2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 1 - Deductions › Section 24357.9.

24357.9. (a) In the case of a qualified computer contribution, the amount otherwise allowed as a deduction under Section 24357 shall be reduced by that amount of the reduction provided by Section 24357.1 that is no greater than the sum of the following:
(1) One-half of the amount computed pursuant to Section 24357.1 (computed without regard to this paragraph).
(2) The amount (if any) by which the charitable contribution deduction under this section for any qualified computer contribution (computed by taking into account the amount determined by paragraph (1), but without regard to this paragraph) exceeds twice the basis of the property.
(b) For purposes of this section, the term “qualified computer contribution” means a charitable contribution by a corporation of any computer technology or equipment, but only if all of the following apply:
(1) The contribution is to either of the following:
(A) An educational organization described in Section 170(b)(1)(A)(ii) of the Internal Revenue Code.
(B) An entity described in Section 23701d and exempt from tax under Section 23701 (other than an entity described in subparagraph (A)) that is organized primarily for purposes of supporting elementary and secondary education in California.
(C) A public library (as described in Section 170(e)(6)(B)(i)(III) of the Internal Revenue Code).
(2) The contribution is made not later than three years after the date the taxpayer acquired the property (or in the case of property constructed by the taxpayer, the date the construction of the property is substantially completed).
(3) The original use of the property is by the donor or the donee.
(4) Substantially all of the use of the property by the donee is for use within California for educational purposes in any of the grades K through 12 that are related to the purpose or function of the organization or entity.
(5) The property is not transferred by the donee in exchange for money, other property, or services, except for shipping, installation, and transfer of costs.
(6) The property will fit productively into the entity’s educational plan.
(7) The entity’s use and disposition of the property will be in accordance with paragraphs (4) and (5).
(8) The property meets the standards, if any, as the Secretary of the Treasury may have prescribed by regulation under Section 170(e)(6) of the Internal Revenue Code to assure that the property meets minimum functionality and suitability standards for educational purposes.
(c) A contribution by a corporation of any computer technology or equipment to a private foundation (as defined in Section 509 of the Internal Revenue Code) shall be treated as a qualified computer contribution for purposes of this section if both of the following apply:
(1) The contribution to the private foundation satisfies the requirements of paragraphs (2) and (5) of subdivision (b).
(2) Within 30 days after that contribution, the private foundation does both of the following:
(A) Contributes the property to an entity described in paragraph (1) of subdivision (b) that satisfies the requirements of paragraphs (4) to (7), inclusive, of subdivision (b).
(B) Notifies the donor of that contribution.
(d) In the case of property that is reacquired by the person who constructed the property, both of the following shall apply:
(1) Paragraph (2) of subdivision (b) shall be applied to a contribution of that property by that person by taking into account the date that the original construction of the property was substantially completed.
(2) Paragraph (3) of subdivision (b) shall not apply to that contribution.
(e) For purposes of this section, property shall be treated as constructed by the taxpayer only if the cost of the parts used in the construction of that property (other than parts manufactured by the taxpayer or a related person) do not exceed 50 percent of the taxpayer’s basis in that property.
(f) For purposes of this section:
(1) “Computer technology or equipment” means computer software (as defined by Section 197(e)(3)(B) of the Internal Revenue Code), computer or peripheral equipment (as defined by Section 168(i)(2)(B) of the Internal Revenue Code), and fiber-optic cable related to computer use.
(2) “Corporation” shall not include any of the following:
(A) An “S corporation.”
(B) A personal holding company (as defined in Section 542 of the Internal Revenue Code).
(C) A service organization (as defined in Section 414(m)(3) of the Internal Revenue Code).
(g) (1) This section shall not apply to any contribution made during any taxable year beginning on or after January 1, 2000, and before December 31, 2001.
(2) This section shall not apply to any contributions made during any taxable year beginning after December 31, 2003.
(Amended by Stats. 2002, Ch. 35, Sec. 50. Effective May 8, 2002. Applicable as prescribed by Sec. 74 of Ch. 35.)