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AB-731 Personal income taxes: deductions: homeowners’ association assessments.(2017-2018)

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Date Published: 05/01/2017 09:00 PM
AB731:v97#DOCUMENT

Amended  IN  Assembly  May 01, 2017
Amended  IN  Assembly  March 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 731


Introduced by Assembly Member Chen

February 15, 2017


An act to amend Section 17072 of, and to add and repeal Section 17208 of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 731, as amended, Chen. Personal income taxes: deductions: homeowners’ association assessments.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by that law.
This bill, for taxable years beginning on or after January 1, 2017, and before January 1, 2023, 2022, would allow a deduction in computing adjusted gross income for an amount paid or incurred by the qualified taxpayer during the taxable year, not to exceed ($3,000), $1,500, for qualified homeowners’ association assessments, as defined.
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.

 Section 17072 of the Revenue and Taxation Code is amended to read:

17072.
 (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply.
(d) For taxable years beginning on or after January 1, 2017, and before January 1, 2023, 2022, Section 62(a) of the Internal Revenue Code is modified to provide that the deduction allowed under Section 17208 shall be allowed in determining adjusted gross income.

SEC. 2.

 Section 17208 is added to the Revenue and Taxation Code, to read:

17208.
 (a) For taxable years beginning on or after January 1, 2017, and before January 1, 2023, 2022, a deduction shall be allowed for an amount paid or incurred by the qualified taxpayer during the taxable year, not to exceed three thousand dollars ($3,000), one thousand five hundred dollars ($1,500), for qualified homeowners’ association assessments.
(b) (1) For purposes of this section, both of the following shall apply:
(A) “Homeowners’ association” has the same meaning as the term “association” as defined by Section 4080 of the Civil Code.
(B) “Qualified homeowners’ association assessments” means a regularly occurring, mandatory financial assessment that satisfies all of the following:
(i) Is paid by the taxpayer to a homeowners’ association with respect to the taxpayer’s principal place of residence.
(ii) The revenues derived from the imposition of the assessment directly benefit the taxpayer’s principal place of residence.
(iii) The obligation to pay the assessment arises from the taxpayer’s mandatory and automatic membership in a homeowners’ association.
(2) A qualified homeowners’ association assessment does not include a special assessment.
(c) For purposes of this section, “qualified taxpayer” means a taxpayer whose gross income for the taxable year does not exceed one the following amounts:
(1) One hundred fifty thousand dollars ($150,000). ($150,000) for qualified taxpayers filing a joint, head of household, or surviving spouse as defined in Section 17046, return.
(2) One hundred thousand dollars ($100,000) for a qualified taxpayer filing a return other than as described in paragraph (1).
(d) This section shall remain in effect only until December 1, 2023, 2022, and as of that date is repealed.

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.