Today's Law As Amended

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SB-1485 Personal income tax: credits: charitable contributions.(2017-2018)



SECTION 1.

 Section 17052.7 is added to the Revenue and Taxation Code, to read:

17052.7.
 (a) (1) For taxable years beginning on or after January 1, 2018, there shall be allowed as a credit against the “net tax,” as defined by Section 17039, an amount equal to the amount donated by the taxpayer during the taxable year to a qualified charitable organization, subject to paragraph (2).
(2) In the case of a single individual, a head of household, or a married individual filing a separate return, a credit allowed under this section for a taxable year shall not exceed five hundred dollars ($500). In the case of a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, a credit allowed under this section for a taxable year shall not exceed one thousand dollars ($1,000).
(b) For purposes of this section, a “qualified charitable organization” means an organization that meets all of the following requirements:
(1) Is exempt from federal income taxes as an organization described in Section 501(c)(3) of the Internal Revenue Code.
(2) Is located in the State of California.
(3) At the time of donation, is not under suspension by the Franchise Tax Board or the Secretary of State.
(c) In order to claim a credit under this section, both of the following shall apply:
(1) For a donation made to a charitable organization that collects donations on behalf of other charitable organizations, a taxpayer shall designate that the donation be directed only to a qualified charitable organization.
(2) A taxpayer shall provide the Franchise Tax Board with the name of the qualified charitable organization, the date of the donation, and the amount of the donation on forms provided by the Franchise Tax Board.
(d) The Franchise Tax Board shall post on a new page on its Internet Web site a list of the names of each qualified charitable organization as found on its Exempt Organizations List.
(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding five years if necessary, until the credit is exhausted.
(f) A credit allowed by this section shall be in lieu of any charitable deduction otherwise allowed by this part.
(g) The credit allowed by this section shall be known as the California Universal Charitable Credit.
(h) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 2.
 (a) It is the intent of the Legislature to comply with Section 41 of the Revenue and Taxation Code.
(b) For the purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Section 17052.7 of the Revenue and Taxation Code as added by this act, the Legislature finds and declares as follows:
(1) The goal of this bill is to ensure California creates a robust and efficient tax incentive program that encourages all Californians to contribute to the charitable organizations serving their communities, coupled with accountability and transparency measures. Towards this end, California’s tax credit for charitable donations ensures that California taxpayers receive the maximum possible economic return on their investment and creates overall positive and sustained economic impacts for the entire state.
(2) The effectiveness of the credit shall be measured by the number of taxpayers claiming the credit.
SEC. 3.
 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.