The “Personal Income Tax Law” (formerly the Personal Income Tax Act) was enacted and became effective on June 13, 1935. With certain specific exceptions (Sections 17121-17136) the original statute imposed a tax upon the entire net income of residents and upon the net income of nonresidents derived from sources within the State. Notwithstanding the numerous amendments up to 1943, the statute remained basically unchanged. During the so-called war period (1943-1948, inclusive) temporary tax relief was granted in the form of reduced rates and increased exemptions in 1943; the personal exemptions were again increased in 1945 and the 1943 temporary rates and exemptions were made permanent. In 1949 the temporary rates ceased and the permanent rates became effective.

In 1943 the Legislature (Stats. 1943, p. 2354) incorporated the Personal Income Tax Act into the Revenue and Taxation Code as Part 10 of Division 2 thereof. Section 2 of said laws repealed the incorporated act and Section 3 provided that the codification was not effective until July 1, 1945.

Section 1 of the Laws of 1945, Chapter 645, repealed Section 3 of the 1943 law and provided that the 1943 law was to become effective on the effective date of the 1945 law. The latter became effective on June 5, 1945, and, thus, the Personal Income Tax Law became effective on June 5, 1945, as Part 10 of Division 2 of the Revenue and Taxation Code.

The original provisions, notwithstanding repeal, have been continued as part of the Revenue and Taxation Code, the same as if the old provisions had been in code form since 1935.

In 1955 the Legislature (Chapters 939 and 1590) completely revised the taxing provisions of the Personal Income Tax Law so that the language of the sections adopted and their sequence would conform to the Internal Revenue Code of 1954. However, in enacting such law many provision of the Internal Revenue Code were omitted. Also as a part of such revision the law in effect prior to January 1, 1955, was designated the “Personal Income Tax Law of 1954.” Accordingly, when referring to the law which was in effect prior to January 1, 1955, in order to distinguish between existing law and former law, after the section number add, “Personal Income Tax Law of 1954.”

The following regulations are applicable to taxable years commencing after December 31, 1954, except as otherwise specifically stated in the text of the regulations. The regulation numbers are the same as the sections of the Personal Income Tax Law which are being implemented, interpreted or made specific.

The regulations issued by this department and other State agencies are now being published by the Division of Administrative Procedure in the California Administrative Code and Register; the regulations contained in Subchapter 2.5 of Chapter 3 of Title 18 of the California Administrative Code and are distributed by the State of California, Documents Section, P.O. Box 1612, Sacramento, California, 9507.

The regulations issued by the department relating to the “Personal Income Tax Law of 1954,” are contained in Subchapter 2* of Chapter 3 of Title 18 of the California Administrative Code.

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* Former Subchapter 2 entitled “Corporation Income Tax” originally printed April 3, 1948 (Title 18). Repealer filed February 18, 1952, as an emergency designated to be effective on the thirtieth day thereafter and declared not applicable to any period prior to July 1, 1951 (Register 27, No. 4).