AB2490:v95#DOCUMENTBill Start
Amended
IN
Assembly
May 16, 2016
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Amended
IN
Assembly
April 26, 2016
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Amended
IN
Assembly
April 11, 2016
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Amended
IN
Assembly
March 17, 2016
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CALIFORNIA LEGISLATURE—
2015–2016 REGULAR SESSION
Assembly Bill
No. 2490
Introduced by Assembly Member Gatto
|
February 19, 2016 |
An act to add and repeal Section 23714 to of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2490, as amended, Gatto.
Corporation Tax Law: exemption: regulated investment company.
Existing law, the Corporation Tax Law, generally conforms to the federal income tax laws that apply to a regulated investment company and further provides that for purposes of the Corporation Tax Law, its “net income” is equal to its “investment company income.” Existing law exempts from tax under the Corporation Tax Law, various organizations including credit unions, fraternal societies, social welfare organizations, and labor organizations.
This bill would provide that under the Corporation Tax Law, a regulated investment company that is a mutual fund investment management company owned by investors in the mutual funds that it
serves a mutual fund investment management company wholly owned by one or more regulated investment companies and providing management services to the one or more regulated investment companies “at cost” is not subject to tax. tax, except as specified. The bill would authorize the Franchise Tax Board to promulgate regulations as necessary or appropriate to carry out this provision. The bill would repeal these provisions on January 1, 2022.
This
bill would take effect immediately as a tax levy.
Digest Key
Vote:
MAJORITY
Appropriation:
NO
Fiscal Committee:
YES
Local Program:
NO
Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 23714 is added to the Revenue and Taxation Code, to read:23714.
(a) Notwithstanding any other law, a regulated investment company, a mutual fund investment management company wholly owned by one or more regulated investment companies, as defined in Section 851 of the Internal Revenue Code, relating to definition of regulated investment company, that is a mutual fund investment management company owned by investors in the mutual
funds that it serves and providing management services to the one or more regulated investment companies “at cost” is exempt from the taxes imposed by this part, except as provided in Article 2 (commencing with Section 23731).(b) The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this section.
(c) This section shall be repealed on January 1, 2022.
SEC. 2.
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.