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

The Legislature reconvened on January 2, the second of a two-year session. Already, an important milestone has come and gone: January 19 was the date by which the remaining 2023 bills must have passed their relevant committee. January 31 marks the deadline for 2023 bills to pass out of their house of origin if they are to continue. January is also the month when many legislators finalize their bill packages, as all bills must be introduced by February 16.

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Tax Focus

AB 1973 (Lackey) | Referred to the Senate Revenue and Taxation Committee

Topic: Personal Income Tax Law: Corporation Tax Law: Bobcat Fire: exclusions

Summary: Excludes from gross income amounts received in settlement arising out of the 2020 Bobcat Fire, in the County of Los Angeles. 

AB 2979 (Fong) | In the Senate Appropriations Committee

Topic: Income taxation: exclusion: victim compensation

Summary: Excludes from gross income any payment received from the California Victim Compensation Board.

AB 3287 (Committee on Revenue and Taxation) | In the Senate Appropriations Committee

Topic: Electronic notifications

Summary: Deletes the January 1, 2025 sunset date for the Franchise Tax Board's authority to use alternative communication methods with electing taxpayers.

SB 230 (Seyarto) | In the Assembly Revenue & Taxation Committee

Topic: Income tax: health savings accounts

Summary: Allows similar tax deduction treatment of Health Savings Accounts under state law that applies under federal law

SB 946 (McGuire) | Referred to the Assembly Revenue & Taxation Committee

Topic: Personal Income Tax Law: Corporation Tax Law: exclusions: wildfire mitigation payments

Summary: Excludes from gross income amounts received from a California qualified wildfire loss mitigation payment.

SB 1059 (Bradford) | Referred to the Assembly Revenue & Taxation and Business & Professions Committees

Topic: Cannabis: local taxation: gross receipts.

Summary: Excludes the amount of any cannabis excise tax or sales and use tax from the definition of gross receipts for purposes of local cannabis taxes.

SB 1192 (Portantino) | Referred to the Assembly Revenue & Taxation Committee

Topic: Personal Income Tax Law: Small Business Relief Act: elective tax

Summary: Extends the sunset date by two years for various sections of current law establishing the state’s elective pass through entity.

SB 1501 (Glazer) | Assembly Revenue & Taxation Committee cancelled; may not move forward

Topic: Small Business Relief Act: Penalties

Summary: Allows a taxpayer to pay elective pass through entity tax without meeting the prepayment requirement if they pay a penalty equal to 5% of the elective tax paid for that taxable year.

Business Focus

AB 1870 (Ortega) | Passed the legislature

Topic: Notice to employees: legal services

Summary: Requires employers to include information concerning an employee’s right to consult a licensed attorney in their workers’ compensation employee rights notice

AB 2011 (Bauer-Kahan) | In the Senate Appropriations Committee

Topic: Unlawful employment practices: small employer family leave mediation program: reproductive loss leave

Summary: Modifies and makes permanent the small employer family leave mediation pilot program administered by the Civil Rights Department, and expands the program to include reproductive loss leave.

SB 1205 (Laird) | Referred to the Assembly Insurance Committee

Topic: Workers’ compensation: medical benefits

Summary: Entitles specified injured employees who are still able to work to temporary disability indemnity payment for wages lost as a result of medical treatment, and all reasonable expenses of transportation, meals, and lodging associated with that treatment.

Previously Tracked 2024 Bills

AB 1860 (Bauer-Kahan). Would have excluded from gross income amounts resulting from the discharge of student loan debt and medical debt, as specified.

AB 1865 (Patterson). Would have excluded from gross income interest and investment gains accruing to a homeownership savings account.

AB 1867 (Sanchez) . Would have allowed a deduction equal to the costs paid or incurred by a taxpayer for a homeowners' insurance policy, as specified.

AB 1932 (Ward). Would have disallowed a mortgage interest deduction on any property that is not a taxpayer's primary residence.

AB 1928 (Sanchez). Attempted to repeal 2019’s AB 5, which re-classified some independent contractors as employees

AB 2294 (Schiavo). Attempted to incentivize hiring new employees by expanding businesses eligible for tax credits with an incentive to hire people from under-resourced communities.

AB 2312 (Wallis). Would have removed the $2,500 limitation on the above-the-line deduction for interest paid on "higher education expenses.”

AB 2524 (Ward). Attempted to exclude from gross income rollover distributions made from a qualified tuition program to an IRA under certain conditions.

AB 2829 (Papan). Would have imposed on companies with global revenues of $100 million a year a five percent tax on digital advertising revenue generated in California in order to fund youth mental health services.

AB 2861 (Wallis). Would have allowed a credit of up to $300 for a taxpayer who has purchased a gun safe.

SB 911 (Seyarto). Would have excluded survivor benefits or payments paid by a United States Department of Defense Survivor Benefit Plan from gross income for state tax purposes.

SB 927 (Dahle). Attempted to enact personal income and corporation tax exclusions for amounts received in settlement by a taxpayer to replace property damaged or destroyed by a natural disaster.

SB 952 (Dahle). Would have provided a tax credit to qualified taxpayers for costs relating to home hardening or vegetation management.

SB 1102 (Nguyen). Would have created personal Income and Corporation Tax exclusions for any amount received by a qualified taxpayer in settlement for claims relating to the October 2, 2021, oil spill off the coast of the County of Orange near the City of Huntington Beach.

SB 1135 (Limón). In part, the bill tried to authorize credits against the personal income tax and the corporation tax for qualified expenditures related to the application of compost on agricultural lands, ranchlands, or rangelands to improve soils, sequester carbon, and reduce GHG emissions, as specified.

SB 1436 (Allen). Attempted to establish, in the Government Operations Agency, the California Tax Policy Oversight Board to work collaboratively with California’s tax agencies to promote clarity and communication and to consider recommendations regarding input brought by the tax agencies, taxpayers, or other state or local entities, as specified.

SB 1172 (Grove). Amended to extend the sunset date for the California Breast Cancer Voluntary Contribution Fund. As indicated in the February report, there are other bills that would add or extend existing voluntary contribution funds; they are not tracked in CSTC reports.