Signed by Governor Arnold Schwarzenegger

Vote Smart's Synopsis:

Vote to pass a bill that amends individual and corporate tax requirements with respect to estimated tax payments, understatement penalties, and the tax amnesty program.

Highlights:

- Accelerates the payment schedule for corporations, associations, and business trusts whose estimated tax exceeds the minimum tax beginning January 1, 2009, as follows [sec. 1 (b)]:

- If payments began before the first day of the fourth month of the taxable year: 30 percent (previously 25 percent) in the fourth month, 30 percent (previously 25 percent) in the sixth month, 20 percent (previously 25 percent) in the ninth month, and 20 percent (previously 25 percent) in the twelfth month; and - If payments began before the last day of the third month and before the first day of the 6th month- 40 percent (previously 33 1/3 percent) in the sixth month, 30 percent (previously 33 1/3 percent) in the ninth month, and 30 percent (previously 33 1/3 percent) in the twelfth month.

- Imposes a penalty on corporations for an understatement of tax for any taxable year beginning in 2003 equal to 20 percent of any understatement of tax over $1 million [sec. 5 (a-b)]. - Eliminates provisions of the law established by AB 1452 that direct the Franchise Tax Board to administer a tax amnesty program during the period of February through March 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. 6). - Requires that 60 percent of change to accrual tax treatment of corporation income and franchise tax payments apply to the 2007-08 fiscal year and the remaining balance apply to the 2008-09 fiscal year and subsequent fiscal years (Sec. 7).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that amends individual and corporate tax requirements with respect to estimated tax payments, understatement penalties, and the tax amnesty program.

Highlights:

- Accelerates the payment schedule for corporations, associations, and business trusts whose estimated tax exceeds the minimum tax beginning January 1, 2009, as follows [sec. 1 (b)]:

- If payments began before the first day of the fourth month of the taxable year: 30 percent (previously 25 percent) in the fourth month, 30 percent (previously 25 percent) in the sixth month, 20 percent (previously 25 percent) in the ninth month, and 20 percent (previously 25 percent) in the twelfth month; and - If payments began before the last day of the third month and before the first day of the 6th month- 40 percent (previously 33 1/3 percent) in the sixth month, 30 percent (previously 33 1/3 percent) in the ninth month, and 30 percent (previously 33 1/3 percent) in the twelfth month.

- Imposes a penalty on corporations for an understatement of tax for any taxable year beginning in 2003 equal to 20 percent of any understatement of tax over $1 million [sec. 5 (a-b)]. - Eliminates provisions of the law established by AB 1452 that direct the Franchise Tax Board to administer a tax amnesty program during the period of February through March 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. 6). - Requires that 60 percent of change to accrual tax treatment of corporation income and franchise tax payments apply to the 2007-08 fiscal year and the remaining balance apply to the 2008-09 fiscal year and subsequent fiscal years (Sec. 7).

Full Bill Text

Full Bill Text