Taxation: information returns: vacant commercial real property.

Plain English Breakdown

The exact penalty for failing to report is not specified in the official source material.

Tax Rules for Vacant Commercial Real Property

This law requires owners of commercial real property in California to report if their buildings are vacant, imposes penalties for not reporting, and provides data on vacant properties.

What This Bill Does

• Requires owners of commercial real property to register with the Department of Tax and Fee Administration.
• Makes it necessary for these owners to file an annual information return about their property, including whether any part of the building was empty last year.
• Allows extensions for filing if there is a good reason.
• Imposes penalties on those who do not report or delay reporting.
• Requires the Department to post data online each year showing how many commercial properties were vacant in different areas.

Who It Names or Affects

• Owners of commercial real property in California
• The Department of Tax and Fee Administration

Terms To Know

Commercial Property

Buildings or land used for business purposes, like offices or stores.

Information Return

A form that property owners must fill out each year to give information about their commercial real estate.

Limits and Unknowns

• The bill does not specify the exact amount of penalties for failing to report.
• It is unclear how many people will be affected by this requirement.
• This law will end on January 1, 2031.

Official Summary Text

SB 789, as amended, Menjivar.
Taxation: information returns: vacant commercial real property.
Except as provided, the California Constitution requires that all property be taxed in proportion to its full value and assessed at the same percentage of fair market value. Existing statutory law, the Documentary Transfer Tax Act, authorizes the imposition of a tax by a county or city, as provided, with respect to specified instruments that transfer specified interests in real property. Existing law establishes the California Department of Tax and Fee Administration for the purpose of administering various taxes.
This bill would require a person, as defined, that owns commercial property, as defined, in this state to register with the department, as provided. The bill would require every person owning commercial real property in this state to file an information return each year by a date determined by the department, as provided. The bill
would require the information return to include specified information, including, among other requirements, whether any buildings or portions of buildings were vacant in the previous calendar year. The bill would authorize extensions of the time for a person to file an information return under specified circumstances, including for good cause. The bill would impose
a civil penalty in an unspecified amount
on any person who fails or refuses to timely furnish a return required by its
provisions, as provided.
provisions a penalty of $100 per commercial property
that the person fails or refuses to timely furnish the information return.
The
bill, upon appropriation,
bill
would
require that a civil penalty collected under its provisions be used to repay any amounts received as a loan from the General Fund, as provided.
authorize the Director of Finance to make a loan from the General Fund to the department to implement those provisions, and would require any loan to be repaid from revenues from penalties imposed. By authorizing the expenditure of moneys from the General Fund for specified purposes, the bill would create an appropriation.
This bill would require the department to collect information from the
information returns filed pursuant to its provisions and would require the department to annually post on its internet website data aggregated by ZIP Code, including, among other information, the percentage of commercial properties included in information returns required under this part that were vacant in a calendar year.
The bill would repeal these provisions as of January 1, 2031. The bill would also make findings and declarations related to its provisions.

Current Bill Text

Download Bill PDF