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SB-1182 Taxation: renters’ credit.(2017-2018)

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Date Published: 05/25/2018 09:00 PM
SB1182:v95#DOCUMENT

Amended  IN  Senate  May 25, 2018
Amended  IN  Senate  May 01, 2018
Amended  IN  Senate  April 26, 2018
Amended  IN  Senate  April 10, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1182


Introduced by Senator Glazer
(Coauthors: Senators Beall, Bradford, Dodd, Galgiani, Hertzberg, Hill, Hueso, Leyva, Newman, Nguyen, Pan, Portantino, Roth, Skinner, Wieckowski, and Wilk)
(Coauthor: Assembly Member Lackey)

February 14, 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


SB 1182, as amended, Glazer. Taxation: renters’ 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, as adjusted, or less, and in the amount of $60 for other individuals if adjusted gross income is $25,000, as adjusted, or less. Existing law requires the Franchise Tax Board to annually adjust for inflation these adjusted gross income amounts. For 2017, the adjusted gross income limit is $80,156 and $40,078, respectively.
This bill, for each taxable year beginning on and after January 1, 2018, would increase the credit amount for a qualified renter, as specified, and would require the Franchise Tax Board to annually adjust for inflation the credit amount for taxable years on and after January 1, 2023. The bill would authorize the Governor to suspend the increased credit amount by proclamation if the Governor finds and declares that an economic emergency exists in this state and it is necessary that the increased credit amount be suspended, in which case the credit amount would be $120 and $60 as in current law. the credit amount for the taxable year immediately preceding the taxable year in which the suspension of the credit applies. The bill would also provide that the increased credit amount is $0 for each taxable year beginning on or after January 1, 2019, unless otherwise specified in a bill providing for appropriations related to the Budget Bill.
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 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) (i) 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 one hundred twenty dollars ($120) for taxable years before January 1, 2018, regardless of whether or not the qualified renter has dependents, as defined in Section 17056, and equal to the amount specified in clause (ii) for taxable years beginning on or after January 1, 2018, if the qualified renter has no dependents, as defined in Section 17056.
(ii) (I) For taxable years beginning on or after January 1, 2018, but before January 1, 2019, the credit amount shall be one hundred thirty-seven dollars and twenty cents ($137.20).
(II) For taxable years beginning on or after January 1, 2019, but before January 1, 2020, the credit amount shall be one hundred fifty-seven dollars and fourteen cents ($157.14).
(III) For taxable years beginning on or after January 1, 2020, but before January 1, 2021, the credit amount shall be one hundred seventy-seven dollars and forty-nine cents ($177.49).
(IV) For taxable years beginning on or after January 1, 2021, but before January 1, 2022, the credit amount shall be one hundred ninety-eight dollars and twenty-four cents ($198.24).
(V) For taxable years beginning on or after January 1, 2022, but before January 1, 2023, the credit amount shall be two hundred nineteen dollars and forty cents ($219.40).
(VI) For taxable years beginning on or after January 1, 2023, the credit amount shall be the amount recomputed pursuant to subdivision (k).
(B) (i) For other individuals, if adjusted gross income is twenty-five thousand dollars ($25,000) or less, the credit shall be equal to sixty dollars ($60) for taxable years before January 1, 2018, regardless of whether or not the qualified renter has dependents, as defined in Section 17056, and shall be equal to the amount specified in clause (ii) for taxable years beginning on or after January 1, 2018, if the qualified renter has no dependents, as defined in Section 17056.
(ii) (I) For taxable years beginning on or after January 1, 2018, but before January 1, 2019, the credit amount shall be eighty-nine dollars and twenty cents ($89.20).
(II) For taxable years beginning on or after January 1, 2019, but before January 1, 2020, the credit amount shall be one hundred twenty dollars and eighteen cents ($120.18).
(III) For taxable years beginning on or after January 1, 2020, but before January 1, 2021, the credit amount shall be one hundred fifty-one dollars and seventy-nine cents ($151.79).
(IV) For taxable years beginning on or after January 1, 2021, but before January 1, 2022, the credit amount shall be one hundred eighty-four dollars and two cents ($184.02).
(V) For taxable years beginning on or after January 1, 2022, but before January 1, 2023, the credit amount shall be two hundred sixteen dollars and ninety cents ($216.90).
(VI) For taxable years beginning on or after January 1, 2023, the credit amount shall be the amount recomputed pursuant to subdivision (k).
(C) (i) For taxable years beginning on and after January 1, 2018, for spouses filing joint returns, heads of household, and surviving spouses, as defined in Section 17046, with an adjusted gross income as described in clause (i) of subparagraph (A), and for other individuals, with an adjusted gross income as described in clause (i) of subparagraph (B), who have one or more dependents, as defined in Section 17056, the credit shall be equal to the amount specified in clause (ii).
(ii) (I) For taxable years beginning on or after January 1, 2018, but before January 1, 2019, the credit amount shall be one hundred seventy-eight dollars and forty cents ($178.40).
(II) For taxable years beginning on or after January 1, 2019, but before January 1, 2020, the credit amount shall be two hundred forty dollars and thirty-seven cents ($240.37).
(III) For taxable years beginning on or after January 1, 2020, but before January 1, 2021, the credit amount shall be three hundred three dollars and fifty-eight cents ($303.58).
(IV) For taxable years beginning on or after January 1, 2021, but before January 1, 2022, the credit amount shall be three hundred sixty-eight dollars and five cents ($368.05).
(V) For taxable years beginning on or after January 1, 2022, but before January 1, 2023, the credit amount shall be four hundred thirty-three dollars and eighty-one cents ($433.81).
(VI) For taxable years beginning on or after January 1, 2023, the credit amount shall be the amount recomputed pursuant to subdivision (k).
(2) Except as provided in subdivision (b), spouses shall receive only 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 any other 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 adjusted gross income amount in clause (i) of subparagraph (B) of paragraph (1) of subdivision (d) 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 adjusted gross income amounts pursuant to this subdivision, the adjusted gross income amounts provided in clause (i) of subparagraph (A) of paragraph (1) of subdivision (a) shall be twice the amount provided in clause (i) of subparagraph (B) of paragraph (1) of subdivision (a).
(k) For each taxable year beginning on or after January 1, 2023, the Franchise Tax Board shall recompute the credit amount for the immediately preceding taxable year under clause (ii) of subparagraphs (A), (B), and (C) of 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 credit amount for the immediately preceding taxable year under clause (ii) of subparagraphs (A), (B), and (C) of subdivision (a) by the inflation adjustment factor determined in paragraph (2), and round off the resulting products to the nearest one dollar ($1).
(l) (1) (A) The If the credit amounts allowed under clause (ii) of subparagraphs (A), (B), and (C) of subdivision (a) are amounts that are not zero dollars ($0), the Governor may suspend the credit under clause (ii) of subparagraphs (A), (B), and (C) of subdivision (a) by his or her proclamation, filed with the Secretary of State, that finds and declares that an economic emergency exists in this state and it is necessary that the credit under clause (ii) of subparagraphs (A), (B), and (C) of subdivision (a) be suspended until the end of the economic emergency.
(2) If the Governor issues a proclamation pursuant to paragraph (1), the Governor shall specify in the proclamation the taxable year to which the suspension applies.
(3) A Governor’s proclamation under this subdivision shall expire on the first day after the end of the taxable year to which the proclamation applies.
(4) The Governor may issue additional proclamations upon the expiration of a proclamation if an economic emergency continues to exist and all requirements of this subdivision are met.
(m) Unless otherwise specified in any bill providing for appropriations related to the Budget Bill, for taxable years beginning on or after January 1, 2019, the amount of credit under clause (ii) of subparagraphs (A), (B), and (C) of subdivision (a) shall be zero dollars ($0).

(2)

(n) (1) Notwithstanding any other law and if the credit under clause (ii) of subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (a) is suspended pursuant to paragraph (1), subdivision (l), the credit amounts in clause (i) of subparagraphs (A) and (B) for taxable years before January 1, 2018, shall be the credit amounts for a qualified renter for the taxable year or years that the credit under clause (ii) of subparagraphs (A), (B), and (C) of subdivision (a) is suspended pursuant to paragraph (1). specified in a bill providing for appropriations related to the Budget Bill shall be the credit amounts for the taxable year immediately preceding the taxable year in which the suspension of the credit applies.
(2) Upon the expiration of the suspension of the credit, the credit amounts specified in a bill providing for appropriations related to the Budget Bill will be the credit amounts scheduled to follow the credit amounts last applied under paragraph (1) that would have applied if the suspension under subdivision (l) had not occurred. In that event, for succeeding taxable years the credit amount specified in a bill providing for appropriations related to the Budget Bill shall continue on the schedule that would have applied if the suspension under subdivision (l) had not occurred, including any recomputation required under subdivision (k).
(3) Subdivision (k) shall not apply during a taxable year in which the credit is suspended or the credit amounts are zero dollars ($0) under subdivision (l) or subdivision (m).

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.