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AB-1171 Personal income taxes: return filing extension.(2017-2018)

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Date Published: 04/24/2017 09:00 PM
AB1171:v98#DOCUMENT

Amended  IN  Assembly  April 24, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 1171


Introduced by Assembly Members Obernolte and Ridley-Thomas
(Principal coauthor: Senator Hertzberg)

February 17, 2017


An act to amend Section 18567 of the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 1171, as amended, Obernolte. Personal income taxes: return filing extension.
Existing law authorizes the Franchise Tax Board to grant a reasonable extension of time for filing any return, declaration, statement or other document required by the Personal Income Tax Law in the manner and form determined by the Franchise Tax Board. Except as specified, existing law prohibits an extension for more than 6 months. If any taxpayer fails to make and file a return required by the Personal Income Tax Law on or before the due date of the return or the due date as extended by the Franchise Tax Board, then, unless it is shown that the failure is due to reasonable cause and not due to willful neglect, a specified penalty is required to be added. Existing law also requires a specified penalty to be imposed against any partnership required to file a return that fails to file at the prescribed time as determined with regard to any extension of time for filing, as provided.

This bill would instead prohibit an extension for more than 7 months.

This bill, for taxable years beginning on or after January 1, 2017, would authorize an extension for no more than 7 months for partnerships. The bill would also declare the intent of the Legislature that, for the 2016 taxable year only, the Franchise Tax Board is required to presume reasonable cause and not willful neglect in the case of any partnership filing an income tax return if that partnership meets specified requirements.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 The Legislature finds and declares that Chapter 348 of the Statutes of 2016, beginning with returns for the 2016 taxable year, accelerated by one month the original filing due date for returns required to be filed by partnerships under Section 18633 of the Revenue and Taxation Code and by limited liability companies classified as partnerships under Section 18633.5 of the Revenue and Taxation Code. Due to the challenges of complying with the accelerated filing due date, coupled with the inherent complexities of preparing partnership returns, it is the intent of the Legislature that for the 2016 taxable year only, the Franchise Tax Board shall presume reasonable cause and not willful neglect in the case of any partnership that meets both of the following:
(a) The partnership return for taxable year 2016 is filed by the extended due date under former law, which is October 15, 2017, for a calendar year partnership, or by the 15th day of the 10th month following the close of the taxable year of the partnership in the case of fiscal year filers.
(b) The partnership requests relief, in the form and manner specified by the Franchise Tax Board, from the imposition of either or both the delinquent filing penalty under Section 19131 of the Revenue and Taxation Code, or the failure of a partnership to comply with filing requirements penalty under Section 19172 of the Revenue and Taxation Code. The Legislature intends that this relief be implemented in a streamlined manner.

SECTION 1.SEC. 2.

 Section 18567 of the Revenue and Taxation Code is amended to read:

18567.
 (a) (1) The Franchise Tax Board may grant a reasonable extension of time for filing any return, declaration, statement statement, or other document required by Part 10 (commencing with Section 17001) or this part in the manner and form as the Franchise Tax Board may determine. Except for a taxpayer residing or traveling abroad, as provided in paragraph (2), no extension shall be for more than seven six months. In
(2) (A) In the case of a taxpayer residing or traveling abroad, returns shall be filed no later than the 15th day of the sixth month following the close of the taxable year, unless the requirements for extension have been fulfilled on or before that date.
(B) In the case of a partnership required to file a return under Section 18633 or 18633.5, the extension shall be for no more than seven months.
(b) An extension of time granted pursuant to this section is not an extension of time for payment of tax required to be paid on or before the due date of the return without regard to extension. Underpayment of tax penalties shall be imposed as provided by law without regard to any extension granted under this section.
(c) A reasonable extension for payment of tax required by this part may be granted by the Franchise Tax Board whenever in its judgment good cause exists.
(d) The amendments made to this section by the act adding this subdivision shall apply to returns required to be filed for taxable years beginning on or after January 1, 2017.

SEC. 2.SEC. 3.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order for this extension these provisions to be in effect as soon as possible and for persons filing tax returns under the Personal Income Tax Law for the 2016 taxable year, it is necessary that this act take effect immediately.