Law, and other laws by reference to that law, provide that interest is paid by taxpayers and feepayers with respect to underpayments of various taxes, surcharges, and fees at a modified adjusted rate per annum, as defined by reference to a specified federal statute, and that interest is paid to taxpayers and feepayers with respect to overpayments of various taxes, surcharges, and fees as determined in accordance with a specified federal statute, which requires that the rate paid on overpayments be based on the rate of 13-week treasury bills, as specified.
This bill would revise the definition of “modified adjusted rate per annum,” which would thereby require that interest on overpayments be determined in the same manner as interest on underpayments is now determined.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 6591.5 of the Revenue and Taxation Code is amended to read:
6591.5.

(a)(1)For interest required to be paid to the state upon underpayments of tax to the state, “ modified adjusted rate per annum” means the adjusted annual rate established pursuant to subdivision (c), plus three percentage points.

(2)For interest required to be paid by the state upon overpayments of tax, “modified adjusted rate per annum” means the adjusted annual rate established pursuant to subdivision (d).

(b)“Modified adjusted rate per month, or fraction thereof” means the modified adjusted rate per annum divided by 12.

(c)The

6591.5.
 (a) “Modified adjusted rate established for interest to be paid upon underpayments of tax shall be per annum” means the rate determined in accordance with the provisions of Section 6621 6621(a)(2) of the Internal Revenue Code, which establish establishes the underpayment rate, except rate under that the determination specified in code, plus three percentage points, except its reference to Section 6621(b) of the Internal Revenue Code, and the determination therein, shall be modified to be determined semiannually as follows:
(1) The rate for January shall apply for the following July 1 to December 31, inclusive.
(2) The rate for July shall apply for the following January 1 to June 30, inclusive.

(d)(1)Except as provided in paragraph (2), the rate established for interest to be paid by the state upon overpayments of tax shall be equal to the bond equivalent rate of 13-week treasury bills auctioned, rounded to the nearest full percent (or if a multiple of one-half of 1 percent, the rate shall be increased to the next highest full percent), as follows:

(A)The bond equivalent rate of 13-week treasury bills established at the first auction held during the month of January shall apply for the following July 1 to December 31, inclusive.

(B)The bond equivalent rate of 13-week treasury bills established at the first auction held during the month of July shall apply for the following January 1 to June 30, inclusive.

(2)For the period July 1, 1991, through June 30, 1992, the rate to be paid by the state upon overpayments of tax shall be equal to the bond equivalent rate of 13-week treasury bills established at the auction held on July 1, 1991, rounded to the nearest full percent (or if a multiple of one-half of 1 percent, the rate shall be increased to the next highest full percent).

(e)

(b) “Modified adjusted rate per month, or fraction thereof” means the modified adjusted rate per annum divided by 12.
(c) For purposes of this part, and any other provision of law referencing this method of computation, in computing the amount of any interest required to be paid by the state or by the taxpayer, or any other amount determined by reference to that amount of interest, that interest and that amount shall be computed as simple interest, not compound interest.