reglab/statecodes huggingface dataset:
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23732.

23732. Section 512 of the Internal Revenue Code, relating to unrelated business taxable income, applies, except as otherwise provided.
(a) Section 512(a)(2) of the Internal Revenue Code, relating to special rule for foreign organizations, does not apply.
(b) Section 512(a)(3) of the Internal Revenue Code, relating to special rules applicable to organizations described in paragraph (7), (9), (17), or (20) of Section 501(c), shall be modified as follows:
(1) The reference to Section 501(c)(7) of the Internal Revenue Code shall be modified to refer to Section 23701g.
(2) The reference to Section 501(c)(9) of the Internal Revenue Code shall be modified to refer to Section 23701i.
(3) The reference to Section 501(c)(17) of the Internal Revenue Code shall be modified to refer to Section 23701n.
(4) The reference to Section 501(c)(20) of the Internal Revenue Code shall be modified to refer to Section 23701q.
(c) Section 512(d) of the Internal Revenue Code, relating to treatment of dues of agricultural or horticultural organizations, shall be modified by substituting “Section 23701a” for “Section 501(c)(5)” of the Internal Revenue Code.
(Amended by Stats. 2015, Ch. 303, Sec. 490. (AB 731) Effective January 1, 2016.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23734.

23734. (a) Section 513 of the Internal Revenue Code, relating to unrelated trade or business, shall apply, except as otherwise provided.
(b) Section 513(g) of the Internal Revenue Code, relating to certain pole rentals, shall not apply.
(Amended by Stats. 1993, Ch. 877, Sec. 39. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23735.

23735. (a) Section 514 of the Internal Revenue Code, relating to unrelated debt-financed income, shall apply, except as otherwise provided.
(b) Section 10214 of Public Law 100-203, relating to the treatment of certain partnership allocations, shall apply to taxable years beginning on or after January 1, 1990, for property acquired by the partnership after October 13, 1987, and partnership interests acquired after October 13, 1987.
(c) An interest in a participation agreement, as defined in subdivision (i) of Section 69980 of the Education Code, shall not be treated as debt.
(Amended by Stats. 2000, Ch. 862, Sec. 97. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23736.

23736. Sections 23736.1 to 23736.4, inclusive, shall apply to any organization described in Section 23701d or Section 23701n except—
(a) A religious organization (other than a trust);
(b) An educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on;
(c) An organization which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under Section 23701d) from the United States or any state or political subdivision thereof or from direct or indirect contributions from the general public;
(d) An organization which is operated, supervised, controlled, or principally supported by a religious organization (other than a trust) which is itself not subject to the provisions of this article; and
(e) An organization the principal purposes or functions of which are the providing of medical or hospital care or medical education or medical research.
(Amended by Stats. 1961, Ch. 857.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23736.2.

23736.2. An organization described in Section 23701d which is subject to the provisions of this article, except those specified in Sections 23736, shall not be exempt from taxation under Article 1 of this chapter if it has engaged in a prohibited transaction after January 1, 1951; and an organization described in Section 23701n which is subject to the provisions of this article shall not be exempt from taxation under Article 1 of this chapter if it has engaged in a prohibited transaction after December 31, 1960.
(Amended by Stats. 1961, Ch. 857.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23736.3.

23736.3. An organization described in Section 23701n or Section 23701d, except as specified in Section 23736, shall be denied exemption under Section 23736.2 only for taxable years subsequent to the taxable years during which it is notified by the Franchise Tax Board that it has engaged in a prohibited transaction, unless such organization entered into such prohibited transaction with the purpose of diverting corpus or income of the organization from its exempt purposes, and such transaction involved a substantial part of the corpus or income of such organization.
(Amended by Stats. 2000, Ch. 862, Sec. 98. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23736.4.

23736.4. Any organization denied exemption under Section 23701d or Section 23701n by reason of the provisions of Section 23736.2 with respect to any taxable year following the taxable year in which notice of denial of exemption was received, may, under regulations prescribed by the Franchise Tax Board, file claim for exemption, and if the Franchise Tax Board pursuant to such regulations, is satisfied that such organizations will not knowingly again engage in a prohibited transaction, such organization shall be exempt with respect to taxable years subsequent to the year in which such claim is filed.
(Amended by Stats. 2000, Ch. 862, Sec. 99. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23737.

23737. In the case of any organization described in Section 23701d to which this article is applicable, exemption under Article 1 (commencing with Section 23701) shall be denied for the taxable year if the amounts accumulated out of income during the taxable year or any prior taxable year and not actually paid out by the end of the taxable year—
(a) Are unreasonable in amount or duration in order to carry out the charitable, educational, or other purpose or function constituting the basis for such organization’s exemption under Section 23701d; or
(b) Are used to a substantial degree for purposes or functions other than those constituting the basis for such organization’s exemption under Section 23701d, or
(c) Are invested in such a manner as to jeopardize the carrying out of the charitable, educational, or other purpose or function constituting the basis for such organization’s exemption under Section 23701d.
(Amended by Stats. 2000, Ch. 862, Sec. 100. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23740.

23740. Section 4911 of the Internal Revenue Code, relating to tax on excess expenditures to influence legislation, shall apply, except as otherwise provided.
(a) Section 4911(a)(1) of the Internal Revenue Code shall not apply.
(b) Section 4911(f)(4)(A) of the Internal Revenue Code shall include efforts to influence legislation with respect to acts, bills, resolutions, or similar items by the State Legislature.
(Repealed and added by Stats. 2000, Ch. 252, Sec. 34. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 2 - Taxation of Business Income of Certain Article 1 Organizations › Section 23741.

23741. Notwithstanding any other provision in this part, in the case of a church exempt from taxes imposed under this part pursuant to Article 1 (commencing with Section 23701) of Chapter 4, any rental income received, directly or indirectly, from another church exempt from taxes imposed under this part pursuant to Article 1 (commencing with Section 23701) of Chapter 4 for rental of exempt function church property is exempt from any tax imposed by this part.
(Added by Stats. 1981, Ch. 341, Sec. 1. Effective September 9, 1981. Applicable to income years beginning on or after January 1, 1981, by Sec. 2 of Ch. 341.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 3 - Returns of Exempt Organizations › Section 23771.

23771. (a) Except as provided in subdivision (b), every organization, otherwise exempt under Article 1 (commencing with Section 23701), but having income of the character described in Article 2 (commencing with Section 23731), shall file a return, verified by an executive officer under penalty of perjury in the form prescribed by the Franchise Tax Board, on or before the 15th day of the fifth month following the close of the taxable year, reporting its income from those activities and shall pay a tax as required by Section 23731 on its unrelated business taxable income as defined in Section 23732.
(b) An education IRA described in Section 23712 shall file a return described in subdivision (a) on or before the 15th day of the fourth month following the close of the taxable year.
(Amended by Stats. 2000, Ch. 862, Sec. 101. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 3 - Returns of Exempt Organizations › Section 23774.

23774. (a) Except as provided in subdivision (b), every organization exempt from filing an annual information return by reason of subdivision (a) of Section 23772, may be required to file an annual statement on or before the 15th day of the fifth calendar month following the close of the taxable year setting forth in the manner as may be required by the Franchise Tax Board the following information: the name and address of the organization, its major activities, its sources of income, and the section of the Internal Revenue Code under which it is exempt. Organizations other than those described in clause (i) and (iii) of subparagraph (A) of paragraph (2) of subdivision (a) of Section 23772 may also be required by the Franchise Tax Board to furnish information with respect to their gross receipts and their assets.
(b) Every religious organization exempt from filing an annual information return by reason of subdivision (a) of Section 23772, which because of sincerely held religious convictions refuses to file an annual statement as prescribed in subdivision (a), may submit in lieu thereof a notarized statement on its organizational letterhead containing the following information: the name and address of the organization, its major activities, its sources of income, and the section of the Internal Revenue Code under which it is exempt. That information shall be for the sole purpose of verifying the absence of unrelated business income of the organization. The statement shall be submitted on or before the 15th day of the fifth calendar month following the close of the taxable year.
(Amended by Stats. 2000, Ch. 862, Sec. 103. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 3 - Returns of Exempt Organizations › Section 23775.

23775. Except for purposes of amending the articles of incorporation to set forth a new name, under regulations prescribed by the Franchise Tax Board, the corporate powers, rights and privileges of an exempt domestic corporation may be suspended and the exercise of the corporate powers, rights and privileges of a foreign exempt corporation in this state may be forfeited if the organization fails to file the annual return or statement required under Section 23772 or 23774, or pay any amount due under Section 23703 or 23772 on or before the last day of the 12th month following the close of the taxable year.
(Amended by Stats. 2000, Ch. 862, Sec. 104. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 3 - Returns of Exempt Organizations › Section 23776.

23776. (a) Any organization which has suffered the suspension or forfeiture provided for in Section 23775 may, in accordance with Section 23305a, be relieved therefrom upon the filing of all of the following:
(1) An application for revivor.
(2) When required by the Franchise Tax Board, a new application for exemption under Section 23701.
(3) Any returns, statements, notifications, or amounts due under Sections 23772, 23774, or 23775 which were not previously submitted or paid and which resulted in the suspension or forfeiture.
(4) An information return or statement and the amounts specified under Section 23772 for each year, or part thereof, during the period of suspension or forfeiture in which the organization conducted any activities or received income, grants, gifts or any other asset.
(b) Any organization exempt from tax under Section 23701 which has suffered the suspension or forfeiture provided for in Section 23301 or 23301.5 may be required by the Franchise Tax Board to file a new application for exemption in connection with an application for revivor under Section 23305.
(Amended by Stats. 1999, Ch. 987, Sec. 92. Effective October 10, 1999.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 3 - Returns of Exempt Organizations › Section 23777.

23777. The exemption granted to any organization under the provisions of Article 1 (commencing with Section 23701) of this chapter may be revoked by the Franchise Tax Board if the organization fails to—
(a) File any return required under this chapter or pay any amount due under this part or Part 10.2 (commencing with Section 18401) on or before the last day of the 12th month following the close of the taxable year;
(b) Comply with Section 19504 (relating to powers of the Franchise Tax Board to examine records and subpoena witnesses); or
(c) Confine its activities to those permitted by the section under which the exemption was granted.
(Amended by Stats. 2000, Ch. 862, Sec. 105. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4 - Exempt Corporations › ARTICLE 3 - Returns of Exempt Organizations › Section 23778.

23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon:
(a) The filing or payment of both of the following:
(1) A new application for exemption.
(2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation.
(b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred:
(1) The organization has corrected its nonexempt activities.
(2) That it will operate in an exempt manner in the future.
(3) The payment of any tax for periods the organization was not qualified for exemption.
(Repealed and added by Stats. 2020, Ch. 59, Sec. 6. (SB 934) Effective January 1, 2021.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23800.

23800. Subchapter S of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to the tax treatment of “S corporations” and their shareholders, shall apply, except as otherwise provided.
(Amended by Stats. 2003, Ch. 268, Sec. 4. Effective January 1, 2004.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23802.5.

23802.5. (a) Section 1366(a)(1) of the Internal Revenue Code, relating to determination of shareholder’s tax liability, is modified to apply to the final taxable year of a trust or estate that terminates before the end of the corporation’s taxable year.
(b) Section 1366(d)(1)(A) of the Internal Revenue Code, relating to losses and deductions that cannot exceed shareholder’s basis in stock and debt, is modified to additionally provide that the adjusted basis of a shareholder’s stock in the “S corporation” is to be decreased by distributions by the corporation that were not includable in the income of the shareholder by reason of Section 1368 of the Internal Revenue Code.
(c) Section 1366(d)(3) of the Internal Revenue Code, relating to carryover of disallowed losses and deductions to post-termination transition period, is modified to provide that to the extent that any increase in adjusted basis described in Section 1366(d)(3)(B) of the Internal Revenue Code would have increased the shareholder’s amount at risk under Section 465 if the increase had occurred on the day preceding the commencement of the post-termination transition period, rules similar to the rules described in Section 1366(d)(3)(A) to (C), inclusive, of the Internal Revenue Code shall apply to any losses disallowed by reason of Section 465(a) of the Internal Revenue Code.
(Amended by Stats. 2003, Ch. 268, Sec. 8. Effective January 1, 2004.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23803.

23803. (a) With respect to credits that are otherwise allowed to reduce the taxes imposed under this part:
(1) The amount of any credit to be claimed shall be limited to one-third of the amount otherwise allowable.
(2) (A) Any unused portion of the credit allowable under paragraph (1) (one-third of the total credit) shall be allowed to be carried forward and may not be subject to additional reductions under paragraph (1) in later years.
(B) No carryforward shall be allowed for the portion of the credit denied under paragraph (1) (two-thirds of the total credit).
(C) Credits carried forward from taxable years beginning prior to the first taxable year in which the corporation is treated as an “S corporation” under this part, shall be reduced in accordance with paragraph (1) for that first taxable year and may not be subject to additional reductions under paragraph (1) in later years.
(D) The provisions of paragraphs (2) and (3) of subdivision (f) of Section 23802 shall be applied prior to the reduction required by paragraph (1).
(E) No portion of any credit to which this subdivision applies shall be passed through to the shareholders of the “S corporation.”
(F) The provisions of this subdivision do not affect the amount of any credit computed under Part 10 (commencing with Section 17001) for pass through to shareholders in accordance with the provisions of Section 1366 of the Internal Revenue Code.
(b) Section 1366(f) of the Internal Revenue Code, relating to special rules, shall be modified as follows:
(1) The amount of tax used to compute the loss allowed by Section 1366(f)(2) shall be the amount of tax imposed on built-in gains under this part.
(2) The amount of tax used to compute the reduction allowed by Section 1366(f)(3) shall be the amount of tax imposed on excess net passive income under this part.
(Amended by Stats. 2003, Ch. 268, Sec. 9. Effective January 1, 2004.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23804.

23804. Section 1367(b)(4) of the Internal Revenue Code, relating to adjustments in case of inherited stock, shall apply for decedents dying after December 31, 1996.
(Amended by Stats. 2003, Ch. 268, Sec. 10. Effective January 1, 2004.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23806.

23806. (a) Section 1371(a) of the Internal Revenue Code, relating to application of Subchapter C rules, is modified to provide that, notwithstanding subdivisions (a) and (e) of Sections 17024.5 and 23051.5, any election by an “S corporation” or its shareholders under Section 338 of the Internal Revenue Code, relating to certain stock purchases treated as asset acquisitions, for federal purposes shall be treated as an election for purposes of this part and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 or 23051.5 shall not be allowed.
(b) No election under Section 338 of the Internal Revenue Code, relating to certain stock purchases treated as asset acquisitions, shall be allowed for state purposes unless the “S corporation” or its shareholders made a valid election for federal purposes under Section 338 of the Internal Revenue Code.
(c) Section 1371 (d) of the Internal Revenue Code shall not apply.
(d) (1) Subdivisions (a) and (b) shall apply to any transaction occurring on or after January 1, 1998, in a taxable year beginning on or after January 1, 1997.
(2) Subdivision (c) shall apply to taxable years beginning on or after January 1, 1997.
(Amended by Stats. 2000, Ch. 862, Sec. 111. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23807.

23807. Section 1372 of the Internal Revenue Code shall be modified so that references to partnership treatment shall be to Internal Revenue Code partnership provisions, as modified by Part 10 (commencing with Section 17001).
(Added by Stats. 1987, Ch. 1139, Sec. 55. Effective September 25, 1987. Applicable to income years beginning on or after January 1, 1987, by Sec. 241 of Ch. 1139.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23808.

23808. Sections 1373 and 1379 of the Internal Revenue Code shall not be applicable.
(Amended by Stats. 1988, Ch. 11, Sec. 64. Effective February 19, 1988. Applicable to income years beginning on or after January 1, 1988, by Sec. 93 of Ch. 11.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23809.

23809. There is hereby imposed a tax on built-in gains attributable to California sources, determined in accordance with the provisions of Section 1374 of the Internal Revenue Code, relating to tax imposed on certain built-in gains, as modified by this section.
(a) (1) The rate of tax specified in Section 1374(b)(1) of the Internal Revenue Code shall be equal to the rate of tax imposed under Section 23151 in lieu of the rate of tax specified in Section 11(b) of the Internal Revenue Code.
(2) In the case of an “S” corporation that is also a financial corporation, the rate of tax specified in paragraph (1) shall be increased by the excess of the rate imposed under Section 23183 over the rate imposed under Section 23151.
(b) The provisions of Section 1374(b)(3) of the Internal Revenue Code, relating to credits, are modified to provide that the tax imposed under subdivision (a) may not be reduced by any credits allowed under this part.
(c) The provisions of Section 1374(b)(4) of the Internal Revenue Code, relating to coordination with Section 1201(a), do not apply.
(d) (1) For corporations described in paragraph (2), the provisions of Sections 1374(c)(1) and 1374(d)(7) of the Internal Revenue Code apply, based upon the effective date of the election to be treated as an “S” corporation for federal tax purposes, regardless of the date on which the corporation became an “S” corporation for state tax purposes.
(2) This subdivision applies to a corporation that, for its last taxable year beginning before January 1, 2002, was an “S” corporation for federal tax purposes and a “C” corporation for purposes of Part 10 (commencing with Section 17001), Part 10.2 (commencing with Section 18401), and this part, and, as a result of the enactment of Chapter 35 of the Statutes of 2002, is an “S” corporation for the corporation’s taxable years beginning on or after January 1, 2002.
(e) The amendments to this section made by the act adding this subdivision shall apply to taxable years beginning on or after January 1, 2002.
(Amended by Stats. 2004, Ch. 782, Sec. 1. Effective September 25, 2004. Note: Subd. (e) was added by Stats. 2004, Ch. 782.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 4.5 - Tax Treatment of S Corporations and Their Shareholders › Section 23813.

23813. Section 1377(b)(2) of the Internal Revenue Code, relating to determination defined, is modified to include, in addition to the items specified therein, the following:
(a) A decision by the State Board of Equalization that has become final.
(b) A closing agreement made under Article 6 (commencing with Section 19441) of Chapter 6 of Part 10.2.
(c) A final disposition by the Franchise Tax Board of a claim for refund.
(Added by Stats. 1997, Ch. 611, Sec. 76. Effective October 3, 1997.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 5 - Computation of Tax When Law Changed › Section 24251.

24251. The tax on any taxpayer for a period beginning in one calendar year (called “first calendar year”) and ending in the following calendar year (called “second calendar year”) where the law applicable to the computation of taxes for calendar year taxpayers for the second calendar year is different from the law applicable to computation of taxes for calendar year taxpayers for the first calendar year, shall, except as otherwise provided, be the sum of:
(a) The same proportion of a tax for the entire period, determined under the law and rates applicable to the first calendar year which the portion of the period falling within the first year is of the entire period; and
(b) The same proportion of a tax for the entire period, determined under the law and rates applicable to the second calendar year which the portion of the period falling within the second calendar year is of the entire period.
Any tax that has been paid under the law applicable to the first calendar year if in excess of the tax imposed by this section shall be refunded or credited to the taxpayer as provided in Chapter 22. Any tax in addition to that paid under the law applicable to the first calendar year made necessary by this article shall be immediately due and payable upon notice and demand from the Franchise Tax Board.
(Added by Stats. 1955, Ch. 938.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 1 - Definitions › Section 24271.

24271. (a) Section 61 of the Internal Revenue Code, relating to gross income defined, shall apply, except as otherwise provided.
(b) A distributive share of partnership gross income shall be determined in accordance with Part 10 (commencing with Section 17001).
(c) Income from an interest in an estate or trust shall be determined in accordance with Part 10 (commencing with Section 17001).
(Amended by Stats. 1993, Ch. 877, Sec. 41. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 1 - Definitions › Section 24272.

24272. For the purposes of the tax imposed under Chapter 2 (commencing with Section 23101), “gross income” includes all interest received from federal, state, municipal or other bonds.
(Amended by Stats. 1984, Ch. 193, Sec. 126.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 1 - Definitions › Section 24272.2.

24272.2. The provisions of Section 72(u) of the Internal Revenue Code, relating to the treatment of annuity contracts not held by natural persons, shall be applicable.
(Added by Stats. 1987, Ch. 1139, Sec. 58. Effective September 25, 1987. Applicable to income years beginning on or after January 1, 1987, by Sec. 241 of Ch. 1139.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 1 - Definitions › Section 24272.5.

24272.5. (a) Section 7518 of the Internal Revenue Code, relating to tax incentives relating to merchant marine capital construction funds, shall apply, except as otherwise provided.
(b) Section 7518(d)(2)(C) of the Internal Revenue Code is modified as follows:
(1) By substituting “70 percent” in lieu of the reference to “the percentage applicable under Section 243(a)(1).”
(2) To refer to Section 24402 in lieu of Section 243 of the Internal Revenue Code.
(c) Section 7518(d)(2)(D) of the Internal Revenue Code is modified to refer to “interest income exempt from taxation” under this part in lieu of “interest income exempt from taxation under Section 103.”
(d) Section 7518(g)(3) of the Internal Revenue Code is modified as follows:
(1) To refer to Article 6 (commencing with Section 19101) of Chapter 4 of Part 10.2 in lieu of Section 6601 of the Internal Revenue Code.
(2) To refer to Article 7 (commencing with Section 19131) of Chapter 4 of Part 10.2 in lieu of Section 6651 of the Internal Revenue Code.
(e) Section 7518(g)(6) of the Internal Revenue Code is modified as follows:
(1) By substituting a reference to “this part” in lieu of “Chapter 1” in each place in which it appears.
(2) To refer to Section 23151 in lieu of Section 11 of the Internal Revenue Code.
(3) The last sentence in Section 7518(g)(6)(A) of the Internal Revenue Code shall not apply.
(Added by Stats. 1997, Ch. 611, Sec. 77. Effective October 3, 1997.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 1 - Definitions › Section 24273.

24273. (a) Amounts received as loans from the Commodity Credit Corporation shall, at the election of the taxpayer, be considered as income and shall be included in gross income for the taxable year in which received.
(b) If a taxpayer exercises the election provided for in subsection (a) for any taxable year, then the method of computing income so adopted shall be adhered to with respect to all subsequent taxable years unless with the approval of the Franchise Tax Board a change to a different method is authorized.
(Amended by Stats. 2000, Ch. 862, Sec. 113. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 1 - Definitions › Section 24273.5.

24273.5. (a) Noncash patronage allocations from farmers’ cooperative and mutual associations (whether paid in capital stock, revolving fund certificates, retain certificates, certificates of indebtedness, letters of advice or in some other manner that discloses the dollar amount of such noncash patronage allocations) may, at the election of the taxpayer, be considered as income and included in gross income for the taxable year in which received.
(b) If a taxpayer exercises the election provided for in subdivision (a), the amount included in gross income shall be the face amount of such allocations.
(c) If a taxpayer elects to exclude noncash patronage allocations from gross income for the taxable year in which received, such allocations shall be included in gross income in the year that they are redeemed or realized upon.
(d) If a taxpayer exercises the election provided for in subdivision (c), the face amount of such noncash patronage allocations shall be disclosed in the return made for the taxable year in which such noncash patronage allocations were received.
(e) If a taxpayer exercises the election provided for in subdivision (a) or (c) for any taxable year, then the method of computing income so adopted shall be adhered to with respect to all subsequent taxable years unless with the approval of the Franchise Tax Board a change to a different method is authorized.
(f) If a taxpayer has made the election provided for in subdivision (c), then (1) the statutory period for the assessment of a deficiency for any taxable year in which the amount of any noncash patronage allocations are realized shall not expire prior to the expiration of four years from the date the Franchise Tax Board is notified by the taxpayer (in any manner as the Franchise Tax Board may by regulation prescribe) of the realization of gain on such allocations; and (2) that deficiency may be assessed prior to the expiration of the four-year period, notwithstanding the provisions of Section 19057 or the provisions of any other law or rule of law which would otherwise prevent such assessment.
(Amended by Stats. 2000, Ch. 862, Sec. 114. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 1 - Definitions › Section 24275.

24275. In the case of any taxpayer who is required to include the amount of any nuclear decommissioning costs in the taxpayer’s cost of service for ratemaking purposes, there shall be includable in the gross income of that taxpayer the amount so included for any taxable year.
(Amended by Stats. 2000, Ch. 862, Sec. 115. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 1 - Definitions › Section 24276.

24276. Section 90 of the Internal Revenue Code, relating to illegal federal irrigation subsidies, shall apply to water delivered to the taxpayer on or after January 1, 1988, in taxable years beginning on or after January 1, 1989, except as otherwise provided.
(Amended by Stats. 2000, Ch. 862, Sec. 116. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24301.

24301. In computing the tax imposed under this part, “gross income” does not include any of the items specified in this article.
(Repealed and added by Stats. 1955, Ch. 938.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24302.

24302. Amounts received other than amounts paid by reason of the death of the insured under life insurance, endowment or annuity contracts, either during the term or at maturity or upon surrender of the contract, equal to the total amount of premiums paid thereon. In the case of a transfer for a valuable consideration by assignment or otherwise, of a life insurance, endowment or annuity contract or any interest therein, only the actual value of such consideration and the amount of the premiums and other sums subsequently paid by the transferee shall be excluded from gross income under Section 24305 or this section. The preceding sentence shall not apply in the case of such a transfer if such contract or interest therein has a basis for determining gain or loss in the hands of a transferee determined in whole or in part by reference to such basis of such contract or interest therein in the hands of the transferor or to a corporation in which the insured is a shareholder or officer.
(Amended by Stats. 1963, Ch. 1028.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24303.

24303. Any grant made in any taxable year by the Secretary of the Treasury under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009 (Public Law 111-5) to a person that places in service specified energy property shall not be includable in the gross income or the alternative minimum taxable income of the taxpayer, but shall be taken into account in determining the basis of the property to which that grant relates, except that the basis of that property shall be reduced using rules prescribed under Section 50(c) of the Internal Revenue Code in the same manner as a credit allowed under Section 48(a) of the Internal Revenue Code, and adjusted in accordance with rules applied by the Secretary of the Treasury under Section 1603(f) of the American Recovery and Reinvestment Tax Act of 2009 (Public Law 111-5).
(Added by Stats. 2010, Ch. 14, Sec. 64. (SB 401) Effective January 1, 2011.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24305.

24305. (a) Except as provided in subdivisions (b) and (c), amounts received under life insurance policies and contracts paid by reason of the death of the insured but if such amounts are held by the insurer under an agreement to pay interest thereon, the interest payments shall be included in gross income.
(b) Proceeds of flexible premium contracts payable by reason of death shall be excluded from gross income only in accordance with the provisions of Section 101(f) of the Internal Revenue Code.
(c) (1) In the case of an employer-owned life insurance contract, any amount received by reason of death of an insured shall be excluded from gross income only in accordance with the provisions of Section 101(j) of the Internal Revenue Code.
(2) Section 101(j) of the Internal Revenue Code, relating to treatment of certain employer-owned life insurance contracts, shall apply in accordance with the provisions of Section 863(d) of the Pension Protection Act of 2006 (Public Law 109-280), relating to effective dates, except that the phrase “January 1, 2010,” shall be substituted for “the date of the enactment of this Act” contained therein.
(Amended by Stats. 2010, Ch. 14, Sec. 65. (SB 401) Effective January 1, 2011.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24308.

24308. Section 1078 of Public Law 98-369 (Tax Reform Act of 1984), relating to exclusions from gross income of payments from the United States Forest Service as a result of restricting motorized traffic in the Boundary Waters Canoe Area, shall apply, with the following exceptions:
(a) Section 1078(f)(2) of that act shall not be applicable.
(b) This section shall be effective only for payments made in taxable years beginning on or after January 1, 1985.
(Amended by Stats. 2000, Ch. 862, Sec. 119. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24308.1.

24308.1. Gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by the California Energy Commission, the Public Utility Commission, or a local publicly owned electric utility, as defined in subdivision (d) of Section 9604 of the Public Utilities Code, for any expenses paid or incurred by a taxpayer for the purchase or installation of any of the following devices:
(a) A thermal system as defined in Section 25600 of the Public Resources Code.
(b) A solar system as defined in Section 25600 of the Public Resources Code.
(c) A wind energy system device that produces electricity.
(d) A fuel cell generating system, as described in the California Energy Commission’s Emerging Renewable Resources Account Guidebook, that produces electricity.
(Added by Stats. 2002, Ch. 843, Sec. 2. Effective September 24, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24308.2.

24308.2. (a) For taxable years beginning on or after January 1, 2020, gross income does not include any amount awarded as a restaurant revitalization grant pursuant to Section 9009c of Title 15 of the United States Code.
(b) (1) Notwithstanding Section 24425, for taxable years beginning on or after January 1, 2020, paragraph (2) of Section 9673 of the American Rescue Plan Act of 2021 (Public Law 117-2) shall apply, except as provided.
(2) Paragraph (2) of Section 9673 of the American Rescue Plan Act of 2021 (Public Law 117-2) is modified by substituting the phrase “provided by paragraph (1)” with “provided by this section.”
(c) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) shall not apply to any standard, criterion, procedure, determination, rule, notice, guideline, or any other guidance established or issued by the Franchise Tax Board pursuant to this section.
(d) This section shall be operative for taxable years beginning on or after January 1, 2020.
(Added by Stats. 2022, Ch. 3, Sec. 17. (SB 113) Effective February 9, 2022.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24308.3.

24308.3. (a) For taxable years beginning on or after January 1, 2019, gross income does not include any amount awarded as a shuttered venue operator grant pursuant to Section 9009a of Title 15 of the United States Code.
(b) (1) Notwithstanding Section 24425, for taxable years beginning on or after January 1, 2019, subsection (d) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall apply, except as provided.
(2) Subsection (d) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) is modified by substituting the phrase “For purposes of the Internal Revenue Code of 1986” with “For purposes of this part”.
(3) Paragraphs (2) and (3) of subsection (d) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall not apply to an ineligible entity.
(c) For purposes of this section:
(1) “Ineligible entity” means a taxpayer that either:
(A) Is a publicly-traded company.
(B) Does not meet the reduction from the gross receipts requirements of Section 636(a)(37)(A)(iv)(bb) of Title 15 of the United States Code, as added by Section 311 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260).
(2) “Publicly-traded company” means a publicly-traded entity as described in Section 342 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260).
(d) This section shall be operative for taxable years beginning on or after January 1, 2019.
(Added by Stats. 2022, Ch. 3, Sec. 18. (SB 113) Effective February 9, 2022.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24308.4.

24308.4. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, gross income does not include a bill credit or credits received by a customer from a community water system or wastewater treatment provider pursuant to the Water and Wastewater System Payments Under the American Rescue Plan Act of 2021 (Chapter 4.7 (commencing with Section 116773) of Part 12 of Division 104 of the Health and Safety Code).
(b) This section shall remain in effect only until December 1, 2026, and as of that date is repealed.
(Added by Stats. 2022, Ch. 3, Sec. 19. (SB 113) Effective February 9, 2022. Repealed as of December 1, 2026, by its own provisions.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24308.5.

24308.5. (a) Gross income does not include cost-share payments received by forest landowners from the Department of Forestry and Fire Protection pursuant to the California Forest Improvement Act of 1978 (Part 2.5 (commencing with Section 4790) of Division 1 of the Public Resources Code) or from the United States Department of Agriculture, Forest Service, under the Forest Stewardship Program and the Stewardship Incentives Program, pursuant to the Cooperative Forestry Assistance Act, as amended (Public Law 101-624).
(b) The amount of any cost-share payment excluded pursuant to subdivision (a) shall not be considered with regard to either of the following:
(1) Determining the basis of property acquired or improved.
(2) Computing any allowable deduction to which the taxpayer may otherwise be entitled.
(Added by Stats. 1994, Ch. 22, Sec. 3. Effective March 25, 1994. See same-numbered section added by Stats. 2022, Ch. 3.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 6 - Gross Income › ARTICLE 2 - Exclusions › Section 24308.5.

24308.5. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, gross income does not include a bill credit or credits received by a customer from a utility applicant pursuant to the California Arrearage Payment Program Under the American Rescue Plan Act of 2021 (Article 12 (commencing with Section 16429.5) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code).
(b) This section shall remain in effect only until December 1, 2026, and as of that date is repealed.
(Added by Stats. 2022, Ch. 3, Sec. 20. (SB 113) Effective February 9, 2022. Repealed as of December 1, 2026, by its own provisions. See same-numbered section added by Stats. 1994, Ch. 22.)