AB 2529

Bill Subjects

Abstract

Existing law authorizes the Franchise Tax Board to require any person to withhold for income tax purposes an amount of a taxpayer's income, as specified, that reasonably represents the amount of tax due, as determined by the board. Existing law requires the transferee of a California real property interest, in specified circumstances, to withhold for income tax purposes 313% of the sales price of the property when the property is acquired from an individual, or a partnership or corporation without a permanent place of business, as specified. Existing law allows a credit against the tax to the recipient of the income for the taxable year in which that amount was withheld under these provisions. Existing law exempts from the withholding requirements real property that is exchanged, or will be exchanged, for property of like kind, as defined, and that qualifies for nonrecognition treatment under California income or franchise tax purposes. This bill would require income tax withholding, as provided, for like kind transfers for out-of-state properties that occur on or after January 1, 2019. Under existing law, failure to withhold as required by the above-described provisions is a crime. This bill would also make a violation of its provisions a crime. By expanding the scope of a crime, the bill imposes a state-mandated local program. The bill also would state the intent of the Legislature in this regard and would make conforming changes. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.