(a)
(1)For taxable years beginning prior to January 1, 2000, income shall be computed on the basis of the taxpayer’s income year.
(2)For taxable years beginning on or after January 1, 2000 (other than the first taxable year beginning on or after that date), income shall be
computed on the basis of the taxpayer’s taxable year.
(3)As provided in paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, for the first taxable year beginning on or after January 1, 2000, income shall be computed on the basis of both the preceding income year and the current taxable year.
(b)For purposes of this part, the term “income year” or “taxable year” (as applicable) means—
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(a)
(1)
For taxable years beginning prior to January 1, 2000, income shall be computed on the basis of the taxpayer’s income year.
(2)
For taxable years beginning on or after January 1, 2000 (other than the first taxable year beginning on or after that date), income shall be
computed on the basis of the taxpayer’s taxable year.
(3)
As provided in paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, for the first taxable year beginning on or after January 1, 2000, income shall be computed on the basis of both the preceding income year and the current taxable year.
(b)
For purposes of this part, the term “income year” or “taxable year” (as applicable) means—
(1)
The taxpayer’s annual accounting period, if it is a calendar year or a fiscal year;
(2)
The calendar year, if subsection (g) applies; or
(3)
The period for which the return is made, if a return is made
for a period of less than 12 months.
(c)
For purposes of this part, the term “annual accounting period” means the annual period on the basis of which the taxpayer regularly computes its income in keeping its books.
(d)
For purposes of this part, the term “calendar year” means a period of 12 months ending on December 31st.
(e)
For purposes of this part, the term “fiscal year” means a period of 12 months ending on the last day of any month other than December. In the case of any taxpayer who has made the election provided by subsection (f), the term means the annual period (varying from 52 to 53 weeks) so elected.
(f)
(1)
A taxpayer who, in keeping its books, regularly computes its income on the basis of an annual period which varies
from 52 to 53 weeks and ends always on the same day of the week and ends always—
(A)
On whatever date such same day of the week last occurs in a calendar month, or
(B)
On whatever date such same day of the week falls which is nearest to the last day of a calendar month,
may (in accordance with the regulations prescribed under paragraph (3)) elect to compute its income for purposes of this part on the basis of such annual period. This paragraph shall apply to taxable years ending after December 31, 1954.
(2)
(A)
In any case in which the effective date or the applicability of any provision of this part is expressed in terms of taxable years beginning or
ending with reference to a specified date which is the first or last day of a month, a taxable year described in paragraph (1) shall be treated—
(i)
As beginning with the first day of the calendar month beginning nearest to the first day of such taxable year, or
(ii)
As ending with the last day of the calendar month ending nearest to the last day of such taxable year, as the case may be.
(B)
In the case of a change from or to a taxable year described in paragraph (1)—
(i)
If such change results in a short period (within the meaning of Section 24634) of 359 days or more, or less than seven days, Section 24636 shall not apply;
(ii)
If such change results in a short period of less than seven
days, such short period shall, for purposes of this part, be added to and deemed a part of the following taxable year; and
(iii)
If such change results in a short period to which Section 24634 applies, the income for such short period shall be placed on an annual basis for purposes of such subsection by multiplying such income by 365 and dividing the result by the number of days in a short period, and the tax shall be the same part of the tax computed on the annual basis as the number of days in the short period is of 365 days.
(3)
The Franchise Tax Board shall prescribe such regulations as it deems necessary for the application of this subsection.
(g)
Except as provided in Section 24634 (relating to returns for periods of less than 12 months), the taxpayer’s taxable year shall be the calendar year if—
(1)
The taxpayer keeps no books;
(2)
The taxpayer does not have an annual accounting period; or
(3)
The taxpayer has an annual accounting period, but such period does not qualify as a fiscal year.