AB 1171: Personal income taxes: return filing extension.

Existing law authorizes the Franchise Tax Board to grant a reasonable extension of time for filing any return, declaration, statement or other document required by the Personal Income Tax Law in the manner and form determined by the Franchise Tax Board. Except as specified, existing law prohibits an extension for more than 6 months. If any taxpayer fails to make and file a return required by the Personal Income Tax Law on or before the due date of the return or the due date as extended by the Franchise Tax Board, then, unless it is shown that the failure is due to reasonable cause and not due to willful neglect, a specified penalty is required to be added. Existing law also requires a specified penalty to be imposed against any partnership required to file a return that fails to file at the prescribed time as determined with regard to any extension of time for filing, as provided.

This bill, for taxable years beginning on or after January 1, 2017, would authorize an extension for no more than 7 months for partnerships. The bill would also declare the intent of the Legislature that, for the 2016 taxable year only, the Franchise Tax Board is required to presume reasonable cause and not willful neglect in the case of any partnership filing an income tax return if that partnership meets specified requirements.

This bill would declare that it is to take effect immediately as an urgency statute.