Legal Entity Ownership Program (LEOP) – Frequently Asked Questions

  1. What is a change in ownership for legal entities?
  2. What is a change in control of a legal entity?
  3. What property is subject to reassessment if a change in ownership or a change in control has occurred?
  4. Once a change in control or a change in ownership has occurred, does this cause an automatic reassessment of the California real property owned by the acquired legal entity?
  5. What is the form BOE-100-B and do I have to file the form?
  6. Why did I receive the form BOE-100-B?
  7. What is the filing period if there is insufficient information to determine if a change in control or ownership has occurred due to the death of an interest holder?
  8. If the legal entity is not located in California, do I still need to file form BOE-100-B?
  9. If the acquired legal entity did not own or lease real property in California on the date of acquisition, am I still required to file form BOE-100-B?
  10. Am I required to file form BOE-100-B if an exclusion from reassessment is applicable to the transfer?
  11. I have already filed form BOE-100-B for this legal entity. Why did I receive another form and do I need to complete this form as well?

  1. What is a change in ownership for legal entities?

    In general, there are two types of transfers involving legal entities that result in a change in ownership of California real property owned by the legal entity. One type of transfer is the transfer of interest in real property to and by a legal entity. This involves a transfer of an interest in real property between a corporation, partnership, LLC, or other entity and a shareholder, partner, or any other person (including another entity) that results in a change in ownership of the real property transferred. Note: This type of transfer should be reported to the local county assessors' office where the real property is located, not with the State Board of Equalization (BOE).

    The second type of transfer is the transfer of ownership interest in a legal entity that owns real property. A change in ownership of the real property owned by the legal entity occurs upon either of the two transfer events described below.

    (1) If a person or legal entity acquires more than 50 percent of the ownership interest in a legal entity, there is a change in ownership of the real property owned by the acquired legal entity. This type of transfer is referred to as a change in control.

    (2) A transfer of ownership interest in a legal entity that results in a cumulative transfer of more than 50 percent of original co-owner interests* in that entity is a change in ownership of the real property owned by the entity. This type of transfer is referred to as a change in ownership.

    Note: A transfer of ownership interest in a legal entity that results in a change in control or change in ownership must be reported to the BOE on form, BOE-100-B

    Additional information may be found on the Legal Entity Ownership Program webpage located at www.boe.ca.gov/proptaxes/leop.htm.

Back to Top

  1. What is a change in control of a legal entity?

    A change in control occurs when a person or entity obtains more than 50 percent of the ownership interest in the legal entity; ownership interest is represented by voting stock for corporations, capital and profits for partnerships and limited liability companies. A transfer of ownership interest in a legal entity that results in a change in control of that entity is a change in ownership of the California real property owned by the entity as of the date of the change in control.  (See Revenue and Taxation Code section 64(c).) Control may be obtained directly or indirectly.

    Direct Control:  A person or entity obtains direct control of an entity when it acquires more than 50 percent of the voting stock of a corporation, when it acquires a majority (more than 50%) ownership interest in any partnership or LLC capital and profits, or when it acquires more than 50 percent of the total ownership interest in any other entity.

    Indirect Control: A person or entity may obtain indirect control of an entity by acquiring direct control of another entity that, in turn, directly or indirectly controls another entity.

  1. What property is subject to reassessment if a change in ownership or change in control has occurred?

    The property that will be subject to reassessment is interest in real property located in California that is owned or held under lease (under certain circumstances) by the acquired legal entity and any of its subsidiaries, as of the date of the change in control. However, if a legal entity has undergone a change in ownership, the interest in real property is only the property previously excluded from reassessment under Revenue and Taxation Code section 62(a)(2). It includes all real property (for example, land, buildings, structures, and fixtures) owned and real property that is leased by the acquired entity from a government entity (that is, city, county, state, or federal agency) for any term or real property leased from a private owner under a long term lease with a remaining term of 35 years or more.

Back to Top

  1. Once a change in control or a change in ownership has occurred, does this cause an automatic reassessment of the California real property owned by the acquired legal entity?

    No.  Although the transfer may be deemed a change in ownership or change in control, it may qualify for one of the exclusions from reassessment for legal entity transfers. The law provides for several exclusions; specific information on exclusions is available through the LEOP information page in the section on Exclusions from Reassessment on the Legal Entity Ownership Program webpage at www.boe.ca.gov/proptaxes/leop.htm.

  1. What is the form BOE-100-B and do I have to file the form?

    Form BOE-100-B, Statement of Change in Control and Ownership of Legal Entities, is used by the BOE to obtain information to determine whether a transfer of interest in a legal entity has triggered a change in control or ownership that results in the reassessment of the California real property owned by the entity, and whether an exclusion from change in ownership applies. Failure to file in either circumstance noted above will result in application of penalty pursuant to Revenue and Taxation Code section 482(b).

    1. Whenever there is a change in ownership or a change in control of a legal entity and the legal entity owned an interest in California real property as of that date, the person or legal entity acquiring ownership control or the legal entity that has undergone a change in ownership must file a statement with the Board. (See Revenue and Taxation Code sections 480.1 and 480.2.)
    2. When an entity is requested by the BOE to file regardless of whether or not a change in control or ownership of the legal entity has occurred or whether the legal entity owned an interest in real property.

    The acquiring person or legal entity is required to file form BOE-100-B within 90 days of the change in control or the legal entity that has undergone a change in ownership must file. However, any person or legal entity that receives a form BOE-100-B must complete and file the BOE-100-B with the BOE. Note: If a written request to file is made by the BOE, form BOE-100-B must be filed within 90 days, regardless of whether a change in control or ownership of the legal entity has occurred. (See Revenue and Taxation Code sections 480.1 and 480.2.)

Back to Top

  1. Why did I receive the form BOE-100-B?

    The BOE obtained information indicating that your legal entity may have undergone a change in control or ownership. It may have been based on information reported on the Franchise Tax Board (FTB) income tax return for your entity. If you answered "yes" to any one of the three tax return questions, the BOE sends form BOE-100-B.

Back to Top

  1. What is the filing period if there is insufficient information to determine if a change in control or ownership has occurred due to the death of an interest holder?

    In general, the date of death is deemed to be the date of the change in control or ownership (See Property Tax Rule 462.260). Thus, a legal entity must file form BOE-100-B within 90 days of the change in control or change in ownership. In situations where there is insufficient information to determine whether an entity has undergone a change in control or change in ownership as of the date of death, (for example, final distribution of the legal entity interests has not been determined) the filing of a form BOE-100-B must be made within 90 days of the date of death containing as much information as the parties have available to them. An amended form BOE-100-B must be filed within 90 days after the reporting entity or individual obtains information confirming the final distribution of the legal entity interests resulting in a change in control or change in ownership of the entity in order to avoid the imposition of the penalty.

Back to Top

  1. If the legal entity is not located in California or has dissolved, do I still need to file form BOE-100-B?

    Yes.  Although the legal entity may be located outside California or as dissolved, the law requires any person or legal entity to complete and file form BOE-100-B upon the request by the BOE. If there has been a change in control or change in ownership, the acquired entity's real property in California may be subject to reassessment, regardless of whether the legal entity filing the form is located in California or not. In the case of a dissolution of a legal entity, the entity may have dissolved after the time period in question the form.

Back to Top

  1. If the acquired legal entity did not own or lease real property in California on the date of acquisition, am I still required to file form BOE-100-B?

    Yes. Although the acquired legal entity or any of its subsidiaries did not own or lease real property in California, you must still file form BOE-100-B upon request from the BOE.

  1. Am I required to file form BOE-100-B if an exclusion from reassessment is applicable to the transfer?

    A legal entity form BOE-100-B must be filed within 90 days of the change in control or change in ownership regardless of whether or not an exclusion from reassessment is applicable.

Back to Top

  1. I have already filed form BOE-100-B for this legal entity. Why did I receive another form and do I need to complete this form as well?

    Yes.  If you are in receipt of another request to file form BOE-100-B for an entity you have already filed for, there are several reasons why this could have occurred.  For example, it may be for a different time period; questions 1, 2 and 3 of the first page of the form identifies the period from which information is requested. However, regardless of the reason, you are required to complete and return the requested information. If you believe this is a duplicate request, you may include a copy of the prior filing along with a letter explaining the situation.