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

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OF PARTICULAR NOTE

AB 1175 (Irwin) | Accountants
Phases in new education and experience standards for a certified public accountant license and authorizes out-of-state CPA license holders to practice public accountancy in California under a practice privilege if the state that issued their license has comparable licensure requirements.
Status: In the Senate, passed out of committees 

SB 788 (Niello) | Tax preparers: exemptions
This bill adds employees of firms registered with the California Board of Accountancy from the requirement to register with the California Tax Education Council under the Tax Preparers Act as specified.
Status: In the Assembly, on its way back to the Senate 

TAX RELATED

ABx 3 (Wallis) | Personal Income Tax: tax credits: fire-resistant home improvements.
This bill would allow a credit against personal income taxes for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, to a qualified taxpayer, in an amount equal to 40% of the taxpayer’s qualified expenses, not to exceed $400 per taxable year, or $2,000 cumulatively.
Status: Will not move forward 

AB 27 (Schiavo) | Personal Income Tax Law: Corporation Tax Law: Chiquita Canyon elevated temperature landfill event: exclusions.
Would prohibit Chiquita Canyon elevated temperature landfill event payments from being considered as income for state administered means tested programs and guaranteed income programs.
Status: In the Senate, re-referred to the Appropriations Committee 

AB 53 (Ramos) | Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act.
Excludes from gross income for five years, up to $20,000 of uniformed services retirement pay and annuity payments from a Department of Defense Survivor Benefit Plan received by qualified taxpayers.
Status: In the Senate, referred to the Military & Veterans Affairs and Revenue & Taxation Committees. 

AB 97 (Lackey) | Personal Income Tax Law: Corporation Tax Law: Bobcat Fire: exclusions.
Excludes from gross income amounts received in settlement arising out of the 2020 Bobcat Fire.
Status: In the Senate, referred to the Revenue and Taxation Committee 

AB 231 (Ta) | Income and corporation taxes: credits: work opportunity credit
Allows businesses with fewer than five employees, under the Personal Income Tax Law and the Corporation Tax Law, a credit equal to 40% of the wages paid to an employee who has previously been convicted of a felony.
Status: Held in the Appropriations committee; not moving 

AB 232 (Calderon) | Natural disasters: catastrophe savings accounts: personal income tax.
Allows an above-the-line deduction for contributions to a "catastrophe savings account" by a "qualified taxpayer" and excludes any interest accruing to the account from gross income, as specified.
Status: Held in the Appropriations committee; not moving

AB 245 (Gipson) | Property taxation: application of base year value disaster relief.
Extends the five-year deadline to eight years to reconstruct without a reassessment, and  allows the county assessor to reduce valuations for properties partially damaged more quickly, as a result of the Los Angeles Fires in January 2025
Status: In the Senate, re-referred to the Appropriations Committee 

AB 376 (Tangipa) | Personal Income Tax Law: Corporation Tax Law: wildfires: exclusions.
Excludes from gross income, under the Personal Income Tax Law and the Corporation Tax Law, amounts received in settlement by a "qualified taxpayer" to replace property damaged or destroyed by a wildfire occurring in California.
Status: Not moving 

AB 386 (Tangipa) | Personal Income Tax Law: Corporation Tax Law: credits: student loan payments
Allows a credit to an employer that makes student loan payments on behalf of a full-time employee and excludes from the employee's gross income the amount of those payments made on their behalf
Status: Not moving 

AB 389 (Wallis) | Personal Income Tax: tax credits: fire-resistant home improvements
Allows a credit for certain home-hardening measures.
Status: Not moving 

AB 397 (Mark González) | Personal Income Tax Law: young child tax credit
Expands the number of taxpayers eligible for the California Young Child Tax Credit by gradually modifying the definition of "qualifying child" to include children over the age of five.
Status: Held in the Appropriations Committee; not moving

AB 398 (Ahrens) | Personal income tax: Earned Income Tax Credit.
Establishes a minimum credit amount of approximately $300 for taxpayers who claim the California Earned Income Tax Credit, as specified.
Status: Held in the Appropriations Committee; not moving 

AB 429 (Hadwick) | Personal Income Tax Law: Corporation Tax Law: exclusions: wildfires
Excludes from gross income amounts received by a qualified taxpayer as settlement payments related to certain fires.
Status: In the Senate, referred to the Revenue and Taxation Committee 

AB 474 (Ward) | Housing discrimination: nonprofit home-sharing program: income tax exclusion: eligibility for public social services
The tax impacts were amended out of this bill. 

AB 490 (Tangipa) | Personal Income Tax Law: deduction from gross income: car loan interest payments
Allows a deduction for interest paid on a qualified vehicle loan.
Status: Not moving 

AB 547 (Tangipa) | Personal Income Tax Law: credits: in vitro fertilization.
The bill allows a tax credit, up to $5,000, for qualified expenses of in vitro fertilization.
Status: Not moving 

AB 691 (Wallis) | Personal Income Tax Law: credits: pet adoption and medical expenses
Creates a tax credit of up to $750 for qualified pet adoption and pet medical costs.
Status: Not moving 

AB 702 (Ta) | Personal income tax: exclusions: interest income: theft
This bill allows taxpayers to exclude from gross income any interest earned on an investment during the year if that investment is stolen, sold, or transferred without their consent.
Status: Will not move forward 

AB 755 (Tangipa) | Income tax: exclusion: disasters
Provides an exclusion for amounts received as income, not to exceed $300,000 per taxable year, by a qualified taxpayer whose real property, residence, or business was burned or deemed uninhabitable due to a disaster.
Status: Will not move forward 

AB 781 (DeMaio) | Charges: health savings accounts: electricity
This bill allows a deduction in computing adjusted gross income in connection with health savings accounts in modified conformity with federal law. In general, the deduction would be an amount equal to the aggregate amount paid in cash during the taxable year to a health savings account. (This bill also repeals laws related to electric rates).
Status: Will not move forward 

AB 814 (Schiavo) | Personal Income Tax Law: exclusions: law enforcement retirement.
Excludes from gross income peace officer retirement pay and amounts received by the beneficiary of an annuity plan set up for the surviving spouse or dependent of a person that lost their life in services as a peace officer.
Status: Not moving 

AB 834 (Hadwick) | Personal Income Tax Law: deduction: teachers.
Conform state law with federal law to allow the deduction of certain expenses of elementary and secondary school teachers.
Status: Not moving 

AB 838 (Ta) | Taxation: renter’s credit
If specified in a budget bill, this bill would temporarily expand the renter’s tax credit for five years, starting the year funding is approved. Income limits apply.
Status: Not moving 

AB 918 (Ransom) | Personal Income Tax Law: exclusions: first responders
Excludes from gross income "qualified wages" paid to first responders who are employees of a local agency for work performed in an area subject to a declared state or local emergency as part of the provision of mutual aid, as specified.
Status: Not moving 

AB 921(Castillo) | Generators: air pollution regulations: income tax credits
Allows a credit for the purchase of a backup generator, not to exceed $7,000, for use in a residence or commercial property.
Status: Not moving forward 

AB 976 (Ávila Farías) | Personal Income Tax Law: Corporation Tax Law: California Retail Security Tax Credit
This bill would give businesses operating in a disadvantaged community with total gross annual receipts of no greater than $5,000,000 and with 25 or fewer employees a tax credit for expenses related to retail theft prevention.
Status: Not moving 

AB 984 (Nguyen) | Personal income taxes: deductions: CalABLE contributions
Provides an above-the-line deduction for contributions made to a California Achieving a Better Life Experience (ABLE) Act account.
Status: Not moving 

AB 1057 (Michelle Rodriguez) | Personal Income Tax Law: exclusions: first responders: overtime pay
Creates an exclusion for “qualified overtime wages,” defined to mean overtime wages paid to a qualified taxpayer for work performed directly in response to, or in support of, emergency operations.
Status: Not moving 

AB 1124 (Bains) | Personal Income Tax Law: exclusions: first responders: overtime pay
Creates an exclusion for “qualified overtime wages,” defined to mean overtime wages paid to a qualified taxpayer for work performed directly in response to, or in support of, emergency operations.
Status: Not moving forward 

AB 1138 (Zbur) | Income and corporate taxes: tax credits: motion pictures. .
Expands the types of projects eligible for the Motion Picture Tax Credit 4.0 and Soundstage Filming Tax Credit Program and increases the credit amount percentages allowed for qualified motion pictures.
Status: Signed into law 

AB 1219 (Wallis) | Personal income tax: rate
Reduces the Personal Income Tax by 1% across all brackets by decreasing statutorily prescribed income tax rates and adjusting the income thresholds of certain tax brackets.
Status: Not moving 

AB 1265 (Haney) | Income taxes: credits: rehabilitation of certified historic structures
This bill extends the availability of the historic home rehabilitation tax credit and increases the tax credit for certain certified historic buildings from 25% to 30% of the cost of approved rehabilitation work.
Status: Not moving 

AB 1282 (Jeff Gonzalez) | Personal Income Tax Law: credits: medical expenses
This bill would allow a deduction in income for out-of-pocket medical costs, limited to $5,000.
Status: Not moving 

AB 1354 (Wallis) | Personal Income Tax Law: credits: insurance
Allows a credit for premium payments made to residential property insurance policies.
Status: Not moving 

AB 1377 (McKinnor) | Income taxes: credits: motion picture credit
Removes the “good-faith effort” standards in the Film and Television Tax Credit 4.0 program related to diversity workplans and diversity goals submitted by motion picture applicants to the California Film Commission.
Status: In the Senate Appropriations Committee 

AB 1431 (Tangipa) | Personal income taxes: credit: medical services: rural areas.
Allows a credit for a qualified taxpayer for medical services performed in a rural area, not to exceed $5,000 per taxable year.
Status: Will not move 

AB 1443 (Castillo) | Personal income taxes: unemployment insurance: tips
This bill would exclude tips from gross income and would exclude tips from the definition of wages paid for employment for purposes of income tax withholding and for purposes of unemployment insurance and the employment training tax.
Status: Will not move forward 

AB 1435 (Nguyen) | Personal Income Tax Law: Corporation Tax Law: credits: cleanup costs
Allows a credit for qualified cleanup expenditures, defined to mean costs directly related to the removal and disposal of unauthorized encampments, illegal dumping, and abandoned property.
Status: Will not move 

AB 1518 (Committee on Revenue and Taxation) | Income taxes: administration: nonresident aliens: identifying numbers: group filing
Allows certain nonresident taxpayers who do not have a Social Security Number or individual tax identification number to file state returns or be included on a group return, and authorizes an exemption from quarterly estimated payments for the taxpayers included on a group return.
Status: Signed into law 

SB 1 (Seyarto) | Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act.
Enacts the Military Services Retirement and Surviving Spouse Benefit Payment Act, which excludes two forms of military retirement income from state income tax.
Status: Will not move 

SB 17 (Ochoa Bogh) | Personal income taxes: unemployment insurance: tips.
This bill would exclude tips from income for state tax purposes and remove tips from the definition of wages for employment tax purposes.
Status: Will not move 

SB 23 (Valladares) | Property taxation: exemption: disabled veteran homeowners.
Enacts a full exemption from property tax for disabled veterans.
Status: Will not move 

SB 56 (Seyarto) | Property taxation: disabled veterans’ exemption: household income.
Provides that “household income” does not include service-connected disability payments when determining whether the low-income disabled veterans exemption applies.
Status: In the Assembly Revenue and Taxation Committee. 

SB 64 (Grove)| Education expenses: School Choice Flex Account Act of 2025
This bill would establish the School Choice Flex Account Act of 2025 only if an unspecified Senate Constitutional Amendment is approved as part of the November 2026 election. If enacted, the bill provides for income tax exclusions.
Status: Will not move forward 

SB 267 (Choi)| Personal income tax: credit: qualified teacher: school supplies
This bill would allow a tax credit for qualified teachers who purchase instructional materials and classroom supplies, not to exceed $250.
Status: Will not move 

SB 268 (Choi) | Income taxes: gross income exclusions: state of emergency: natural disaster settlements
Provide an exclusion for amounts received from a settlement entity by a qualified taxpayer to replace property damaged or destroyed by a natural disaster that was declared a state of emergency by the Governor.
Status: Will not move 

SB 269 (Choi) | Personal income taxes: Fire Safe Home Tax Credits Act
Provides credits to a qualified taxpayer for qualified costs relating to qualified home hardening and for qualified costs relating to qualified vegetation management, not to exceed an aggregate amount of $500,000,000 per taxable year.
Status: Will not move 

SB 296 (Archuleta) | Property taxation: exemption: disabled veteran homeowners
Enacts a full exemption from property tax for disabled veterans.
Status: In the Assembly, Revenue and Taxation Committee. May not move. 

SB 302 (Padilla) | Personal Income Tax Law and Corporation Tax Law: exclusions: environmental credits
Conforms state law to specific Internal Revenue Code sections added by the Inflation Reduction Act of 2022, relating to renewable energy development.
Status: In the Assembly Appropriations Committee  

SB 353 (Alvarado-Gil)| Income tax: credits: food banks.
Extends indefinitely tax credits for food bank donations.
Status: In the Assembly Committee on Revenue and Taxation. 

SB 376 (Valladares) | Incomplete gift nongrantor trusts: Personal Income Tax Law.
This bill changes the definition of an "incomplete gift nongrantor trust" to exclude charitable remainder trusts.
Status: In the Assembly, from committees 

SB 529 (Choi)| Personal income taxes: deduction: California qualified tuition program
Allows limited deductions for contributions to the California qualified tuition program established pursuant to the Golden State Scholarshare Trust Act.
Status: Will not move

SB 566 (Grove) | Real property tax: Personal Income Tax Law: homeowners’ exemption: renter’s credit
This bill would increase the homeowners’ exemption, for certain homeowners, from $7,000 to $50,000 of the full value of a dwelling. It would also increase credits for qualified renters.
Status: Will not move

SB 587 (Grayson) | Personal income taxes: credit: manufacturing: sales and use taxes.
Would enact credits against the Personal Income and Corporation Tax equal in the amount of taxes paid by a manufacturer because the current sales and use tax exemption for equipment used in manufacturing or research and development is a partial, not a full, exemption.
Status: In the Assembly Appropriations Committee 

SB 591 (Valladares) | Taxation: electronic payments: penalties
This bill would change the penalty for not making required electronic payments to the Franchise Tax Board; the first violation would be waived.
Status: In the Assembly Appropriations Committee 

SB 628 (Grove) | Employment: employer contributions: employee withholdings: credit: agricultural employees
This bill would create a payroll tax credit to reimburse agricultural employers for overtime wages paid to their agricultural employees.
Status: Will not move 

SB 657 (Niello) | Personal Income Tax Law: deferred compensation: exclusions: long-term qualified tuition program
This bill would exempt distributions made from a long-term qualified tuition program that are paid in a direct trustee-to-trustee transfer to a Roth IRA.
Status: Will not move 

SB 665 (Choi) | Personal Income Tax Law: Corporation Tax Law: credits: retail security measures
Would allow a credit for retail theft prevention measures, limited to $10,000 annually.
Status: Will not move 

SB 666 (Choi) | Personal income tax: credit: home security surveillance
Would allow a tax credit, not to exceed $250, for the purchase and installation of a security surveillance system at the taxpayer’s principal California based single-family residence.
Status: Will not move 

SB 785 (Caballero) | Personal income tax: credit: durable medical equipment
Allows a credit for purchases of certain durable medical equipment
Status: In the Assembly Appropriations Committee 

SMALL BUSINESS RELATED

AB 265 (Caloza) | Small Business and Nonprofit Recovery Fund Act.
Creates the Small Business and Nonprofit Recovery Fund to provide grants to businesses and nonprofits impacted by a state of emergency.
Status: In the Senate Appropriations Committee 

AB 685 (Solache) | Los Angeles and Ventura Wildfire Small Business Recovery Act
Establishes the Los Angeles and Ventura Wildfire Small Business Recovery Act to provide assistance to certain small businesses.
Status: Will not move forward 

AB 1519 (Committee on Revenue and Taxation) Direct File: employment: notice
Requires employer notifications to all employees about specified income tax filing assistance programs to also include information regarding Direct File.
Status: Not moving

AB 713 (Solache) | Public postsecondary education: student employment.
Bill amended; now relates to state universities and colleges.

SB 7 (McNerney) | Employment: automated decision systems
This bill imposes notice, use, and appeal mandates on employers that use an automated decision system that affects workers. Under SB 7, “worker” means an employee or independent contractor. Automated decision systems typically use AI to produce outputs such as scores, or recommendations to assist or replace human decision making.
Status: In the Assembly Appropriations committee 

SB 70 (Seyarto) | Public contracts: Small Business Procurement and Contract Act.
This bill increases, from $250,000 to $350,000, the maximum estimated value of a contract awarded pursuant to the Small Business Procurement and Contract Act which allows state agencies to award a contract to a certified small business or to a disabled veteran business enterprise without complying with competitive bidding requirements.
Status: In the Assembly Appropriations Committee 

SB 590 (Durazo) | Paid family leave: eligibility: care for designated persons
Expands eligibility for benefits under the Paid Family Leave program to include individuals who take time off work to care for a seriously ill designated person, as defined.
Status: In the Assembly Appropriations Committee 

SB 705 (Hurtado) | Small businesses: certification. “Placeholder” bill
Status: This bill will not move forward

SB 816 (Valladares) | Taxation: corporations: minimum franchise tax: limited liability companies: annual tax: microbusinesses
Exempts microbusinesses incorporated in California from the minimum franchise tax.
Status: This bill will not move forward