BILL NUMBER: AB 1130 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 2, 2011
AMENDED IN ASSEMBLY MARCH 25, 2011
INTRODUCED BY Assembly Member Skinner
FEBRUARY 18, 2011
An act to amend Section 17041 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1130, as amended, Skinner. Income taxes: tax rates.
The Personal Income Tax Law imposes a tax upon taxable income at
various rates depending upon the amount of that income.
This bill would, for taxable years beginning on or after January
1, 2011, increase the tax rate applicable to
impose an additional tax rate upon taxable income over $500,000
to of 10.3%.
This bill would constitute a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
This act provides for a tax levy within the meaning of Article IV
of the Constitution and shall go into immediate effect.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17041 of the Revenue and Taxation Code is
amended to read:
17041. (a) (1) There shall be imposed for each taxable year upon
the entire taxable income of every resident of this state who is not
a part-year resident, except the head of a household as defined in
Section 17042, taxes in the following amounts and at the following
rates upon the amount of taxable income computed for the taxable year
as if the resident were a resident of this state for the entire
taxable year and for all prior taxable years for any carryover items,
deferred income, suspended losses, or suspended deductions:
If the taxable income The tax is:
is:
Not over $3,650........ 1% of the taxable income
Over $3,650 but $36.50 plus 2% of the
not excess
over $8,650............ over $3,650
Over $8,650 but $136.50 plus 4% of the
not excess
over $13,650........... over $8,650
Over $13,650 but $336.50 plus 6% of the
not excess
over $18,950........... over $13,650
Over $18,950 but $654.50 plus 8% of
not the
over $23,950........... excess
over $18,950
$1,054.50 plus 9.3% of
Over $23,950........... the
excess
over $23,950
(2) For taxable years beginning on or after January 1, 2009, and
before January 1, 2011, the percentages specified in the table in
paragraph (1) shall be increased by adding 0.25 percent to each
percentage.
(3) For taxable years beginning on or after January 1, 2011,
the 9.3 percent rate referenced in paragraph (1) shall
instead be imposed at the rate of 10.3 percent upon taxable income
over five hundred thousand dollars ($500,000). The provisions of
Section the income tax brackets and rates set forth in
paragraph (1) are modified for that portion of taxable income that
is over five hundred thousand dollars ($500,000), so that the tax
rate is 10.3 percent of the excess over five hundred thousand dollars
($500,000). The income tax bracket specified in this paragraph shall
be recomputed, as otherwise provided in subdivision (h), but only
for taxable years beginning on or after January 1, 2011. The
provisions of Section 17045 shall not apply to the tax imposed
by this paragraph.
(b) (1) There shall be imposed for each taxable year upon the
taxable income of every nonresident or part-year resident, except the
head of a household as defined in Section 17042, a tax as calculated
in paragraph (2).
(2) The tax imposed under paragraph (1) shall be calculated by
multiplying the "taxable income of a nonresident or part-year
resident," as defined in subdivision (i), by a rate (expressed as a
percentage) equal to the tax computed under subdivision (a) on the
entire taxable income of the nonresident or part-year resident as if
the nonresident or part-year resident were a resident of this state
for the taxable year and as if the nonresident or part-year resident
were a resident of this state for all prior taxable years for any
carryover items, deferred income, suspended losses, or suspended
deductions, divided by the amount of that income.
(c) (1) There shall be imposed for each taxable year upon the
entire taxable income of every resident of this state who is not a
part-year resident for that taxable year, when the resident is the
head of a household, as defined in Section 17042, taxes in the
following amounts and at the following rates upon the amount of
taxable income computed for the taxable year as if the resident were
a resident of the state for the entire taxable year and for all prior
taxable years for carryover items, deferred income, suspended
losses, or suspended deductions:
If the taxable income The tax is:
is:
Not over $7,300......... 1% of the taxable income
Over $7,300 but $73 plus 2% of the
not excess
over $17,300............ over $7,300
Over $17,300 but $273 plus 4% of the
not excess
over $22,300............ over $17,300
Over $22,300 but $473 plus 6% of the
not excess
over $27,600............ over $22,300
Over $27,600 but $791 plus 8% of the
not excess
over $32,600............ over $27,600
$1,191 plus 9.3% of the
Over $32,600............ excess
over $32,600
(2) For taxable years beginning on or after January 1, 2009, and
before January 1, 2011, the percentages specified in the table in
paragraph (1) shall be increased by adding 0.25 percent to each
percentage.
(3) For taxable years beginning on or after January 1, 2011,
the 9.3 percent rate referenced in paragraph (1) shall
instead be imposed at the rate of 10.3 percent upon taxable income
over five hundred thousand dollars ($500,000). the
income tax brackets and rates set forth in paragraph (1) are modified
for that portion of taxable income that is over five hundred
thousand dollars ($500,000), so that the tax rate is 10.3 percent of
the excess over five hundred thousand dollars ($500,000). The income
tax bracket specified in this paragraph shall be recomputed, as
otherwise provided in subdivision (h), but only for taxable years
beginning on or after January 1, 2011.
(d) (1) There shall be imposed for each taxable year upon the
taxable income of every nonresident or part-year resident when the
nonresident or part-year resident is the head of a household, as
defined in Section 17042, a tax as calculated in paragraph (2).
(2) The tax imposed under paragraph (1) shall be calculated by
multiplying the "taxable income of a nonresident or part-year
resident," as defined in subdivision (i), by a rate (expressed as a
percentage) equal to the tax computed under subdivision (c) on the
entire taxable income of the nonresident or part-year resident as if
the nonresident or part-year resident were a resident of this state
for the taxable year and as if the nonresident or part-year resident
were a resident of this state for all prior taxable years for any
carryover items, deferred income, suspended losses, or suspended
deductions, divided by the amount of that income.
(e) There shall be imposed for each taxable year upon the taxable
income of every estate, trust, or common trust fund taxes equal to
the amount computed under subdivision (a) for an individual having
the same amount of taxable income.
(f) The tax imposed by this part is not a surtax.
(g) (1) Section 1(g) of the Internal Revenue Code, relating to
certain unearned income of children taxed as if parent's income,
shall apply, except as otherwise provided.
(2) Section 1(g)(7)(B)(ii)(II) of the Internal Revenue Code is
modified, for purposes of this part, by substituting "1 percent" for
"10 percent."
(h) For each taxable year beginning on or after January 1, 1988,
the Franchise Tax Board shall recompute the income tax brackets
prescribed in subdivisions (a) and (c). That computation shall be
made as follows:
(1) The California 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 calendar year, no later
than August 1 of the current calendar year.
(2) The Franchise Tax Board shall do both of the following:
(A) Compute an inflation adjustment factor by adding 100 percent
to the percentage change figure that is furnished pursuant to
paragraph (1) and dividing the result by 100.
(B) Multiply the preceding taxable year income tax brackets by the
inflation adjustment factor determined in subparagraph (A) and round
off the resulting products to the nearest one dollar ($1).
(i) (1) For purposes of this part, the term "taxable income of a
nonresident or part-year resident" includes each of the following:
(A) For any part of the taxable year during which the taxpayer was
a resident of this state (as defined by Section 17014), all items of
gross income and all deductions, regardless of source.
(B) For any part of the taxable year during which the taxpayer was
not a resident of this state, gross income and deductions derived
from sources within this state, determined in accordance with Article
9 of Chapter 3 (commencing with Section 17301) and Chapter 11
(commencing with Section 17951).
(2) For purposes of computing "taxable income of a nonresident or
part-year resident" under paragraph (1), the amount of any net
operating loss sustained in any taxable year during any part of which
the taxpayer was not a resident of this state shall be limited to
the sum of the following:
(A) The amount of the loss attributable to the part of the taxable
year in which the taxpayer was a resident.
(B) The amount of the loss which, during the part of the taxable
year the taxpayer is not a resident, is attributable to California
source income and deductions allowable in arriving at taxable income
of a nonresident or part-year resident.
(3) For purposes of computing "taxable income of a nonresident or
part-year resident" under paragraph (1), any carryover items,
deferred income, suspended losses, or suspended deductions shall only
be includable or allowable to the extent that the carryover item,
deferred income, suspended loss, or suspended deduction was derived
from sources within this state, calculated as if the nonresident or
part-year resident, for the portion of the year he or she was a
nonresident, had been a nonresident for all prior years.
SEC. 2. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.