§ 23305.1. — 23305.1. (Amended by Stats. 2023, Ch. 209, Sec. 7.)

California § 23305.1.

• Jurisdiction: California
• Code RTC: Revenue and Taxation Code - RTC
• Div. 2.: DIVISION 2. OTHER TAXES
• Part 11.: PART 11. CORPORATION TAX LAW
• Ch. 2.: CHAPTER 2. The Corporation Franchise Tax
• Art. 7.: ARTICLE 7. Suspension and Revivor

Text

(a)
A taxpayer may make application to the Franchise Tax Board for relief from the voidability provisions of Section 23304.1. To be relieved from voidability, the taxpayer shall do all of the following:
(1)
Provide the Franchise Tax Board with an application for relief from contract voidability in a form and manner prescribed by the Franchise Tax Board.
(2)
Include on the application the period for which relief is requested in accordance with subdivision (b).
(3)
File any tax returns required to be filed under this part with the Franchise Tax Board, including returns for the period for which
relief is requested.
(4)
Pay any tax, additions to tax, penalties, interest, and any other amounts owing to the Franchise Tax Board, including any liability attributable to the period for which relief is requested.
(5)
Pay any penalty imposed under subdivision (b) for the period for which relief is requested.
(6)
In the case of a taxpayer that applies for and enters into an approved voluntary disclosure agreement in accordance with Article 8 (commencing with Section 19191) of Chapter 4 of Part 10.2, for purposes of this section, the taxpayer shall be considered to have met the requirements of paragraphs (3), (4), and (5) if the taxpayer fulfills to the satisfaction of the Franchise Tax Board all the specifications of the voluntary disclosure agreement within the meaning of paragraph (2) of subdivision (d) of Section
19191 and if the Franchise Tax Board has not found that any of the circumstances described in Section 19194 has rendered the voluntary disclosure agreement null and void.
(b)
(1)
Except as provided in paragraph (2), both of the following shall apply:
(A)
The period for which relief is requested shall begin on the date that one of the taxpayer’s taxable years begins and ends on the date that relief is granted.
(B)
The Franchise Tax Board shall assess a daily penalty equal to one hundred dollars ($100) for each day of the period for which relief from voidability is granted, but not to exceed a total penalty equal to the amount of the tax for the period for which relief is requested.
(2)
If an application for relief from voidability
is filed for a period in which an application for revivor has been filed and the certificate of revivor has been issued, all of the following shall apply:
(A)
The period for which relief is requested shall begin on the date the taxpayer’s powers, rights, and privileges had been suspended or forfeited and ends on the date relief is granted.
(B)
The Franchise Tax Board shall assess a daily penalty equal to one hundred dollars ($100) for each day of the period for which relief from voidability is granted, but not to exceed a total penalty equal to that amount of the tax that would be imposed under Sections 17941 and 17942 or Section 23151 and, except as provided in subparagraph (C), that penalty shall be equal to no less than the amount of the minimum tax provided under Section 17941 or 23153 for the period for which relief is requested.
(C)
In the case of an exempt organization or trust subject to Article 2 (commencing with Section 23731) of Chapter 4 (the tax on unrelated business taxable income), the daily penalty provided in subparagraph (B) shall not exceed a total penalty equal to the amount of tax imposed upon its unrelated business taxable income for the period for which relief is requested.
(3)
Any penalty imposed under this subdivision shall, subject to Section 23305.2, be due and payable on demand by the Franchise Tax Board.
(c)
(1)
Upon satisfaction of the conditions specified in subdivision (a), including through the application of Section 23305.2, the following shall apply:
(A)
All contracts entered into during the period for which relief is granted that
have not been rescinded by a final court order pursuant to Section 23304.5 may be enforced in the same manner and to the same extent, with regard to both the parties to the contract and any third parties, as if the contract had never been voidable.
(B)
Any sale, transfer, or exchange of real property in California during the period for which relief is granted and which the taxpayer at that time was not entitled to sell, transfer, or exchange by reason of subdivision (d) of Section 23302 and which has not been rescinded by a final court order pursuant to Section 23304.5, shall be as valid as if the taxpayer had not been subject to subdivision (d) of Section 23302 at the time of the sale, transfer, or exchange.
(2)
Upon being granted relief from voidability, the Franchise Tax Board shall certify that relief to the taxpayer in a form and manner as prescribed by the Franchise Tax
Board. The certificate shall be issued or mailed to the taxpayer, or as directed by the taxpayer, and shall indicate the period for which relief is granted.
(d)
The fact that a certificate of relief from voidability was issued pursuant to this section and the information contained on that certificate shall be subject to public disclosure. The certificate shall be prima facie evidence of the relief from voidability for contracts entered into during the period of relief stated on the certificate and the certificate may be recorded in the office of the county recorder of any county of this state.
(e)
Subject to limitations set forth in Section 17 of Chapter 926 of the Statutes of 1990, a taxpayer that received a certificate of revivor between January 1, 1990, and January 1, 1991, may apply for relief from voidability under this section.

Legislative History

Amended by Stats. 2023, Ch. 209, Sec. 7. (AB 1765) Effective January 1, 2024.