As amended on April 1, 2014, Assembly Bill 2372 proposes that a 'change of ownership' in real property held by a legal entity will occur if 100% of that legal entity's interest is sold or transferred within a three-year period, even if no one person or entity acquires more than 50% of the entity’s ownership interests. Such a change of ownership would trigger property tax reassessment for the property. Additionally, the bill would impose significant reporting requirements regarding the transfer of legal entity interests. A.B. 2372 is substantially similar to A.B. 188, which was introduced last year and died in committee.
The proposed changes would create significant tax and business concerns for companies operating in California.