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AB-743 Deductions: net operating losses: extended carryback: construction companies.(2017-2018)

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Date Published: 04/04/2017 09:00 PM
AB743:v97#DOCUMENT

Amended  IN  Assembly  April 04, 2017
Amended  IN  Assembly  March 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 743


Introduced by Assembly Member Lackey

February 15, 2017


An act to add Sections 17276.2 and 24416.2 to the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


AB 743, as amended, Lackey. Deductions: net operating losses: extended carryback: construction companies.
The Personal Income Tax Law and the Corporation Tax Law allow various deductions in computing the income that is subject to the taxes imposed by those laws. Both laws allow a deduction for net operating losses, which may be carried back for 2 taxable years preceding the taxable year of the loss.
This bill, for taxable years beginning on or after January 1, 2017, would provide that the carryback for net operating losses is 20 taxable years preceding the taxable year of the loss for losses from a project that contains an affordable housing component component, as defined, for low-income to moderate-income residents by a taxpayer that is primarily engaged in home construction. construction, as defined.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 17276.2 is added to the Revenue and Taxation Code, to read:

17276.2.
 (a) Notwithstanding paragraph (2) of subdivision (c) of Section 17276, for a qualified taxpayer, Section 172(b)(1)(A)(i) of the Internal Revenue Code, is modified by substituting “20 taxable years” in lieu of “two taxable years.”
(b) For the purposes of this section:
(1) “Affordable housing component” means ____. the taxpayer has constructed new housing units, including single-family and multifamily dwellings, offered at a base sales price that is below the annual Federal Housing Administration loan limit designated for the county where the housing is constructed.
(2) “Primarily engaged in home construction” means ____. the taxpayer can prove to the Franchise Tax Board that it has constructed at least 10 new housing units over the past 10 years.
(3) “Qualified taxpayer” means a taxpayer that is primarily engaged in home construction.
(c) The carryback extension allowed under subdivision (a) shall only be allowed for a loss from a project that contains an affordable housing component for low-income to moderate-income residents.
(d) This section shall apply to taxable years beginning on or after January 1, 2017.

SEC. 2.

 Section 24416.2 is added to the Revenue and Taxation Code, to read:

24416.2.
 (a) Notwithstanding paragraph (2) of subdivision (c) of Section 24416, for a qualified taxpayer, Section 172(b)(1)(A)(i) of the Internal Revenue Code, is modified by substituting “20 taxable years” in lieu of “two taxable years.”
(b) For the purposes of this section:
(1) “Affordable housing component” means ____. the taxpayer has constructed new housing, including single-family and multifamily dwellings, offered at a base sales price that is below the annual Federal Housing Administration loan limit designated for the county where the home is constructed.
(2) “Primarily engaged in home construction” means ____. the taxpayer can prove to the Franchise Tax Board that it has constructed at least 10 new housing units over the past 10 years.
(3) “Qualified taxpayer” means a taxpayer that is primarily engaged in home construction.
(c) The carryback extension allowed under subdivision (a) shall only be allowed for a loss from a project that contains an affordable housing component for low-income to moderate-income residents.
(d) This section shall apply to taxable years beginning on or after January 1, 2017.