Corporation Tax Law: exemption: regulated investment company.

Existing law, the Corporation Tax Law, generally conforms to the federal income tax laws that apply to a regulated investment company and further provides that for purposes of the Corporation Tax Law, its "net income" is equal to its "investment company income." Existing law exempts from tax under the Corporation Tax Law, various organizations including credit unions, fraternal societies, social welfare organizations, and labor organizations. This bill would provide that under the Corporation Tax Law, a mutual fund investment management company wholly owned by one or more regulated investment companies and providing management services to the one or more regulated investment companies "at cost" is not subject to tax, except as specified. The bill would authorize the Franchise Tax Board to promulgate regulations as necessary or appropriate to carry out this provision. The bill would repeal these provisions on January 1, 2022. This bill would take effect immediately as a tax levy.