CSTC works closely with a Legislative Consultant to keep an eye on important bills that would affect taxpayers and small business owners.

In April and May, the legislature will work steadily to move bills as multiple deadlines are approaching. Please find a summary of tracked bills and the status of each below.

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BILLS RELATING TO THE TAX PROFESSION

Note that many of these bills, if signed into law, are applicable only in certain tax years. IE: taxable years 2023 through 2037. The exact years depend on the bill and may change as bills are amended. Additionally, many are subject to a 2/3, rather than a majority, vote.

AB 1249 (Gallagher): Income taxes: gross income exclusions: wildfires. Allows a gross income exclusion for settlement amounts from the Fire Victims Trust and authorizes the refund of overpayments from prior tax years.
Status: In the Senate, Referred to the Government and Finance Committee 

AB 1623 (Ramos): Personal income taxes: exclusion: uniformed services retirement pay: survivor benefit plan payments. Excludes from gross income retirement pay received by a taxpayer over age 60 from the federal government for service performed in the uniformed services. Also excludes from gross income annuity payments received by a qualified taxpayer pursuant to a United States Department of Defense Survivor Benefit Plan during the taxable year. This bill would take effect immediately if signed into law.
Status: In the Assembly Revenue & Taxation committee 

AB 1771 (Ward): The California Housing Speculation Act: income taxes: capital gains: sale or exchange of qualified asset: housing. Imposes an additional tax on "qualified taxpayers" at specified rates on the net capital gain from the sale or exchange of real property. This bill would take effect immediately if signed into law.
Status: In the Assembly Revenue & Taxation committee 

AB 1864 (Gipson): Income Taxation: credits: small business employers. Allows a credit to businesses with fewer than 49 employees equal to $434 for each new employee who lives within 5 miles of the employee’s primary worksite. This bill would take effect immediately if signed into law.
Status: In the Assembly Revenue & Taxation committee 

AB 1890 (Choi): Income taxes: credits: COVID-19 supplemental paid sick leave. Allows a tax credit for employers for the expenses of complying with specified COVID-19 supplemental paid sick leave requirements.
Status: In the Assembly Revenue & Taxation committee

AB 2035 (Villapudua): Taxation: credits: California New Employment Credit. Allows restaurants, theaters, and bars that are not considered small businesses to claim New Employment Credit. A 2/3 vote is required to pass; this bill would take effect immediately if signed into law.
Status: In the Assembly Revenue & Taxation committee 

AB 2065 (Blanca Rubio): Income taxes: net operating losses: businesses. Authorizes, for taxable years beginning on or after January 1, 2023, a net operating loss carryback for a NOL or carryover of NOL for which a deduction was suspended for a "qualified taxpayer."
Status: In the Assembly Revenue & Taxation committee 

AB 2227 (O’Donnell): Income taxes: credits: intermodal equipment manufacturing. Establishes a tax credit of up to 6 percent for manufacturers of truck chassis and trailers built in California. Would take effect immediately if signed into law.
Status: In the Assembly Revenue & Taxation committee 

AB 2289 (Lee): Wealth Tax: False Claims Act. Impose an annual “wealth tax” on households with net worths of more than $50 million with a 1% annual wealth tax.
Status: Referred to the Assembly Revenue & Taxation and Judiciary committees

AB 2378 (Irwin): Personal income taxes: credit: employer: qualified wages. Allows a personal income tax credit for employees hired on or after January 1, 2023 who are a vocational rehabilitation referral, qualified SSI recipient, or qualified SSDI recipient. Would take effect immediately if signed into law.
Status: Referred to the Assembly Revenue & Taxation committee 

AB 2589 (Santiago): Earned Income Tax Credit: one-time stimulus payment. Provides, upon appropriation, a child tax credit payment of $2,000 per qualifying child to qualified recipients.
Status: In the Assembly Revenue & Taxation committee 

AB 2620 (Valladares): Income taxes: credits: telecommuting: transfer of funds. Allows a tax credit for certain telecommuting employees.
Status: In the Assembly Revenue & Taxation committee 

AB 2922 (Low): Income taxes: Taxpayers’ Bill of Rights. A placeholder bill related to the Taxpayers’ Rights Advocate’s responsibilities for coordinating resolution of taxpayer complaints and problems, including regarding unsatisfactory treatment of taxpayers by Franchise Tax Board employees.
Status: Not yet assigned to a committee – may not move forward 

SB 485 (Portantino): Income taxes: tax credits: Motion picture credit extension. Extends the Film and TV Tax Credit 3.0, authorizing the California Film Commission to allocate $330 million in tax credits each fiscal year from 2024-25 to 2029-30. This bill would take effect immediately if signed into law.
Status: To the Assembly; not yet assigned to a committee. Has not moved since January.

SB 1266 (Borgeas): Income taxes: credits: designated wildfire zones. Allows a tax credit for the purchase of a backup electricity generator or a solar battery for use in a residence or commercial property in a designated wildfire zone. This bill would take effect immediately if signed into law.
Status: In the Senate Governance and Finance committee

SB 1301 (Becker): Corporation Tax Law: climate resiliency surcharge. Imposes a surcharge upon entities that provided fossil fuel financing that exceeds the fossil fuel financing threshold, as defined. This bill would take effect immediately if signed into law.
Status: In the Senate Governance and Finance committee 

SB 1374 (Borgeas): Personal income taxes: deduction. California qualified tuition program. Allows a deduction against gross income in the amount equal to the monetary contribution made by a qualified taxpayer to the California qualified tuition program. This bill would take effect immediately if signed into law.
Status: Passed the Senate Governance and Finance committee, in the Appropriations Committee 

SB 1411 (Melendez): Personal income taxes: exclusion: uniformed services: retirement pay. Provides an income exclusion for retirement pay received by members of the uniformed services.
Status: Passed the Senate Governance and Finance committee, in the Appropriations Committee 

SB 1484 (Grove): Income taxes: credits: qualified first-year wages: homeless youth: foster or former foster youth. Allows a tax credit in an amount equal to either 40% or 25% of the amount paid or incurred by a qualified taxpayer for qualified first-year wages of qualified employees. The bill would define “qualified employee” to mean an employee who is hired on or after January 1, 2023, and who is a homeless youth, foster youth, or former foster youth.
Status: In the Senate Governance and Finance committee 

BILLS RELATING TO BUSINESSES

AB 2932 (Low): Employment: workweek. Workweek: hours and overtime. Modifies the standard workweek to 32 hours for companies with more than 500 workers for the same pay rate. Employees working more than 32 hours would be compensated at a rate of at least 1.5 times the regular rate of pay. A similar federal bill, H.R. 4728, was introduced in July 2021 but has not moved forward.
Status: Referred to the Labor & Employment Committee

SB 951 (Durazo): Unemployment insurance: contribution rates: disability insurance: paid family leave: weekly benefit amount. This bill would increase the wage replacement benefits provided under the State Disability Insurance and Paid Family Leave programs, link wage replacement benefits to an individual’s earnings (with lower-wage workers getting a higher wage replacement rate), and eliminate provisions creating a taxable wage ceiling, thus subjecting all wages earned by workers to the SDI tax.
Status: In the Appropriations Committee 

SB 1044 (Durazo): Employers: state of emergency or emergency condition: retaliation. Prohibits an employer from taking or threatening any adverse action against any employee for refusing to report to, or leaving, a workplace because the employee feels unsafe due to a state of emergency or an emergency condition and allows employees to access their cell phones to use in emergencies to assess the situation, seek assistance or communicate with a person to verify their safety.
Status: In the Appropriations Committee

SB 1162 (Limón): Employment: Salaries and Wages. Requires the disclosure of salary ranges on job postings, mandates internal promotional opportunities are made available to current employees, and, for private employers with 100 or more employees hired through labor contractors, requires reporting pay data broken down by race, ethnicity, and sex.
Status: In the Judiciary Committee

SB 1458 (Limón): Workers’ compensation: disability benefits: gender disparity. Would increase the payment of disability benefits by the percentage of disparity in earnings between genders, as specified. The bill would apply prospectively to injuries occurring on or after January 1, 2023.
Status: In the Labor, Public Employment & Retirement

FEDERAL BILLS OF INTEREST

The bills below have obtained no action since their June 2021 introduction.

HR 3737 (Filemon):Tax-preparer Enforcement, Accountability, and Minimum Standards Act (TEAMS Act). Authorizes the Treasury Department to regulate tax return preparers, including by sanctioning preparers for incompetence and disreputable behavior and by establishing minimum competency standards.

HR 4184 (Panetta):Taxpayer Protection and Preparer Proficiency Act of 2021. An almost identical bill to HR 3737, this bill also authorizes the Treasury Department to regulate tax return preparers, including by sanctions for incompetence and disreputable behavior and by establishing minimum competency standards.

PREVIOUSLY TRACKED STATE BILLS NO LONGER VIABLE

AB 91 (Valladares): Taxation: corporations: minimum franchise tax: limited liability companies: annual tax: small businesses: microbusinesses. Would reduce the $800 annual minimum franchise tax to $400 for small businesses and $200 for micro businesses. This bill would take effect immediately if signed into law.

AB 248 (Choi): Income taxes: credits: cleaning and sanitizing supplies: COVID-19. Allows for a tax credit for the purchase of cleaning and sanitizing supplies used at businesses to prevent COVID transmission. This bill would take effect immediately if signed into law.

AB 249 (Choi): Income tax credits: research credit. This bill increases the state tax credit allowed for research activities. This bill would take effect immediately if signed into law.

AB 704 (Mayes):Personal income taxes: deduction: qualified education loans. Would remove the annual student loan interest deduction cap of $2,500 by expanding the tax deduction allowed for interest paid on qualified education loans under the Personal Income Tax Law. This bill would take effect immediately if signed into law.

AB 820 (Cooley): Corporation Tax Law: banks and financial corporations: exclusions: interest income. This bill excludes interest income from taxation generated by banks issuing loans to businesses with 50 or fewer full- time employees that experienced at least 10% net income loss from 2020 to 2021. This bill would take effect immediately if signed into law.

AB 952 (Mathis): Income taxes: passive activities: forest management costs. Provides that the limitations on passive activity losses and credits do not apply to forest management costs of up to $25,000. This bill would take effect immediately if signed into law.

AB 1146 (Cervantes):California Small Business Rent Relief Act. Authorizes a county to establish a small business rent forgiveness and tax relief program, which provides county tax credits to commercial property owners that forgive small business tenants’ unpaid rent.

AB 1400 (Kalra): Guaranteed Health Care for All. This bill, and the companion ACA 11 which funds the program, establish the California Guaranteed Health Care for All or CalCare as California’s single-payer health care coverage program.

AB 1572 (Committee on Jobs, Economic Development, and the Economy): Personal income taxes: corporation taxes: credits: California New Markets Tax Credit. Allows a California New Markets Tax Credit under the Personal Income Tax and Corporation Tax Law, capped at $100 million per calendar year. The tax credit is meant to attract new private capital for investments in very low-income neighborhood. This bill would take effect immediately if signed into law.

AB 1605 (Burke): Income taxes: voluntary contributions: California Domestic Violence Victims Voluntary Tax Contribution Fund. Creates the California Domestic Violence Victims Voluntary Tax Contribution Fund and allows individuals to contribute to the Fund via their tax returns.
Status: This bill has not moved since January and the author is no longer in office. It’s possible no other author will pick it up and it will not pass.

AB 1612 (Burke): Taxation: Federal Consolidated Appropriations Act, 2021: Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act: shuttered venue operator grants. This bill would exclude from gross income any amount received in the form of a federal shuttered venue operator grant. A 2/3 vote is required to pass this bill.
Status: Please see above note for AB 1605 

AB 1993 (Wicks): Employment: COVID-19 vaccination requirements. Would have mandated every employer to require each employee or independent contractor to provide proof to the employer that the person has been vaccinated against COVID-19 unless the person is ineligible for vaccination due to a medical condition or disability or sincerely held religious belief.
Status: The author is not moving the bill forward 

AB 2829 (Low): Formerly related to tax credits, this bill was amended to pertain to grants for small businesses undergoing a certified access specialist inspection.

ACA (Assembly Constitutional Amendment) 11: Taxes to fund health care coverage and cost control.
Would have imposed an annual tax of 2.3% on businesses that have at least $2 million in annual revenue, plus a 1.25% tax on payroll for companies with at least 50 employees and a 1% tax for those employers who pay employees at least $49,900.
Status: The author’s legislation on this issue already failed and he noted a lack of support for this amendment.