NRAI Compliance Updates

NRAI Compliance Updates - July, 2004

Greetings,

It has been an active legislation season with regards to business entities. New statutes have taken effect July 1, 2004 in the following states:

Colorado http://www.state.co.us/gov_dir/leg_dir/olls/sl2004a/sl_343.htm

Hawaii http://www.businessregistrations.com/lawchanges/2002legislature.htm

Idaho http://www3.state.id.us/oasis/H0671.html#billtext

Massachusetts http://www.mass.gov/legis/laws/seslaw03/sl030127.htm

This is the same information we gave you last month but it bears repeating now that the Statutes have become effective. Colorado, has revised its’ policy regarding requiring online filings only. They do have a have an “introductory online fee” of $0.99 on most filings done online as opposed to the full fee for paper filings. For those who handle Massachusetts matters the new Chapter 156D that replaces Chapter 156B is worth a read through.

Legislation of note this month is as follows:

Federal Legislation

SB 2604

A bill to amend the Internal Revenue Code of 1986 to reduce the recognition period for built-ins gains for subchapter S corporations.

Current Text:

108th CONGRESS
2d Session
S. 2604
To amend the Internal Revenue Code of 1986 to reduce the recognition period for built-in gains for subchapter S corporations.
IN THE SENATE OF THE UNITED STATES
June 24, 2004
Mr. SMITH (for himself and Mr. BREAUX) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL
To amend the Internal Revenue Code of 1986 to reduce the recognition period for built-in gains for subchapter S corporations.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. REDUCED RECOGNITION PERIOD FOR BUILT-IN GAINS.
(a) IN GENERAL- Paragraph (7) of section 1374(d) (relating to definitions and special rules) is amended to read as follows:
`(7) RECOGNITION PERIOD- The term `recognition period' means the 7-year period beginning with the 1st day of the 1st taxable year for which the corporation was an S corporation. For purposes of applying this section to any amount includible in income by reason of distributions to shareholders pursuant to section 593(e), the preceding sentence shall be applied without regard to the duration of the recognition period in effect on the date such distribution.'.
(b) EFFECTIVE DATE-
(1) GENERAL RULE- The amendment made by this section shall apply to any recognition period in effect on or after the date of the enactment of this Act.
(2) SPECIAL APPLICATION TO EXISTING PERIODS EXCEEDING 7 YEARS- Any recognition period in effect on the date of the enactment of this Act, the length of which is greater than 7 years, shall end on such date.

Bill History:
6/24/2004 Read twice and referred to the Committee on Finance

State Legislation

Alaska

An Act adopting the Uniform Electronic Transactions Act; repealing certain statutes relating to electronic records and electronic signatures; amending Rule 402, Alaska Rules of Evidence; and providing for an effective date.

Full Text available at: http://www.legis.state.ak.us/basis/get_bill_text.asp?hsid=HB0285Z&session=23

Bill History:
06/25/04 (h) 3:46 pm 6/25/04 transmitted to governor
06/30/04 (h) signed into law 6/29 chapter 110 SLA 04
06/30/04 (h) effective date(s) of law 7/1/04

California

HJR 79

This measure urges the United States Securities and Exchange Commission to implement its proposed shareholder participation rules in order to answer the call for badly needed reform, to improve corporate accountability, to restore investor confidence, and to provide shareholders with increased access to proxy to promote greater board oversight of corporate operations and responsiveness to shareholder concerns.

Full Text available at: http://www.leginfo.ca.gov/pub/bill/asm/ab_0051-0100/ajr_79_bill_20040610_chaptered.html

Bill History:
Resolution Chapter 92
Filed With Secretary Of State June 10, 2004
Adopted In Senate June 7, 2004
Adopted In Assembly May 20, 2004
Amended In Assembly May 20, 2004

AB 1143

An act to amend Section 1985.3 of the Code of Civil Procedure, relating to Internet communications. Existing law establishes the procedures by which a party may seek to produce personal records maintained by certain professionals and business entities in a civil action, as specified. This bill would establish new procedures for the production by an interactive computer service of online consumer information, as specified. The bill would further make a specified statement of legislative intent with regard to those services and good faith procedures.

Full Text available at: http://www.leginfo.ca.gov/pub/bill/asm/ab_1101-1150/ab_1143_bill_20040621_amended_sen.html

Bill History:
Amended In Senate June 21, 2004
Amended In Senate June 15, 2004
Amended In Senate July 8, 2003
Amended In Senate July 2, 2003
Amended In Assembly May 20, 2003
Amended In Assembly May 13, 2003
Amended In Assembly April 30, 2003
Amended In Assembly April 10, 2003
Introduced February 21, 2003

AB 1338

Personal income and bank and corporation taxes: real estate withholding requirements.

Existing law requires the transferee of a California real property interest, in specified circumstances, to withhold 31/3% of the purchase price of the property when the property is acquired from either an individual or a corporation that has no permanent place of
business in this state after the transfer.

This bill would revise withholding requirements for corporations with no permanent place of business in California to conform to the withholding requirements for individual transferors.

This bill would also clarify that transfers of real property to controlled corporations and partnerships as contributions to capital, and sales of a decedent's principal residence by estates, are not subject to these withholding requirements.

This bill would also authorize the Franchise Tax Board to administer the withholding procedures, as provided.

Full Text available at: http://www.leginfo.ca.gov/pub/bill/asm/ab_1301-1350/ab_1338_bill_20040702_amended_sen.html

Bill History:
Amended In Senate July 2, 2004
Amended In Senate June 17, 2004
Amended In Senate June 26, 2003
Amended In Senate June 12, 2003
Amended In Assembly May 1, 2003
Amended In Assembly April 22, 2003
Introduced February 21, 2003

Florida

SB 2718

An act relating to the Florida Business Corporation Act; amending s. 607.1302, F.S.; clarifying a corporate action entitling a shareholder to certain appraisal rights and payments for shares; creating s. 607.1330, F.S.; providing requirements, procedures, and limitations on court actions; providing for entitlement to certain judgments; requiring corporate payments under certain circumstances; amending s. 607.1407, F.S.; revising certain notice requirements for dissolved corporations; revising a procedure to clarify an exemption for certain claims against dissolved corporations being barred; correcting a cross reference; reenacting ss. 607.1106(1)(g) and (2), 607.1107(2)(b), 607.1109(1)(g), and 607.1321(1), F.S., relating to effect of merger or share exchange, merger or share exchange with foreign corporations, articles of merger, and notice of intent to demand payment, to incorporate the amendment to s. 607.1302, F.S., in references thereto; providing an effective date.

Full Text available at: link

Bill History:
06/24/2004 Approved By Governor; Chapter No. 2004-378
06/16/2004 Signed By Officers And Presented To Governor
04/30/2004 (S) Ordered Enrolled -Sj 01740
04/30/2004 (H) Read Third Time -Hj 01225; Passed; Yeas 117 Nays 0 -Hj 01226
04/29/2004 (H) Received, Placed On Calendar -Hj 01088; Substituted For Hb 1035 -Hj 01104; Read Second Time -Hj 01104
04/26/2004 (H) In Messages
04/24/2004 (S) Read Third Time -Sj 00880; Passed As Amended; Yeas 37 Nays 0 -Sj 00880
04/23/2004 (S) Placed On Special Order Calendar -Sj 00868; Read Second Time -Sj 00785; Amendment(S) Adopted -Sj 00785; Ordered Engrossed -Sj 00785
04/20/2004 (S) Placed On Calendar, On Second Reading -Sj 00698
04/19/2004 (S) Favorable With 1 Amendment(S) By- Commerce, Economic Opportunities, And Consumer Services; Yeas 10 Nays 0 -Sj 00698
04/14/2004 (S) Now In Commerce, Economic Opportunities, And Consumer Services -Sj 00581; On Committee Agenda-- Commerce, Economic Opportunities, And Consumer Services, 04/19/04, 11:30 Am, 412-K
04/13/2004 (S) Favorable By Governmental Oversight And Productivity; Yeas 10 Nays 0 -Sj 00581
04/08/2004 (S) On Committee Agenda-- Governmental Oversight And Productivity, 04/13/04, 2:45 Pm, 110-S
03/30/2004 (S) Favorable By Judiciary; Yeas 8 Nays 0 -Sj 00438; Now In Governmental Oversight And Productivity -Sj 00438
03/25/2004 (S) On Committee Agenda-- Judiciary, 03/30/04, 9:00 Am, 110-S
03/16/2004 (S) Introduced, Referred To Judiciary; Governmental Oversight And Productivity; Commerce, Economic Opportunities, And Consumer Services -Sj 00313
03/02/2004 (S) Filed

New Jersey

AB 3110

Limits the corporation business tax application of net operating losses to 50% of taxable income for tax years 2004 and 2005.

Full Text available at: http://www.njleg.state.nj.us/2004/Bills/AL04/47_.PDF

Bill History:
6/21/2004 Introduced, Referred to Assembly Budget Committee
6/21/2004 Reported out of Assembly Committee, 2nd Reading
6/24/2004 Passed by the Assembly (46-33-0)
6/24/2004 Received in the Senate without Reference, 2nd Reading
6/24/2004 Substituted for S1715
6/24/2004 Passed Senate (Passed Both Houses) (22-18)
6/29/2004 Approved P.L.2004, c.47.

AB 3052 or SB 1717

Provides that non-bank may use "bank" in its name under certain circumstances.

Full Text available at: http://www.njleg.state.nj.us/2004/Bills/A3500/3052_S1.PDF

Bill History:
6/17/2004 Introduced, Referred to Assembly Financial Institutions and Insurance Committee
6/21/2004 Reported out of Assembly Comm. with Amendments, 2nd Reading
6/24/2004 Passed by the Assembly (78-0-1)
6/24/2004 Received in the Senate without Reference, 2nd Reading
6/24/2004 Substituted for S1717 (1R)
6/24/2004 Passed Senate (Passed Both Houses) (35-4)
7/1/2004 Approved P.L.2004, c.77

SB 1776 or A3131

Establishes a State tax clearance process for certain businesses operators that use State licenses to conduct business and for other holders of licenses from State agencies.
An Act providing a State tax clearance process for certain businesses and holders of licenses from State agencies, amending and supplementing P.L.1995, c.158 and amending R.S.54:50-9.

Full Text available at: http://www.njleg.state.nj.us/2004/Bills/A3500/3131_S1.PDF

Bill History:
6/21/2004 Introduced, Referred to Assembly Budget Committee
6/21/2004 Reported out of Assembly Committee, 2nd Reading
6/24/2004 Passed by the Assembly (46-31-1)
6/24/2004 Received in the Senate without Reference, 2nd Reading
6/24/2004 Substituted for S1776
6/24/2004 Passed Senate (Passed Both Houses) (40-0)
6/29/2004 Approved P.L.2004, c.58.

New York

AN ACT to amend the state finance law, the general business law, the
civil practice law and rules, the limited liability company law, the partnership law, the business corporation law, the estates, powers and trusts law and the not-for-profit corporation law, in relation to doing business under an assumed name and publication of notice relating to such businesses; to repeal certain provisions of section 130 of the general business law relating to filing certificates by persons conducting business under an assumed name or as partners; and to repeal subdivision (m) of section 121-1502 of the partnership law relating to the ability of a foreign limited liability partnership to bring an action in the courts of this state.

Requires businesses operating in this state under an assumed name to file a certificate with the secretary of state which shall include information of the locations where business is transacted, the names of the principals of the business and the type of business organization; authorizes individuals, partnerships and unincorporated associations to comply with such requirement by filing such certificate with the county clerk where the principal place of business is located; makes all provisions relating to operating a business under an assumed name applicable to limited partnerships and limited liability companies; imposes fees for the filing, amendment and discontinuance of such certificates; provides for the allocation of revenue derived from such fees and establishes the county clerks filing fee reimbursement account; requires the publishing of all such certificates and certain information therein to be published in local newspapers for three weeks.

Full Text available at: http://assembly.state.ny.us/leg/?bn=S03398&sh=t

Bill History:
03/25/2003 Referred To Finance
04/14/2003 Amend And Recommit To Finance
04/14/2003 Print Number 3398a
06/13/2003 Amend (T) And Recommit To Finance
06/13/2003 Print Number 3398b
06/16/2003 Amend (T) And Recommit To Finance
06/16/2003 Print Number 3398c
06/18/2003 Amend (T) And Recommit To Finance
06/18/2003 Print Number 3398d
01/07/2004 Referred To Cities
01/12/2004 Recommit, Enacting Clause Stricken

North Carolina

SB 51

An act to close a loophole that allows corporations to continue avoiding franchise taxes and to remove provisions that could result in franchise taxes on unrelated limited liability companies.

Full Text at: http://www.ncga.state.nc.us/html2003/bills/AllVersions/Senate/S51vc.html

Bill History:
06/29/2004 [S] Pres. To Gov. 6/29/2004
07/09/2004 [S] Signed By Gov. 7/8/2004
07/09/2004 [R] Ch. SL 2004-74

Rhode Island

HB 8691

This act would allow financial institutions with capital stock to convert to a general business corporation and would provide a procedure to be followed for unclaimed property, when a financial institution converts to a general business corporation. This act would take effect upon passage.

Full Text available at: http://www.rilin.state.ri.us/Billtext/BillText04/HouseText04/H8671.pdf

Bill History:
06/18/2004 Introduced, referred to House Corporations

HB 8694

This act would extend the business corporation tax benefits for certain qualifying businesses relocating from out of state, provided the businesses fit certain criteria. This act would take effect upon passage.

Full Text available at: http://www.rilin.state.ri.us/Billtext/BillText04/HouseText04/H8694.pdf

Bill History:
06/23/2004 Introduced, referred to House Finance

SB 3232

This act would provide that a taxpayer may claim a tax credit against the costs of renewing, modifying, or maintaining ISO 9000 or 14000 certification. This act would take effect on July 1, 2005.
Full Text available at: http://www.rilin.state.ri.us/Billtext/BillText04/SenateText04/S3232.pdf

Bill History:
06/25/2004 Senate read and passed

Previous issues of the NRAI Newsletter may be found at: http://secure.nrai.com/dynamic_frame.asp?page=research

NRAI's Customized Tax Compliance Solutions
As an NRAI client, you can easily access NRAI’s tax calendar from your online Client Services account. Your company's tax information can be searched, sorted and compiled into entity-specific tax calendars. NRAI’s Customized Tax Calendar provides jurisdiction tax / report filing due dates, forms availability and tax rates / fees for each entity. Search results allow immediate access to many online tax forms and reports. Site links to jurisdictions offering electronic filing are also included. Your tax department can build a tax calendar for each distinct area of responsibility. Deadlines and requirements can be monitored to ensure filings are promptly completed. The Email Notification (or “tickler”) feature is also included as another way to help ensure your corporate compliance.
For more information regarding Customized Tax Compliance solutions or to have a Client Services Representative activate your Tax Calendar Email Notification service, contact National Registered Agents, Inc. at 800.550.6724 or info@nrai.com

About NRAI

National Registered Agents, Inc. (NRAI) is a professional Registered Agent for new and established business entities. NRAI is fully licensed to maintain Registered Office and receive legal process for companies throughout the United States and around the globe.

The NRAI Network encompasses 23 operating affiliates, with more than 400 associates, and 36 offices nationwide. The Network is focused on providing comprehensive corporate and public record information, research, retrieval, filing, and corporate services for both law firms and corporate legal departments.

For more information regarding NRAI services, please contact us at 800.550.6724 or info@nrai.com