Section 198 of the Internal Revenue Code, relating to expensing of environmental remediation costs, is modified as follows:
(a) For expenditures paid or incurred before January 1, 2004, all of the following shall apply:
(1) If a taxpayer has, at any time, made an election for federal purposes under Section 198(a) of the Internal Revenue Code to have Section 198 of the Internal Revenue Code apply to a qualified environmental remediation expenditure, Section 198 of the Internal Revenue Code shall apply to that qualified environmental remediation expenditure for state purposes, a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5, and the federal election shall be binding for purposes of this part.
(2) If a taxpayer fails to make an election for federal purposes under Section 198(a) of the Internal Revenue Code to have Section 198 of the Internal Revenue Code apply to a qualified environmental remediation expenditure, an election under Section 198(a) of the Internal Revenue Code shall not be allowed for state purposes, Section 198 of the Internal Revenue Code shall not apply to that qualified environmental remediation expenditure for state purposes, and a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5.
(b) No inference as to the proper treatment for purposes of this part of qualified environmental remediation expenditures paid or incurred in taxable years beginning before January 1, 1998, shall be made.
(c) Section 198(h) of the Internal Revenue Code, relating to termination, shall not apply.
(d) Section 198 of the Internal Revenue Code, relating to expensing of environmental remediation costs, shall not apply to expenditures paid or incurred after December 31, 2003.
(Amended by Stats. 2005, Ch. 691, Sec. 33. Effective October 7, 2005.)
Last modified: October 25, 2018