Signed by Governor Arnold Schwarzenegger

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that, in addition to other amendments to the tax code, adjusts carryback and net operating loss provisions for taxpayers and exempts all taxpayers with incomes subject to tax less than $500,000 for the taxable year from those provisions, in order to finance the 2008-2009 budget.

Highlights:

- Suspends net operating loss carrybacks until January 1, 2011, and sets the allowable amount of carryback for the net operating loss attributable to taxable years thereafter as follows (Sec. 2-3):

- 50 percent of the net operating loss for 2011; - 75 percent of the net operating loss for 2012; and - 100 percent of the net operating loss for years after 2013.

- Specifies that a net operating loss attributable to taxable years beginning on or after January 1, 2008 shall be a net operating carryover for 20 years following the loss; and if the loss is attributable to taxable years beginning on or after January 1, 2011, the carryover is 2 years preceding the taxable year of loss (Sec. 5). - Accelerates the payment deadline for Limited Liability Companies' estimated fee payments from April 15 of the following taxable year to June 15 of the current taxable year, and imposes a penalty of 10 percent of the amount of any underpayment unless the estimated payment is equal to or greater than the fee that was due the previous taxable year [sec. 6 (d)]. - Requires the Franchise Tax Board to administer a tax amnesty program during February through March of 2009 for all unpaid penalties and fees related to personal income tax and corporation tax liabilities accumulated during the taxable years of 2003 through 2007 (Sec. 8). - Provides for an enhanced penalty of 50 percent of interest on any unpaid balance for taxpayers who fail to utilize the amnesty program, due at the end of the amnesty period, unless an installment agreement is in place (Sec. 7).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that, in addition to other amendments to the tax code, adjusts carryback and net operating loss provisions for taxpayers and exempts all taxpayers with incomes subject to tax less than $500,000 for the taxable year from those provisions, in order to finance the 2008-2009 budget.

Highlights:

- Suspends net operating loss carrybacks until January 1, 2011, and sets the allowable amount of carryback for the net operating loss attributable to taxable years thereafter as follows (Sec. 2-3):

- 50 percent of the net operating loss for 2011; - 75 percent of the net operating loss for 2012; and - 100 percent of the net operating loss for years after 2013.

- Specifies that a net operating loss attributable to taxable years beginning on or after January 1, 2008 shall be a net operating carryover for 20 years following the loss; and if the loss is attributable to taxable years beginning on or after January 1, 2011, the carryover is 2 years preceding the taxable year of loss (Sec. 5). - Accelerates the payment deadline for Limited Liability Companies' estimated fee payments from April 15 of the following taxable year to June 15 of the current taxable year, and imposes a penalty of 10 percent of the amount of any underpayment unless the estimated payment is equal to or greater than the fee that was due the previous taxable year [sec. 6 (d)]. - Requires the Franchise Tax Board to administer a tax amnesty program during February through March of 2009 for all unpaid penalties and fees related to personal income tax and corporation tax liabilities accumulated during the taxable years of 2003 through 2007 (Sec. 8). - Provides for an enhanced penalty of 50 percent of interest on any unpaid balance for taxpayers who fail to utilize the amnesty program, due at the end of the amnesty period, unless an installment agreement is in place (Sec. 7).

Full Bill Text