Income taxes: credits: electronic filing: charitable remainder trusts.

The Personal Income Tax Law allows for the computation of, and the order of allowance of, various credits against the "net tax," as defined. The Corporation Tax Law provides for a tentative minimum tax and further provides that, except for specified credits, no other credit shall reduce the tax imposed below the tentative minimum tax. This bill would, for taxable years beginning on or after January 1, 2014, include the specified tax credit allocated by GO-Biz in the order of credits allowed against the "net tax." This bill would also, for taxable years beginning on or after January 1, 2014, additionally allow the specified credit under the Corporation Tax Law allocated by GO-Biz to reduce the tentative minimum tax. The Personal Income Tax Law allows a credit for each dependent of a taxpayer and does not require a tax identification number of the dependent to be included on the return filed with the Franchise Board. This bill would require, for taxable years beginning on or after January 1, 2015, the tax identification number of a dependent to be included on the taxpayer's return and would allow the taxpayer who did not provide the taxpayer identification number on the return to thereafter claim a credit or refund of that amount, as provided. Existing law requires every taxpayer subject to the Personal Income Tax Law or the Corporation Tax Law to timely file a return with the Franchise Tax Board, unless exempt, on a form prescribed by the Franchise Tax Board. This bill, for taxable years beginning on or after January 1, 2014, would require an acceptable return, as defined, of a business entity, as defined, that was prepared using a tax preparation software to be filed using electronic technology in a form and manner prescribed by the Franchise Tax Board. This bill would require a business entity that fails to comply with that filing requirement for returns filed for taxable years beginning on or after January 1, 2017, to pay specified penalties for each failure unless the failure is due to reasonable cause, and not willful neglect. This bill would require the Franchise Tax Board to conduct programs to educate business entities on these requirements and liberally interpret and grant waivers of the penalty, as specified. The Personal Income Tax Law does not conform to specified provisions of federal law relating to the taxation of specified trusts. Existing law exempts from tax for the taxable year any charitable remainder annuity trust or charitable remainder unitrust unless that trust has unrelated business taxable income for the taxable year, in which case that trust shall be subject to tax, as provided. This bill, for taxable years beginning on or after January 1, 2014, would conform, as modified, to the federal provisions for a charitable remainder annuity trust and a charitable remainder unitrust by providing that a trust shall remain tax-exempt, even if that trust has unrelated business taxable income, in which case that income shall be taxed as provided. This bill would incorporate additional changes in Section 23036 of the Revenue and Taxation Code, proposed by AB 1839, to be operative only if AB 1839 and this bill are both chaptered and become effective on or before January 1, 2015, and this bill is chaptered last.