Taxation: administration.

(1) Existing law authorizes the state to issue a withholding order for taxes to collect a state tax liability, including any penalties, accrued interest, and costs, in accordance with certain procedures. Existing law defines "state tax liability" to mean an amount for which the state has a state tax lien created pursuant to specified provisions. This bill would expand the definition of "state tax liability" to also include any liability under the Personal Income Tax Law, the Corporation Tax Law, or specified franchise and income tax provisions that is due and payable and that is unpaid, as specified. (2) Existing law imposes various duties on the Franchise Tax Board with respect to the imposition of penalties in connection with tax avoidance, and partially conforms to federal income tax laws with respect to the penalties imposed. This bill, in modified conformity with federal income tax laws, would impose a penalty for an erroneous claim for refund or credit, as specified. (3) Existing laws require the Franchise Tax Board to administer specified taxes and collect those taxes from delinquent tax debtors and requires the Franchise Tax Board, in coordination with financial institutions doing business in this state, to operate a Financial Institution Record Match System utilizing automated data exchanges to the maximum extent feasible in order to allow the Franchise Tax Board to match its list of delinquent tax debtors, as defined, with the lists provided by the financial institutions. Existing law authorizes the Franchise Tax Board to disclose specified taxpayer information for purposes of data matching, and provides that the specified use of certain data is a misdemeanor. This bill would expand the definition of delinquent tax debtor to include a person liable for specified taxes, fees, surcharges, debts, penalties, interest, or other amounts required to be paid to the State Board of Equalization or paid or referred to the Employment Development Department, as provided. This bill would authorize the State Board of Equalization and the Employment Development Department to provide the Franchise Tax Board with information relating to delinquent tax debtors, would allow that information to be used in the collection of delinquent amounts under the Financial Institution Record Match System (FIRM) , and would require the State Board of Equalization and the Employment Development Department to reimburse the Franchise Tax Board for its costs in the implementation and administration of FIRM. By expanding the definition of an existing crime, this bill would impose a state-mandated local program. (4) Existing law has enacted the Multistate Tax Compact, which contains provisions regarding state tax laws, forms the Multistate Tax Commission, and requires the budget of the Multistate Tax Commission to be funded by party states. Existing law provides that, notwithstanding the provisions of the Multistate Tax Compact, including a provision that would allow a taxpayer to apportion its business income in accordance with a specified 3-factor formula, business income derived from or attributable to sources both within and without this state shall be apportioned between this state and other states and foreign countries in accordance with a specified 4-factor formula based on the property, payroll, and sales within and without this state, except that in the case of an apportioning trade or business that derives more than 50% of its gross business receipts from conducting one or more qualified business activities, as defined, business income is apportioned in accordance with a specified 3-factor formula. That law, for taxable years beginning on or after January 1, 2011, allows a taxpayer to apportion its income in accordance with a single sales factor formula, except as provided, pursuant to an irrevocable annual election, as specified. This bill would repeal all provisions related to the Multistate Tax Compact. This bill would find and declare that the doctrine of election provides that an election affecting the computation of tax must be made on an original timely filed return for the taxable period for which the election is to apply and once made is binding, and that the doctrine of election applies to any election that affects the computation of tax, as specified, which does not constitute a change in, but is declaratory of, existing law. This bill would also provide that the repeal of the Multistate Tax Compact in this bill shall not be construed to create any inference that a change in interpretation with respect to the compact or any reference to the compact prior to its repeal is implied by that repeal. (5) This bill would appropriate $1,000 from the General Fund to the Franchise Tax Board for administrative costs. (6) 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. (7) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.