CA AB1040

Expands the definition of "change in ownership" for real property owned by legal entities to include situations where more than a specified percentage of direct or indirect ownership interests are sold or transferred in a single transaction, regardless of whether any party obtains control.

Requires the Franchise Tax Board to add a question on partnership, bank, and corporation returns to identify when more than the specified percentage of ownership interests are sold or transferred in a single transaction, multiple transactions within 36 months, or among related persons.

Increases penalties for failure to file required change in ownership statements from 10% to 15% of applicable taxes for legal entity ownership transfers.

Requires the State Board of Equalization to notify assessors when a change in control or change in ownership of a legal entity has occurred and to report to the Legislature by January 1, 2021, on the implementation and economic impact of these changes.

Applies a two-thirds vote requirement in the Legislature and takes effect immediately as a tax levy.