The Personal Income Tax Law imposes a tax on individual taxpayers measured by the taxpayer’s taxable income for the taxable year, but, in modified conformity with federal income tax laws, allows various exclusions from gross income, including an exclusion for military compensation of a servicemember not domiciled in this state for services performed or from sources within this state. Existing law limits the collection and use of taxpayer information and provides that any unauthorized use of this information is punishable as a misdemeanor.
This bill, for taxable years beginning on or after January 1, 2020, and before January 1, 2030, would exclude from gross income all income from any source
active duty pay received by active duty servicemembers a servicemember while on active duty in this state and all income for an military retirement pay received during the applicable time period, as defined, after being honorably discharged.
This bill would require the Department of Veterans Affairs to compile specified information relating to the exclusion, in an aggregate manner, and report to the Legislative Analyst’s Office on or before December 1, 2030, to allow the Legislature to measure whether the exclusion is meeting specified goals of the bill,
as provided. This bill would require the Franchise Tax Board to provide specified information to the department for purposes of the report and would make taxpayer information received by the department subject to limitation on the collection and use of that information. By expanding the scope of a crime, this bill would impose a state-mandated local program.
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 no reimbursement is required by this act for a specified reason.
This bill would take effect immediately as a tax levy.