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SB-537 Income taxes: deductions: amounts due on real property tax bill. (2015-2016)

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CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Senate Bill No. 537


Introduced by Senator Cannella

February 26, 2015


An act to add Sections 17239 and 24356.9 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 537, as introduced, Cannella. Income taxes: deductions: amounts due on real property tax bill.
The Personal Income Tax Law and the Corporation Tax Law authorize various deductions in computing income that is subject to tax under those laws.
This bill would allow a deduction, under both of those laws, of amounts paid by the taxpayer on the taxpayer’s real property tax bill. The deduction under the Personal Income Tax Law would be an itemized deduction.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) It is a well-established federal position that a deduction for personal property taxes is allowed to the extent the taxes are based upon the assessed value of the property, also known as ad valorem taxes, under Section 164 of the Internal Revenue Code.
(b) It is also a well-established federal position that a deduction for real property taxes is not limited to ad valorem taxes under Section 164 of the Internal Revenue Code.
(c) The Internal Revenue Code limits a deduction for personal property taxes to ad valorem taxes, but no such limitation applies to a deduction for real property taxes.
(d) It has been concluded that assessments under the Mello-Roos Community Facilities Act of 1982 and certain other special taxes in California are deductible under Section 164 of the Internal Revenue Code even though they are not based upon the assessed value of the property.
(e) California law conforms to the federal law described in subdivisions (a) to (d), inclusive, and California taxpayers are currently deducting taxes that are not based upon the assessed value of the property.
(f) California is in a unique position with respect to the number of taxpayers subject to assessments under the Mello-Roos Community Facilities Act of 1982 and certain other special taxes, and California taxpayers have a right to protect their current property tax deduction.

SEC. 2.

 Section 17239 is added to the Revenue and Taxation Code, to read:

17239.
 For each taxable year beginning on or after January 1, 2015, there shall be allowed as an itemized deduction the amount paid by the taxpayer for the amount due on the taxpayer’s real property tax bill, including, but not limited to, real property taxes, personal property taxes, special taxes, special assessments, fees, or other charges.

SEC. 3.

 Section 24356.9 is added to the Revenue and Taxation Code, to read:

24356.9.
 For each taxable year beginning on or after January 1, 2015, there shall be allowed as a deduction the amount paid by the taxpayer for the amount due on the taxpayer’s real property tax bill, including, but not limited to, real property taxes, personal property taxes, special taxes, special assessments, fees, or other charges.

SEC. 4.

 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.