SB 1113: Corporate tax: exclusions: qualifying shipping activities.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

The Corporation Tax Law, in conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.

Existing federal income tax law authorizes a qualifying vessel operator, as defined, to elect to determine its corporate tax burden for specified international shipping activities using a per-ton rate and provides an exclusion from gross income for qualifying shipping activities of an electing corporation or a member of an electing group, as specified.

This bill, for taxable years beginning on or after January 1, 2026, would provide an exclusion from gross income for qualifying shipping activities of an electing corporation or a member of an electing group for which an election is in effect under the above-described federal law, as specified. The bill would also provide special rules relating to depreciation and basis of a qualifying vessel, as defined, and would, in conformity with federal income tax laws, provide for the nonrecognition of gain from the disposition of a qualifying vessel where the electing corporation acquires a replacement qualifying vessel, as provided.

This bill would take effect immediately as a tax levy.

Sponsors

Sponsors by party (alphabetical): Republican 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. May 14, 2026May 14 hearing: Held in committee and under submission.
2. May 12, 2026Set for hearing May 14.
3. May 11, 2026May 11 hearing: Placed on APPR. suspense file.
4. May 7, 2026Set for hearing May 11.
5. May 6, 2026From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 4154.) (May 6). Re-referred to Com. on APPR.
6. April 9, 2026Set for hearing May 6.
7. April 8, 2026Re-referred to Com. on REV. & TAX.
8. March 23, 2026From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.
9. February 26, 2026Referred to Com. on RLS.
10. February 18, 2026From printer. May be acted upon on or after March 20.
11. February 17, 2026Introduced. Read first time. To Com. on RLS. for assignment. To print.