Bill Text

Bill Information

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

SB-248 Taxation: renters’ credit.(2019-2020)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
Date Published: 03/18/2019 09:00 PM
SB248:v98#DOCUMENT

Amended  IN  Senate  March 18, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill No. 248


Introduced by Senator Glazer
(Principal coauthors: Assembly Members Gonzalez and Quirk-Silva)
(Coauthors: Senators Allen, Archuleta, Bates, Beall, Bradford, Caballero, Chang, Dodd, Galgiani, Hertzberg, Hill, Hueso, Jones, McGuire, Nielsen, Pan, Portantino, Roth, Skinner, Wieckowski, Wiener, and Wilk)
(Coauthors: Assembly Members Brough, Carrillo, Choi, Daly, Diep, Grayson, McCarty, Melendez, Mullin, Robert Rivas, Blanca Rubio, Santiago, and Voepel)

February 11, 2019


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 248, 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 2018, the adjusted gross income limit is $83,282 and $41,641, respectively.
Existing law establishes the continuously appropriated Tax Relief and Refund Account in the General Fund 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, including any amount allowable as an earned income tax credit in excess of any tax liabilities.
This bill, for taxable years beginning on or after January 1, 2019, for spouses filing joint returns, heads of household, and surviving spouses with those adjusted gross incomes, who have no dependents, would allow a credit equal to $220. The bill, for taxable years beginning on or after January 1, 2019, for other individuals with those adjusted gross incomes, who have no dependents, would allow a credit equal to $217. $220. The bill, for taxable years beginning on or after January 1, 2019, for spouses filing joint returns, heads of household, surviving spouses, and for other individuals, with those adjusted gross incomes, who have one or more dependents, would allow a credit equal to $434. The bill would require the Franchise Tax Board to annually recompute for inflation the credit amount for taxable years on or after January 1, 2020.
The bill, for taxable years beginning on or after January 1, 2020, would authorize a suspension of the increased credit amounts for any taxable year if (1) the Governor by proclamation finds and declares that an economic emergency exists in this state or (2) any bill providing for appropriations related to the Budget Bill indicates that the credit factor for this credit is zero for that taxable year, in which case the existing amounts of $120 and $60, as described above, respectively, would be the credit amounts for that taxable year. The bill would require, upon the expiration of any suspension, the credit amounts for the immediately proceeding taxable year to be an amount equal to the increased credit amounts, as specified.
The bill, for credits allowable for taxable years beginning on or after January 1, 2019, would provide that the credit amount in excess of the qualified renter’s liability would be refundable and paid from the Tax Relief and Refund Account to the qualified renter upon appropriation by the Legislature.
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 the “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:
(I) Two hundred twenty dollars ($220) if the qualified renter has no dependents as defined in Section 17056.
(II) Four hundred thirty-four dollars ($434) if the qualified renter has one or more dependents as defined in Section 17056.
(iii) For taxable years beginning on or after January 1, 2020, the credit amounts in clause (ii) shall be the amount recomputed pursuant to subdivision (k), except as otherwise provided in subdivision (l), (m), or (n).
(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:
(I) Two hundred seventeen twenty dollars ($217) ($220) if the qualified renter has no dependents as defined in Section 17056.
(II) Four hundred thirty-four dollars ($434) if the qualified renter has one or more dependents as defined in Section 17056.
(iii) For taxable years beginning on or after January 1, 2020, the credit amounts in clause (ii) shall be the amount recomputed pursuant to subdivision (k), except as otherwise provided in subdivision (l), (m), or (n).
(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 that constituted the individual’s 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 they or their 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 that 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 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 adjusted gross income amounts pursuant to this subdivision, the adjusted gross income 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) For each taxable year beginning on or after January 1, 2020, the Franchise Tax Board shall recompute the credit amount for the immediately preceding taxable year under clause (ii) of subparagraphs (A) and (B) of paragraph (1) 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 that 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) and (B) of paragraph (1) 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) For taxable years beginning on or after January 1, 2020, the Governor may suspend, for a taxable year, the amount of the credit allowed under clause (ii) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a) by a 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) and (B) of paragraph (1) of subdivision (a) be suspended until the end of the economic emergency.
(B) 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, and the suspension shall expire on the first day after the end of the taxable year to which the proclamation applies.
(2) If the amount of the credit allowed under clause (ii) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a) is suspended by the Governor pursuant to paragraph (1), the credit allowed to a qualified renter for that taxable year shall be equal to the credit amounts set forth in clause (i) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a).
(3) The Governor may issue additional proclamations upon the expiration of a proclamation if an economic emergency continues to exist and all of the requirements of this subdivision are met.
(m) For taxable years beginning on or after January 1, 2020, the amount of the credit allowed under clause (ii) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a) may be suspended for any taxable year by any bill providing for appropriations related to the Budget Bill that indicates that the credit factor for the credit allowed by this section is zero for that taxable year. If the amount of the credit allowed under clause (ii) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a) is suspended pursuant to this subdivision, the credit allowed to a qualified renter for that taxable year shall be equal to the credit amounts set forth in clause (i) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a).
(n) (1) Subdivision (k) shall not apply during a taxable year in which the credit is suspended pursuant to subdivision (l) or (m).
(2) Upon the expiration of any suspension of the credit allowed by this section pursuant to subdivision (l) or (m), the credit amount allowed for the immediately proceeding taxable year shall be: An amount equal to the credit amounts set forth in clause (ii) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a) for the taxable year immediately preceding the taxable year in which no suspension occurred, including any recomputation of those credit amounts under subdivision (k) previously made for any taxable years beginning on or after January 1, 2020. However However, the credit amounts shall not be recomputed pursuant to subdivision (k) for that taxable year. The recomputation pursuant to subdivision (k) of the applicable credit amount shall commence again the following taxable year, unless the credit is suspended pursuant to subdivision (l) or (m).
(o) For taxable years beginning on or after January 1, 2019, notwithstanding Section 19611, 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, shall be paid from the Tax Relief and Refund Account and refunded to the qualified renter upon appropriation by the Legislature.

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.