Income taxes: withholding: real property sales: Katz-Harris Taxpayers' Bill of Rights Act: report.

(1) Existing law generally requires the transferee of a California real property interest, in specified circumstances, to withhold for income tax purposes 313% of the sales price of the property when the property is acquired from either an individual, or a partnership or corporation without a permanent place of business, as specified. Under existing law, a transferee is not required to withhold any amount under these provisions if the transferee, in good faith and based upon the information of which the transferee has knowledge, certifies under penalty of perjury that the California real property being conveyed is either (A) the seller's or decedent's principal residence, as specified, or (B) is being exchanged, or will be exchanged, for property of like kind, but only to the extent of the amount of the gain not required to be recognized for California income or franchise tax purposes, as specified. In the case of a real property sale not subject to withholding by reason of a like kind exchange under these provisions, existing law requires the transferee to notify the Franchise Tax Board in writing within 10 days of the expiration of the statutory periods specified in federal law and thereafter remit the applicable withholding amounts determined as provided. This bill, with respect to dispositions of California real property interests that occur on or after January 1, 2022, would provide that the transferee is required to notify the Franchise Tax Board and remit the applicable withholding amount, as described above, only to the extent that an intermediary or accommodator has received amounts from the disposition of California real property and has not disbursed those amounts for the purpose of completing an exchange or exchanges, as specified. The bill would authorize the Franchise Tax Board to prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of these provisions and exempt those rules, guidelines, procedures, or other guidance from the rulemaking provisions of the Administrative Procedure Act. (2) The Katz-Harris Taxpayers' Bill of Rights Act requires the Franchise Tax Board to establish the position of the Taxpayers' Rights Advocate and makes the advocate or their designee responsible for coordinating the resolution of taxpayer complaints and problems, including any taxpayer complaints regarding unsatisfactory treatment of taxpayers by board employees. Existing law requires the board, in consultation with the Taxpayers' Rights Advocate, to develop and implement a taxpayer education and information program directed at, but not limited to, identifying forms, procedures, regulations, or laws which are confusing and lead to taxpayer errors. Existing law requires the board to perform annually a systematic identification of areas of recurrent taxpayer noncompliance and report its findings to the Legislature on December 1 of each year. This bill, instead, would require the Franchise Tax Board to submit that report by January 15 of each year.