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taxable year in issue) and income year would also have been the
same, and, thus, the franchise tax based on its second year's
income would have accrued on December 31, 1988. We agree.
None of our prior opinions dealt with a situation where the
income year and the taxable year would have been the same for
purposes of the franchise tax as it applied prior to December 31,
1960. However, that is the result of applying section 23222(a)
of the California code, as it existed prior to the 1972
amendment, to the facts of this case. Pursuant to that section,
the franchise tax for petitioner's first taxable year ended
December 31, 1987, would have been computed on income earned
during that period and would have been payable to the State for
the privilege of exercising the corporate franchise for the same
period. This franchise tax based on income received during the
first year would have been due regardless of whether petitioner
exercised its privilege after the close of its first year.
Because petitioner's first taxable year for franchise tax
purposes was for a period of less than 12 months, prior to the
1972 amendment, Cal. Rev. & Tax Code sec. 23222(a) would have
required petitioner to pay a franchise tax based on its income
for the second year for the privilege of exercising the corporate
franchise during the second year. The franchise tax liability
based on income earned during the second year would not have
depended upon the occurrence of an event subsequent to the end of
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