Tax Glossary

Measures inflation in California and is calculated by the California Department of Industrial Relations.

Real property, personal property, stocks and bonds and other property held by a taxpayer. Examples of property that are not considered capital assets include copyrights and inventory held for sale.

Expenditures for capital assets such as buildings, roads, airports, land, etc.

Income or profit from the sale of capital assets.

Represents an appropriation for any acquisition of land or other real property, major construction, improvements, equipment, designs, plans and specifications, lease purchase agreement, and the request for and exercise of a purchase option.

Allowed in federal law for net operating losses and certain credits. Permits net losses in excess of income or credits in excess of tax liability to be "carried back" to earlier tax years, so that tax for those years may be recomputed and refunds may be claimed. Carrybacks are not permitted under California law other than casualty losses from certain designated disaster areas.

In cases where a tax benefit from a credit, deduction or other write-off exceeds the allowable amount for a particular year, carryover permits the excess amounts to be preserved and applied against income or tax liability in subsequent tax years.

California Consumer Price Index

Term used in Proposition 13. Refers to a transfer of real property. Upon a change in ownership, real property is reassessed to its full cash value as of the date of transfer.
Several exceptions apply including inter-spousal transfer of a principal residence to a surviving spouse, or certain transfers between parents and children, grandparents and grandchildren, and registered domestic partners.

Donations to specified nonprofit organizations or activities that taxpayers are permitted to make on their state tax returns. Taxpayers remit the amount of voluntary contributions in addition to amount of tax due or as an application of a refund due on the return. Often called "check-offs".

Technical follow-up bill that often follows a major piece of legislation. Usually deals with erroneous cross-references, chaptering problems, legislative clarification of misinterpretations of the original bill, and other corrections.

A measure of inflation. Can either refer to the United States Consumer Price Index calculated by the United States Department of Commerce or the California Consumer Price Index (CCPI) calculated by the Department of Industrial Relations.

Generic term for a tax on commodities and transactions where the burden falls on the consumer in the price paid for goods and services, such as a sales tax.

A tax imposed upon a corporation's right to do business in California. It is measured by a corporation's net earnings, but not imposed based on income.

Consumer Price Index (the U.S. Index)

Amount that can be subtracted from the actual amount of tax owed, usually in the income tax. Credits represent tax expenditures aimed at benefiting specific groups (e.g., senior credit) or inducing certain behavior (e.g., an investment tax credit).

Corporation Tax