Attorney General No.
Secretary of State No.
PERSONAL INCOME, BANK AND CORPORATION TAX LAWS. INITIATIVE STATUTE. Effective in 1985, provides taxable income and filing status of California taxpayers shall be determined by federal income tax law except for specified exceptions. Modifies existing California tax rates, increasing some and lowering others. Provides for future tax rate adjustments to compensate for future federal law amendments resulting in projected state revenue increase or decrease of 3.5% or over. Effective in 1986, provides legislature shall conform state laws on reporting and computation of bank and corporation taxes to federal laws and adjust California rates so there is no resulting revenue loss. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Revenue effects through adoption of federal law. Impact on state revenues from the personal income tax changes can only be roughly approximated because of several unknowns. Adoption of the initiative could result in state revenue loss of up to $200 million in 1985. Beyond 1985, revenue effect is indeterminable. Because of tax adjustments there would be no revenue loss from the bank and corporation tax changes. Revenue effects due to future federal law changes. There is a potential annual revenue loss or gain from the personal income tax changes of up to $370 million if future federal law changes impact on state revenue is less than 3.5%. Future changes could result in an indeterminable state revenue gain in bank and corporation taxes if their effect is to raise taxable corporate income. State costs. There is a potential for major administrative cost increases due to federal law changes after state tax forms have been prepared and unknown audit-related administrative cost increases.
Conway H. Collis, 901 Wilshire Boulevard, Suite 210, Santa Monica, Ca 90401 (213) 451-5777
Failed to Qualify
Personal Income, Bank And Corporation Tax Laws. California Initiative 353 (1984).