Vetoed by Governor Arnold Schwarzenegger

Vote Smart's Synopsis:

Vote to pass a bill that alters existing statutes regarding tax withholding, tax shelters, and the use tax.

Highlights:

-Requires that internet retailers, whose total sales within the state exceed $10,000 in a year and pays a commission to a third party in California for the referral of potential customers, to collect a use tax on sales to residents of California (Sec. 3). -Requires employers to withhold a tax from each employee based on a percentage calculated from the sum of the employer's medical, healthcare, and non-employee payments to that individual. The rate for this tax withholding is 3% for residents and 7% for nonresidents (Sec. 7). -Directs the Franchise Tax Board to revise wage withholding tables for wages paid on or after October 1, 2009 in order to require employers withhold an amount 10% greater than the current amount in an attempt to prevent underwithholding (Sec. 8). -Increases the rate of withholding for supplemental wages by 0.6%, placing it at 6.6% beginning on October 1, 2009 (Sec. 8). -Increases the withholding for stock and bonus payments constituting wages from 9.3% to 10.23% beginning on October 1, 2009 (Sec. 8). -Requires that income and corporate taxpayers remit 30% of their expected tax payment in April and 40% in June, beginning on January 1, 2010; previous payment schedule required 30% remittance in both April and June (Sec. 13). -Establishes, through a public-private partnership involving the Franchise Tax Board, the Financial Institution Record Match System; the system would allow financial institutions and the Franchise Tax Board to share files and information on debtors and delinquent taxpayers (Sec. 15). -Alters existing statutes regarding abusive tax shelters by providing further definition to terms such as "abusive tax avoidance transaction," and alters the penalties for avoidance (Sec. 20-21).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that alters existing statutes regarding tax withholding, tax shelters, and the use tax.

Highlights:

-Requires that internet retailers, whose total sales within the state exceed $10,000 in a year and pays a commission to a third party in California for the referral of potential customers, to collect a use tax on sales to residents of California (Sec. 3). -Requires employers to withhold a tax from each employee based on a percentage calculated from the sum of the employer's medical, healthcare, and non-employee payments to that individual. The rate for this tax withholding is 3% for residents and 7% for nonresidents (Sec. 7). -Directs the Franchise Tax Board to revise wage withholding tables for wages paid on or after October 1, 2009 in order to require employers withhold an amount 10% greater than the current amount in an attempt to prevent underwithholding (Sec. 8). -Increases the rate of withholding for supplemental wages by 0.6%, placing it at 6.6% beginning on October 1, 2009 (Sec. 8). -Increases the withholding for stock and bonus payments constituting wages from 9.3% to 10.23% beginning on October 1, 2009 (Sec. 8). -Requires that income and corporate taxpayers remit 30% of their expected tax payment in April and 40% in June, beginning on January 1, 2010; previous payment schedule required 30% remittance in both April and June (Sec. 13). -Establishes, through a public-private partnership involving the Franchise Tax Board, the Financial Institution Record Match System; the system would allow financial institutions and the Franchise Tax Board to share files and information on debtors and delinquent taxpayers (Sec. 15). -Alters existing statutes regarding abusive tax shelters by providing further definition to terms such as "abusive tax avoidance transaction," and alters the penalties for avoidance (Sec. 20-21).

Full Bill Text