The governor of California has signed AB 154, which selectively conforms the California Revenue and Taxation Code to specified provisions of the Internal Revenue Code enacted as of January 1, 2015. This is a significant change from current California law, which conforms to the Internal Revenue Code enacted as of January 1, 2009. AB 154 also provides for additional relief from the LCUP. The bill is an urgency statute that is generally operative for taxable years beginning on or after January 1, 2015.

On September 30, 2015, Governor Brown signed Assembly Bill (AB) 154 (Ting), Stats. 2015, c. 359, which enacted two conformity provisions, as well as a provision to provide additional penalty relief regarding the large corporate understatement penalty (LCUP) set forth in Revenue and Taxation Code section 19138. The first conformity provision changes California’s general “specified date” of conformity to federal income tax law in the California Revenue and Taxation Code from January 1, 2009, to January 1, 2015, for taxable years beginning on or after January 1, 2015. The second conformity provision generally conforms California law to the federal net operating loss (NOL) rules, which allow corporations expecting an NOL carryback to extend the time for payment of taxes for the preceding taxable year.