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SB-1071 Personal income taxes: exclusion: uniformed services: retirement pay.(2019-2020)

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Date Published: 02/18/2020 09:00 PM
SB1071:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 1071


Introduced by Senators Wilk, Archuleta, and Bates
(Principal coauthor: Assembly Member Brough)
(Coauthors: Senators Chang, Dahle, Galgiani, and Jones)
(Coauthors: Assembly Members Choi, Cunningham, Lackey, Mathis, Blanca Rubio, and Voepel)

February 18, 2020


An act to add and repeal Section 17132.9 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1071, as introduced, Wilk. Personal income taxes: exclusion: uniformed services: retirement pay.
The Personal Income Tax Law imposes a tax on individual taxpayers measured by the taxpayer’s taxable income for the taxable year, but excludes certain items of income from the computation of tax, including an exclusion for combat-related special compensation.
This bill, for taxable years beginning on or after January 1, 2021, and before January 1, 2031, would exclude from gross income specified amounts of retirement pay received by a taxpayer from the federal government for service performed in the uniformed services, as defined, during the taxable year.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure with achieve, detailed performance indicators, and data collection requirements.
The bill also would include additional information required for any bill authorizing a new income tax credit.
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 17132.9 is added to the Revenue and Taxation Code, to read:

17132.9.
 (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2031, gross income shall not include retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year in an amount equal to the following:
(1) For the first taxable year in which the exclusion provided by this section is allowed to the taxpayer, 50 percent of the amount of retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year.
(2) For the first taxable year following the taxable year in which the exclusion provided by this section is first allowed to the taxpayer, 50 percent of the amount of retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year.
(3) For the second taxable year following the taxable year in which the exclusion provided by this section is first allowed to the taxpayer, 75 percent of the amount of retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year.
(4) For the third taxable year following the taxable year in which the exclusion provided by this section is first allowed to the taxpayer, 75 percent of the amount of retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year.
(5) For the fourth taxable year following the taxable year in which the exclusion provided by this section is first allowed to the taxpayer, and every taxable year thereafter, 100 percent of the amount of retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year.
(b) For purposes of this section, the following definitions apply:
(1) “Armed Forces of the United States” has the same meaning as that term is defined in Section 17022.
(2) “Uniformed services” means Armed Forces of the United States, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, and the commissioned corps of the United States Public Health Service.
(c) This section shall remain in effect only until December 1, 2031, and as of that date is repealed.

SEC. 2.

 It is the intent of the Legislature to comply with the requirements of Section 41 of the Revenue and Taxation Code. With respect the exclusion allowed by Section 17132.9 of the Revenue and Taxation Code, as added by this act, hereafter :the exclusion,” the Legislature finds and declares the following:
(a) The specific goals, purposes, and objectives of the exclusion are as follows:
(1) To honor the service of California veterans and provide fiscal relief so they will remain or retire in California.
(2) Increase the number of highly skilled retired veterans in California’s workforce.
(b) Detailed performance indicators for the Legislature to use in determining whether the exclusion meets the goals, purposes, and objectives described in subdivision (a) are as follows:
(1) The number of veterans taking advantage of the tax exclusion.
(2) The economic security of veterans in California.
(3) The number of retired veterans leaving California.
(c) The data collection requirements for the exclusion are as follows:
(1) On or before December 1, 2030, the Legislative Analyst, in collaboration with the Department of Veterans Affairs, shall write and submit a report to the Legislature on the effectiveness of the exclusion. The report shall include, but not be limited to, an analysis of the number of veterans taking advantage of the exclusion and the impact of the exclusion on the economic security of veterans in California and the number of retired veterans leaving California. The report shall be submitted in compliance with Section 9795 of the Government Code.
(2) To write the report required by this subdivision, the Legislative Analyst may request information from the Franchise Tax Board and the Department of Veterans Affairs.
(A) The Franchise Tax Board and the Department of Veterans Affairs shall provide any data requested by the Legislative Analyst pursuant to this subdivision.
(B) The disclosure of data by the Franchise Tax Board to the legislative analyst pursuant to this subdivision shall treated as an exception from the general disclosure provision of Article 2 (commencing with Section 19542) of article 7 of Part 10.2 of the Revenue and Taxation Code.

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.