Income and Corporation taxes: denial of deduction: owner fine or penalty.

The Personal Income Tax Law and the Corporation Tax Law allow various deductions in computing the income that is subject to the taxes imposed by those laws. Both laws allow a deduction for ordinary and necessary business expenses, including a deduction for amounts paid or incurred for specified types of fines or penalties. This bill, for taxable years beginning on or after January 1, 2014, would disallow, under both laws, a deduction for the amount of any fine or penalty paid or incurred by an owner of all or part of a professional sports franchise where that fine or penalty is assessed or imposed by the professional sports league that includes that franchise. This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. This bill would take effect immediately as a tax levy.