AB 897 Signed by Governor – Simplifies State Tax-Exemption Process

On September 26, 2007, Governor Schwarzenegger signed AB 897 introduced by Assembly Member Guy Houston (R-San Ramon).  AB 897 eliminates the requirement of an organization that has received recognition of exempt status under Section 501(c)(3) of the Internal Revenue Code to file a separate application for state tax exemption with the Franchise Tax Board (FTB).  The organization must, however, submit to the FTB its favorable IRS determination letter approving the organization’s exemption under 501(c)(3).  The effective date of state tax-exempt status shall be no later than the effective date of the organization’s federal tax-exempt status (i.e., typically the date of incorporation).

Read the chaptered bill here.