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

As the Legislature winds down its session, it does so with over 1,000 bills remaining. All bills must pass by August 31 if they are to continue to the Governor, who has until the end of September to sign or veto bills.

Related news: Decision day: Which bills did California lawmakers kill?; California Legislature: Slouchingtowards end of session

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Bills relating to the tax profession

Note that many of these bills, if signed, are applicable only in certain tax years. The exact years depend on the bill and may change as bills are amended. Additioanlly, many are subject to a 2/3, rather than marjority, vote.

AB 1249 (Gallagher):Income taxes: gross income exclusions: wildfires. Excludes settlement payments made in connection with the fires associated with the PG&E trust fund from taxable income.
Status: On the Senate floor 

SB 485 (Portantino):Income taxes: tax credits: Motion picture credit: extension: diversity workplan. This bill recasts the Film and TV Tax Credit 3.0 program and the Studio tax credit which, contingent on future budget actions, would extend through 2029-30.
Status: On the Assembly floor 

SB 1266 (Borgeas):Income taxes: credits: designated wildfire zones. Allows a credit equal to 50% of the amount incurred, subject to specified limitations, by a person or "small business", 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 Assembly Revenue & Taxation Committee; may not move forward

SB 1301 (Becker):Corporation Tax Law: Personal Income Tax Law: credits: green energy: manufacturing. Allows a credit equal to 10% of the amount paid or incurred by a taxpayer for "eligible manufacturing costs.” This bill would take effect immediately if signed into law.
Status: In the Assembly Revenue & Taxation Committee; may not move forward 

SB 1374 (Borgeas):Personal income taxes: deduction. California qualified tuition program. Subject to a state budget appropriation, this bill allows a qualified taxpayer a deduction for contributions made to a California qualified tuition program.
Status: In the Senate/pending concurrence with Assembly amendments 

SB 1484 (Grove):Income taxes: credits: qualified first-year wages: foster or former foster youth. Creates a tax credit for employers that hire current or former foster youth.
Status: In the Assembly Revenue & Taxation Committee; may not move forward

Bills Relating to Businesses

SB 951 (Durazo): Unemployment insurance: contribution rates: disability insurance: paid family leave: weekly benefit amount. Revises the formula for the computation of State Disability Insurance and Paid Family Leave benefits
Status: In the Senate/pending concurrence with Assembly amendments 

SB 1044 (Durazo): Employers: emergency condition: retaliation. Prohibits an employer, in the event of an emergency condition, from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace because the employee has a reasonable belief that the workplace is unsafe or preventing the employee from accessing the employee's mobile device for safety-related purposes.
Status: In the Senate/pending concurrence with Assembly amendments

SB 1162 (Limón): Employment: Salaries and Wages. Expands state pay data reporting requirements to cover contracted employees and requires employers to make pay scale information for positions available to employees and included in job postings.
Status: On the Assembly floor

Previously Tracked Bills no Longer Moving Forward

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

AB 2589 (Santiago):Earned Income Tax Credit: one-time child tax credit payment. Would increase the amount of the young child tax credit, allow the tax credit to a qualified taxpayer for each qualifying child, and would expand the definitions of “qualifying child,” and “qualified taxpayer.”

AB 2620 (Valladares): Income taxes: credits: telecommuting: transfer of funds. Allows a tax credit for certain telecommuting employees.

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.

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.

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.

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.

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.

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.

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.