Bill Text

PDF |Add To My Favorites |Track Bill | print page

AB-2833 Personal income taxes: renter’s credit.(2017-2018)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
Date Published: 05/08/2018 09:00 PM
AB2833:v97#DOCUMENT

Amended  IN  Assembly  May 08, 2018
Amended  IN  Assembly  March 20, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2833


Introduced by Assembly Member Santiago

February 16, 2018


An act to amend Section 17053.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2833, as amended, Santiago. Personal income taxes: renter’s credit.
The Personal Income Tax Law authorizes various credits against the taxes imposed by that law, including a credit for qualified renters in the amount of $120 for spouses filing joint returns, heads of household, and surviving spouses if adjusted gross income is $50,000 or less, as currently adjusted to $80,156, and in the amount of $60 for other individuals if adjusted gross income is $25,000 or less, as currently adjusted to $40,078.
This bill, for taxable years beginning on or after January 1, 2019, and before January 1, 2024, for spouses filing joint returns, heads of household, and surviving spouses with those adjusted gross incomes, would allow a credit equal to the greater of $120 or 20% of the median rent in the county where the premises are located at which the qualified renter rented and occupied as his or her principal place of residence for the longest period during the taxable year. The bill, for taxable years beginning on or after January 1, 2019, and before January 1, 2024, for other individuals with those adjusted gross incomes, would allow a credit equal to the greater of $60 or 10% of the median rent in the county where the premises are located at which the qualified renter rented and occupied as his or her principal place of residence for the longest period during the taxable year.
This bill, on or before January 1, 2020, and on or before January 1 each year thereafter, 1, 2025, would require the county assessor Department of Housing and Community Development to annually determine the median rent in the each county for the previous calendar year and to provide that data to the Franchise Tax Board. The bill, on or before January 31, 2020, and on or before January 31 each year thereafter, 31, 2025, would require the Franchise Tax Board, using that data provided, to annually calculate the amount of the credit allowed by county for each taxable year and to publish its determinations on its Internet Web site to notify taxpayers. By imposing a new duty on county assessors, this bill would impose a state-mandated local program.

Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account.

This bill, for taxable years beginning on or after January 1, 2019, if the amount allowable as a credit under this bill exceeds the tax liability computed under the Personal Income Tax Law for the taxable year, would require the excess to be credited against other amounts due, if any, and the balance, if any, upon appropriation by the Legislature, to be paid from the Tax Relief and Refund Account and refunded to the taxpayer.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YESNO  

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


SECTION 1.

 Section 17053.5 of the Revenue and Taxation Code is amended to read:

17053.5.
 (a) (1) For a qualified renter, there shall be allowed a credit against his or her “net tax,” as defined in Section 17039. The amount of the credit shall be as follows:
(A) For spouses filing joint returns, heads of household, and surviving spouses, as defined in Section 17046, if adjusted gross income is fifty thousand dollars ($50,000) or less, the credit shall be equal to:
(i) For taxable years beginning before January 1, 2019, one hundred twenty dollars ($120).
(ii) For taxable years beginning on or after January 1, 2019, and before January 1, 2024, the greater of one hundred twenty dollars ($120) or 20 percent of the median rent in the county where the premises are located at which the qualified renter rented and occupied as his or her principal place of residence for the longest period during the taxable year. If the qualified renter rented and occupied premises as his or her principal place of residence located in different counties for equal periods during the taxable year, such that no rental period is longer than another, the credit shall be determined based on the premises located in the county with the highest median rent.
(iii) For taxable years beginning on or after January 1, 2024, one hundred twenty dollars ($120).
(B) For other individuals, if adjusted gross income is twenty-five thousand dollars ($25,000) or less, the credit shall be equal to:
(i) For taxable years beginning before January 1, 2019, sixty dollars ($60).
(ii) For taxable years beginning on or after January 1, 2019, and before January 1, 2024, the greater of sixty dollars ($60) or 10 percent of the median rent in the county where the premises are located at which the qualified renter rented and occupied as his or her principal place of residence for the longest period during the taxable year. If the qualified renter rented and occupied premises as his or her principal place of residence located in different counties for equal periods during the taxable year, such that no rental period is longer than another, the credit shall be determined based on the premises located in the county with the highest median rent.
(iii) For taxable years beginning on or after January 1, 2024, sixty dollars ($60).
(2) Except as provided in subdivision (b), spouses shall receive but one credit under this section. If the spouses file separate returns, the credit may be taken by either or equally divided between them, except as follows:
(A) If one spouse was a resident for the entire taxable year and the other spouse was a nonresident for part or all of the taxable year, the resident spouse shall be allowed one-half the credit allowed to married persons and the nonresident spouse shall be permitted one-half the credit allowed to married persons, prorated as provided in subdivision (e).
(B) If both spouses were nonresidents for part of the taxable year, the credit allowed to married persons shall be divided equally between them subject to the proration provided in subdivision (e).
(b) For spouses, if each spouse maintained a separate place of residence and resided in this state during the entire taxable year, each spouse will be allowed one-half the full credit allowed to married persons provided in subdivision (a).
(c) For purposes of this section, a “qualified renter” means an individual who satisfies both of the following:
(1) Was a resident of this state, as defined in Section 17014.
(2) Rented and occupied premises in this state which constituted his or her principal place of residence during at least 50 percent of the taxable year.
(d) “Qualified renter” does not include any of the following:
(1) An individual who for more than 50 percent of the taxable year rented and occupied premises that were exempt from property taxes, except that an individual, otherwise qualified, is deemed a qualified renter if he or she or his or her landlord pays possessory interest taxes, or the owner of those premises makes payments in lieu of property taxes that are substantially equivalent to property taxes paid on properties of comparable market value.
(2) An individual whose principal place of residence for more than 50 percent of the taxable year is with another person who claimed that individual as a dependent for income tax purposes.
(3) An individual who has been granted or whose spouse has been granted the homeowners’ property tax exemption during the taxable year. This paragraph does not apply to an individual whose spouse has been granted the homeowners’ property tax exemption if each spouse maintained a separate residence for the entire taxable year.
(e) An otherwise qualified renter who is a nonresident for any portion of the taxable year shall claim the credits set forth in subdivision (a) at the rate of one-twelfth of those credits for each full month that individual resided within this state during the taxable year.
(f) A person claiming the credit provided in this section shall, as part of that claim, and under penalty of perjury, furnish that information as the Franchise Tax Board prescribes on a form supplied by the board.
(g) The credit provided in this section shall be claimed on returns in the form as the Franchise Tax Board may from time to time prescribe.
(h) For purposes of this section, “premises” means a house or a dwelling unit used to provide living accommodations in a building or structure and the land incidental thereto, but does not include land only, unless the dwelling unit is a mobilehome. The credit is not allowed for any taxable year for the rental of land upon which a mobilehome is located if the mobilehome has been granted a homeowners’ exemption under Section 218 in that year.
(i) This section shall become operative on January 1, 1998, and applies to any taxable year beginning on or after January 1, 1998.
(j) For each taxable year beginning on or after January 1, 1999, the Franchise Tax Board shall recompute the adjusted gross income amounts set forth in subdivision (a). The computation shall be made as follows:
(1) The Department of Industrial Relations shall transmit annually to the Franchise Tax Board the percentage change in the California Consumer Price Index for all items from June of the prior calendar year to June of the current year, no later than August 1 of the current calendar year.
(2) The Franchise Tax Board shall compute an inflation adjustment factor by adding 100 percent to the portion of the percentage change figure which is furnished pursuant to paragraph (1) and dividing the result by 100.
(3) The Franchise Tax Board shall multiply the amount in subparagraph (B) of paragraph (1) of subdivision (a) for the preceding taxable year by the inflation adjustment factor determined in paragraph (2), and round off the resulting products to the nearest one dollar ($1).
(4) In computing the amounts pursuant to this subdivision, the amounts provided in subparagraph (A) of paragraph (1) of subdivision (a) shall be twice the amount provided in subparagraph (B) of paragraph (1) of subdivision (a).
(k) (1) On or before January 1, 2020, and on or before January 1 each year thereafter, 1, 2025, the county assessor Department of Housing and Community Development shall annually determine the median rent in the each county for the previous calendar year and provide that data to the Franchise Tax Board.
(2) On or before January 31, 2020, and on or before January 31 each year thereafter, 31, 2025, the Franchise Tax Board, using the data provided from each county assessor’s office by the Department of Housing and Community Development for each county pursuant to paragraph (1), shall annually calculate the amount of the credit allowed pursuant to this section by county for each taxable year, commencing with taxable years beginning on January 1, 2019. 2019, and before January 1, 2024. The Franchise Tax Board shall publish its determinations on its Internet Web site to notify taxpayers.

(l)For taxable years beginning on or after January 1, 2019, if the amount allowable as a credit under this section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, upon appropriation by the Legislature, shall be paid from the Tax Relief and Refund Account and refunded to the taxpayer.

SEC. 2.

If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

SEC. 3.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.