California – CA Legislative Committee Holds Informational Hearing on Lucent and Administering California’s Technology Transfer Agreement Law

Lexology – USA February 3, 2017


On January 30, 2017, the California Legislature Assembly Committee on Revenue and Taxation held an informational hearing on “Life after Lucent: Administering California’s Technology Transfer Agreement Law.” The California State Board of Equalization (SBE) and the Board’s staff are currently wrestling with the meaning of the Technology Transfer Act (TTA) provisions in sections 6011 and 6012 of the Revenue and Taxation Code in connection with implementation of the California Court of Appeal decision in Lucent Technologies v. Board of Equalization, 241 Cal. App. 4th 19 (2015). The January 30 hearing demonstrates that the Legislature is now apparently interested in this issue.

The hearing attempted to present a measured view of the Lucent TTA issues and future developments. It is unclear at this point what action the Legislature may take on this topic, but the committee’s chair stated he anticipated this hearing to be the first of many on the broad subject of tax and technology. The committee showed interest in how other states are addressing these issues and if perhaps the “true object” test, which applies to transactions involving both tangible personal property (TPP) and services, may be utilized in transactions involving both TPP and intangible property rights.

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