Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2018

Property Tax Annotations

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Annotation 220.0081

220.0081 Corporate Property Transfers. Property transferred between public benefit corporations is excluded under Revenue and Taxation Code section 62(a)(2) if the members of the transferor corporation were identical to the members of the transferee corporation before and after the transfer. In the event that neither corporation has members, section 62(a)(2) applies if the transferor corporation's board of directors was identical to the transferee corporation's board of directors both before and after the transfer. Although the plain language of sections 62(a)(2) and 64 each require the tracking of ownership interests in legal entities, it is reasonable to equate public benefit corporation membership, or directorship when there are no members, to ownership for purposes of section 62(a)(2) and section 64. The members or directors of the transferee corporation then become "original co-owners" in the surviving entity and each member or director's percentage of ownership is measured by his or her voting interest percentage. If a voting interest change of more than 50 percent in the members or directors of the public benefit corporation occurs, there would be a change in ownership of the property previously excluded under section 62(a)(2). If a single member or director obtains more than 50 percent of the voting interest, the public benefit corporation would undergo a change in control pursuant to section 64(c)(1).

Section 64(b) is inapplicable to public benefit corporations because public benefit corporations cannot meet the definition of an affiliated group since they do not issue stock, and therefore, cannot be connected through stock ownership. C 8/5/1983; C 6/2/2010.