Legislature

California Tax Budget Bill Review

On August 26, Assembly Bill 158 by the Assembly Budget Committee was gutted and amended to address tax relief. The bill would modify articles 17053.71, 17131.8, 23628 and 24308.6, add article 17053.75 and repeal and add article 19551.3 of the Revenue and Tax Code, modify article 8161 of the Code of Social Protection and Institutions and would repeal Section 26 of Chapter 264 of the 2020 Statutes.

Clause 1 of the bill would amend Section 17053.71 of the Revenue and Tax Code to make a technical correction.

Section 2 of the bill would add Section 17053.75 of the Income Tax Code to provide, for tax years beginning on January 1, 2024, a tax credit in an amount greater than (1) for contributions paid in that tax year by eligible taxpayers under the Workers’ Tax Credit Adjustment Factor, or (2) for the amount equal to the contributions paid in that tax year by the eligible taxpayer up to up to $100.

The intention of the Legislature is that the adjustment factor for the workers’ tax credit and the maximum amount allowed be set so as to limit the annual loss of income to a maximum of $400 million. The bill would define the following terms: “bona fide union organization”, “dues” and “qualified taxpayer”.

This credit replaces any other credit or deduction to which the eligible taxpayer may be entitled for these amounts. If the credit exceeds the tax payable, the excess is deducted from other amounts owing and the balance is refunded to the eligible taxpayer if monies are appropriated by the legislature for this purpose.

To comply with the requirements of Section 41, there are legislative findings and statements regarding the purpose of authorized credit, which is to help people with the cost of union membership. There are performance indicators to be used by the legislature and an obligation for the FTB to provide an annual report to the legislature containing specified information.

Clause 3 of the bill would amend Income Tax Code Section 17131.8 to clarify that changes made earlier this year apply to tax years beginning on or after January 1, 2019.

Clause 4 of the bill would repeal Section 19551.3 of the Income and Tax Code, which would require the sharing of data between the Department of Health Care Services and the Franchise Tax Board.

Clause 5 of the bill would add income and tax section 19551.3 to require the Department of Human Services and the Department of Health Services to exchange data with the Franchise Tax Board for those eligible for the credit. California earned income tax. The data must remain confidential and must only be used for specific purposes.

The DSS and DHCS shall provide the FTB annually with the results and findings of outreach conducted to measure whether the outreach is achieving its goal of increasing the number of claims for the federal earned income tax credit, the income tax earned in California and other states. and federal poverty tax credits. Required information is specified.

Clause 6 of the bill would amend Section 23628 of the Revenue and Tax Code to make a technical correction.

Clause 7 of the bill would amend Income Tax Code Section 24308.6 to clarify that changes made earlier this year apply to tax years beginning on or after January 1, 2019.

Section 8 of the bill would amend Section 8161 of the Social Welfare and Institutions Code to replace the Comptroller with the Franchise Tax Commission to make a one-time payment to each qualifying beneficiary.

Clause 9 of the bill would repeal section 26 of Chapter 64 beginning in 2020. Clause 10 of the bill would allocate $20,000 to the FTB for the administration of the data sharing provisions of this act.

Clause 11 of the bill contains legislative findings and statements that the application of the gross income exclusion for loan amounts canceled under the federal P3 Extension Act of 2021 to years of taxation commencing on or after January 1, 2019, as provided by this law, serves the public purpose of securing the financial condition of businesses that have been affected by the COVID-19 pandemic, and does not constitute a gift of public funds .

Clause 12 of the bill provides that no reimbursement to a local body or school district is required by this law. Article 13 of the bill provides that this bill is linked to the finance bill and will come into force immediately.