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AB-155 Personal income taxes: credit: qualified principal residence.(2019-2020)

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Date Published: 01/07/2019 09:00 PM
AB155:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 155


Introduced by Assembly Member Voepel

January 07, 2019


An act to add and repeal Section 17057.6 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 155, as introduced, Voepel. Personal income taxes: credit: qualified principal residence.
The Personal Income Tax Law allows various credits against the taxes imposed by that law.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2020, and before January 1, 2025, in an amount equal to $5,000 that is paid or incurred during the taxable year by a taxpayer for building a qualified principal residence.
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 17057.6 is added to the Revenue and Taxation Code, to read:

17057.6.
 (a) For each taxable year beginning on or after January 1, 2020, and before January 1, 2025, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to five thousand dollars ($5,000) that is paid or incurred during the taxable year by a taxpayer for building a qualified principal residence.
(b) For purposes of this section, “qualified principal residence” means a single-family residence that meets both of the following:
(1) The building costs for the residence were three hundred fifty thousand dollars ($350,000) or less.
(2) The residence will be used exclusively as the principal residence of the taxpayer for at least the first five taxable years after the taxable year for which the taxpayer is allowed the credit.
(c) 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 taxable year, and succeeding four years if necessary, until the credit is exhausted.
(d) If the qualified taxpayer uses the qualified principal residence for any purposes other than as the principal residence of the taxpayer in the first five taxable years after the taxable year for which the taxpayer was allowed the credit, the Franchise Tax Board shall recapture the credit amount. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the Franchise Tax Board discovers the improper use of the qualified principal residence.
(e) A taxpayer may only be allowed one credit under this section.
(f) It is the intent of the Legislature to comply with Section 41.
(g) This section shall remain in effect only until December 1, 2025, and as of that date is repealed.

SEC. 2.

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