Details of Public Law 117-58, section 80401 , Infrastructure Investment and Jobs Act, Private Activity Bonds for Qualified Broadband Projects

Under the Personal Income Tax Law (PITL), California does not conform to IRC section 142 or 146, regarding interest on governmental obligations. For California purposes, bond interest from certain sources such as California state bonds, municipal bonds issued by a county, city, town, or other local government in the state, or housing authority bonds for projects in the state, including private activity bond interest is not taxed. Under the Corporation Tax Law (CTL), California requires all interest received from federal, state, municipal, or other bonds to be included in gross income. California does not conform to the new designation for tax exempt facility bonds issued for qualified broadband projects.

Tax exempt facility bonds are administered through the California State Treasurer’s Office who would be responsible for monitoring the volume cap. Therefore, the volume cap does not impact Franchise Tax Board.