Personal income taxes: corporation taxes: transfer of tax losses.

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, including a deduction for net operating losses, which may be carried back for 20 taxable years preceding the taxable year of the loss, as specified. The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally define "gross income" for purposes of computing taxable income as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income. This bill would allow a taxpayer under either the Personal Income Tax Law or the Corporation Tax Law to transfer any tax loss, as defined, to an unrelated party, as provided. The bill, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, would provide for an additional exclusion from the taxpayer's "gross income" under both of those laws any amount received by a taxpayer in exchange for a tax loss transferred under this bill if the taxpayer invests that amount in an affordable housing project or a corporation, partnership, or limited liability company that is engaged in providing affordable housing, as provided, within 180 days of receipt. The bill would authorize the Franchise Tax Board to adopt regulations to implement these provisions and exempt those regulations from the rulemaking provisions of the Administrative Procedure Act. Existing law requires a bill that would authorize a new tax expenditure, as defined, under the Personal Income Tax Law or the Corporation Tax Law, or an exemption from the taxes imposed by the Sales and Use Tax Law to contain specific goals, purposes, and objectives that the tax expenditure will achieve and detailed performance indicators and data collection requirements for determining whether the new credit achieves these goals, purposes, and objectives. This bill would make findings specifying the goals, purposes, and objectives of the exclusions from "gross income" allowed by the bill will achieve and detailed performance indicators and data collection requirements for determining whether those exclusions achieve these goals, purposes, and objectives.