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CSTC works closely with a Legislative Consultant to keep an eye on important bills that would affect taxpayers and small business owners. NEWS AND UPDATES IN BRIEF
READING THIS REPORT Bills greyed out are no longer moving forward, were amended significantly and are no longer relevant, or have been signed into law. They will not be tracked any longer unless so requested. As a reminder, many tax-related bills would, if signed into law, take effect immediately rather than on January 1, 2024. And some require a 2/3, rather than a majority, vote to pass. Click here to find your California Representative BILLS OF INTEREST | TAX FOCUSAB 14 (Davies) |Personal Income Tax: credit: childcare costs. A former placeholder bill was amended to provide additional credit for taxpayers who qualify for the existing Federal child and dependent care expense credit. AB 17 (Alanis) | Personal Income Tax: rate. A former placeholder bill was amended to revise the income tax rates and taxable income brackets by imposing an income tax rate of 4% instead of 6% or 8% between 2023 and 2028. AB 26 (Mike Fong) | Personal Income Tax Law: exclusion: federal student loan debt relief plan. Excludes from a person’s gross income any amount of qualified student loan debt discharged under the federal student loan debt relief plan. This bill only becomes operatives upon the enactment of legislation that would conform to federal law. New | AB 35 (Committee on Budget) | Personal Income Tax Law: exclusion: student loan debt. Would exclude from an individual’s gross income, from 2021 through 2026, the amount of certain student loans discharged in conformity with federal law. AB 59 (Gallagher) |Taxation: renter’s credit. This bill increases, contingent upon an appropriation in the Budget Act, the number of taxpayers that qualify for the Renter's Credit by expanding qualifying income limits; also makes the credit refundable upon appropriation. The Franchise Tax Board anticipates significant costs associated with the bill and notes that “implementing this bill would require robust changes to existing information, processing systems, tax forms, and instructions, as well as providing taxpayer outreach.” AB 84 (Ward) | Property tax: welfare exemption: affordable housing. Allows property owners to receive the welfare property tax exemption at the time of purchase for land developed and used for low-income housing. AB 259 (Lee) | Wealth Tax: False Claims Act. Establishes the Wealth Tax Advisory Council; imposes an annual tax at a rate of 1.5% of a resident’s “worldwide net worth” in excess of $1,000,000,000, or in excess of $500,000,000 in the case of a married taxpayer filing separately; allows the taxation of former residents who relocated to other states; any related provisions. A similar bill failed. AB 441 (Haney) | Credit: young child tax credit: foster youth tax credit: periodic payments. A former placeholder bill that now requires the Franchise Tax Board to establish a program for making periodic payments from the Tax Relief and Refund Account to those eligible to receive an earned income tax credit, a young child tax credit, or a foster youth tax credit. New | AB 514 (Patterson)| Personal Income Tax Law: retired police dogs: tax credit. Allows a refundable credit of $1,500 for a taxpayer that has adopted retired police dogs. AB 769 (Bauer-Kahan) | Personal Income Tax Law: Corporation Tax Law: credits: carbon reduction. This bill would give businesses that meet certain standards a credit against their taxes. These businesses must have emissions levels of criteria air pollutants (like smog) at least 5% below what is required by the federal Clean Air Act. The credit amount would be equal to $800 per ton of pollutants reduced beyond the baseline amount. AB 877 (Addis) | Income taxes: credit: lodging for displaced persons. Would create the “The Good Neighbor Tax Credit” to allow businesses such as hotels and motels to receive a tax credit when they offer free overnight stays to displaced persons during a state of emergency. The amount of the credit would be equal to the cost of the overnight stay times the number of nights occupied, subject to a maximum amount per room. AB 1026 (Ta) |Personal income taxes: deduction: California qualified tuition program. Would allow a deduction against gross income for contributions to the California-qualified tuition program established by the Golden State Scholarshare Trust Act. AB 1066 (Patterson) |Personal income taxes: rates. A placeholder bill related to personal income taxes. AB 1105 (Petrie-Norris) | Personal Income Tax Law: Corporation Tax Law: sale of net operating losses. Would allow a startup innovator to sell a net operating loss to an unrelated taxpayer. AB 1128 (Santiago) | Personal Income Tax Law: young child tax credit: qualifying child. This bill would make payments from the Tax Relief and Refund Account to those with an eligible income, meaning those who have qualifying children who meet certain criteria. It would also remove the requirement that a qualifying child has to be younger than 6 as of the last day of the taxable year and it provides the option to receive advanced and periodic payments for both the California Earned Income Tax Credit and the Young Child Tax Credit, as well as give assurance that these payments would not be considered income for determination of eligibility for public assistance programs. AB 1397 (Low) | Taxation: penalties. A placeholder bill with the intention of enacting legislation relating to the review and revision of the Tax Code to ensure penalties are commensurate to code violations. AB 1400 (Bryan) | College Access Tax Credit Fund. A placeholder bill related to the College Access Tax Credit Fund. AB 1498 (Gipson) |Personal income tax: Earned Income Tax Credit. This bill would ensure that individuals eligible for the CalEITC get at least a $300 credit. AB 1527 (Zbu) Taxation. A placeholder bill related to taxation. AB 1576 (Wallis) Personal Income Tax Law: Corporation Tax Law: disregarded entities: credit limitation. This bill would allow certain credits to disregarded entities. ACA 3 (Lee) | Wealth tax: appropriation limits. A proposed state constitutional amendment allowing for the tax contemplated in AB 259. Requires a 2/3 vote, as does AB 259. HR 8 (Pietrie-Norris) | Relative to Enrolled Agents’ Day. An Assembly Resolution recognizing February 15, 2023, as Enrolled Agents' Day to commemorate the contributions of professional enrolled agents for over 50 years to California taxpayers. SB 1 (Glazer) | Personal Income Tax Law: exclusions: student loan forgiveness. Excludes from gross income any student loan amount waived, canceled, or otherwise forgiven by the United States Department of Education pursuant to a specified federal student debt relief plan. SB 25 (Skinner) | Personal Income Tax Law: exclusion: student loan debt. Declaration of candidacy: notary. This bill was amended and now relates to candidates for public office. SB 49 (Becker) | Renewable energy: solar canopy tax incentives: Department of Transportation strategic plan. Provides a tax exemption for the sale and use of materials and supplies purchased to construct a qualified solar canopy project. SB 53 (Portantino) | Income taxes: tax credits: motion picture credit. A placeholder bill related to the film industry. SB 82 (Seyarto) | Property taxation: disabled veterans’ exemption: eligibility letters. Seeks to make it easier to verify a service-connected disability for property tax purposes by allowing digital letters. SB 93 (Nguyen) | Personal income tax: credit: virtual learning costs: dependent of the taxpayer. A former placeholder bill that provides a tax credit for virtual learning supplies incurred in 2023 through 2027. SB 96 (Portantino) | Sales and Use Tax Law: live events: historic event venues. Historic Venue Restoration and Resiliency Act. This bill was amended to relate to funds and live events at historic venues. SB 220 (Committee on Budget and Fiscal Review) | Personal Income Tax Law: exclusion: student loan debt. This bill would exclude from an individual’s gross income, for taxable years between 2021, and 2026, the amount of certain student loans discharged after December 31, 2020, and before January 1, 2026, in conformity with federal law. SB 230 (Seyarto) | Income tax: health savings accounts. Would allow a deduction for a taxpayer’s contributions to a health savings account. SB 471 (Padilla) | Personal Income Tax Law: Corporation Tax: hiring credit: lithium extraction: battery manufacturers. Allows a tax credit for businesses in Imperial and Riverside Counties that are primarily engaged in lithium extraction or electric battery manufacturing. SB 533 (Limón) | Income taxes: credit: childcare. Provides a credit for startup expenses for childcare programs or constructing a childcare facility, to be used primarily by the children of the taxpayer’s employees or by the children of employees of tenants leasing commercial or office space in a building owned by the taxpayer, or of the costs of providing childcare information and referral services to the taxpayer’s employees. SB 714 (Blakespear) | Personal income tax. A placeholder bill related to personal income taxes and foreign countries. SB 812 (Roth) |Tax preparers: notices: social media accounts. Currently, the Tax Preparation Act requires tax preparers to register with the California Tax Education Council and maintain a surety bond. Starting in 2019, paid claims against the surety bond must be reported to the Council, which posts a notice on the website. This bill adds a requirement for the Council to also post on any social media accounts notice of claims. Existing law also requires the Council to maintain on its website a searchable public registry, including direct links to websites maintained by the California Board of Accountancy, the State Bar of California, and the Internal Revenue Service where public information regarding tax preparers exempt from this act may be obtained. This bill adds a requirement for the Council to also post on any social media accounts the links found on its website. Current law requires a list of approved providers of tax preparer education for tax preparers to be made available to tax preparers upon request. This bill would require a list of those approved providers to also be made available to the Legislature upon request. SB 853 (Dahle) | Personal income tax. A placeholder bill relating to personal income tax. BILLS OF INTEREST | SMALL BUSINESS AND TAX NEXUSAB 778 (Ta) |Taxation: corporations: minimum franchise tax: limited liability companies: annual tax: small businesses. Exempts certain businesses from paying a minimum franchise tax or an annual tax if they make less than $20,000 in gross receipts in the first taxable year they open. Press release here. SB 375 (Alvarado- Gil) | Employment: employer contributions: employee withholdings: COVID-19 regulatory compliance credit. This bill would provide some employers with a COVID-19 Regulatory Compliance Credit for the 2023 and 2024 calendar years, used to reduce the amount of Personal Income Taxes employers are required to withhold from wages. BILLS OF INTEREST | SMALL BUSINESS FOCUSAB 258 (Reyes) | Economic development: small businesses. A placeholder bill intended to create and promote a portal where small businesses can easily search for grants, procurement, and other financial opportunities to grow their businesses. New | AB 524 (Wicks) | Discrimination: family caregiver status. This bill creates a new protected class in the Fair Employment and Housing Act: “family caregiver status.” Discriminating against an employee due to this status could be considered a civil rights violation. A 2023 CalChamber “job killer” bill. SB 575 (Wahab) | Employment relations. A placeholder bill relating to employer/employee relationships. SB 666 (Min) | Small business: loan fees. A placeholder bill was amended to prohibit a licensee from charging specified fees in connection with a financing transaction with a small business. SB 703 (Niello) | Employment: work hours: flexible work schedules. Allows a nonexempt employee to request a flexible work schedule of four days a week, 10 hours a day with no obligation for the employer to pay overtime. |