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California General Assembly Passes Internal Revenue Code Conformity Bill

The California General Assembly has passed a bill that, if enacted, would update California's Internal Revenue Code (IRC) conformity date from January 1, 2005, to January 1, 2009, for taxable years beginning on or after January 1, 2010, for California personal income and corporation franchise and income taxes. By updating the conformity date, California would incorporate many, but not all, of the federal changes enacted by the following federal acts that amended IRC provisions followed by California:

-- the Energy Tax Incentives Act of 2005 (P.L. 109-58),

California - Corporate, Personal Income Taxes: Governor Vetoes Conformity Legislation

California Gov. Arnold Schwarzenegger has vetoed A.B. 1580, which would have updated California's current Internal Revenue Code conformity date of January 1, 2005, to January 1, 2009, and incorporated many, but not all, of the federal amendments enacted during that period for state income and franchise tax purposes (see TAXDAY, 2009/09/14, S.4 and TAXDAY, 2009/09/09, S.3). In his veto message, the governor stated that he could not support the bill because of the provision that would partially conform to the federal penalty on erroneous refund claims that was inserted at the last minute.

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