Section 19148 Of Article 7. Penalties And Additions To Tax From California Revenue And Taxation Code >> Division 2. >> Part 10.2. >> Chapter 4. >> Article 7.

. (a) Notwithstanding Sections 19142 to 19147, inclusive, the addition to the tax with respect to any underpayment of any installment shall not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of that installment equals or exceeds the applicable percentage specified in Section 19144 of the amount determined under subdivision (b).
  (b) The amount determined under this subdivision for any installment shall be determined in the following manner:
  (1) Take the net income for all months during the taxable year preceding the filing month.
  (2) Divide that amount by the base period percentage for all months during the taxable year preceding the filing month.
  (3) Determine the tax on the amount determined under paragraph (2).
  (4) Multiply the tax computed under paragraph (3) by the base period percentage for the filing months and all months during the taxable year preceding the filing month.
  (c) For purposes of this subdivision:
  (1) The base period percentage for any period of months shall be the average percent which the net income for the corresponding months in each of the three preceding taxable years bears to the net income for the three preceding taxable years.
  (2) "Filing month" means the month in which the installment is required to be paid.
  (3) This subdivision shall only apply if the base period percentage for any six consecutive months of the taxable year equals or exceeds 70 percent.
  (4) The Franchise Tax Board may by regulations provide for the determination of the base period percentage in the case of reorganizations, new corporations, and other similar circumstances.