Bill Text: CA AB1582 | 2017-2018 | Regular Session | Amended

California Assembly Bill 1582 (Prior Session Legislation)

Bill Title: Taxation: renters’ credit: high-cost areas.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2018-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB1582 Detail]

Download: California-2017-AB1582-Amended.html

Amended IN Assembly May 09, 2017

Amended IN Assembly March 29, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 1582

Introduced by Assembly Member Bonta

February 17, 2017

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

AB 1582, as amended, Bonta. Taxation: renters’ credit: high-cost areas.

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 ~~married couples~~ spouses filing joint returns, heads of household, and surviving spouses if adjusted gross income is ~~$50,000,~~ $50,000 or less, as ~~adjusted, or less,~~ currently adjusted to $78,125, and in the amount of $60 for other individuals if adjusted gross income is ~~$25,000,~~ $25,000 or less, as ~~adjusted, or less.~~ currently adjusted to $39,026.

This bill, for taxable years beginning on or after January 1, 2017, would ~~increase the adjusted gross income threshold amounts to unspecified amounts for~~ increase that credit from $120 to $360 and from $60 to $180. For taxpayers living in a high-cost area, as ~~defined.~~ defined, the bill would increase the adjusted gross income limitation for spouses filing joint returns, heads of household, and surviving spouses to $97,656 and for other individuals to $48,828.

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 is as follows:

(A) (i) For spouses filing joint returns, heads of household, and surviving spouses, as defined in Section 17046, the credit shall be equal to ~~one hundred twenty dollars ($120)~~ three hundred sixty dollars ($360) if adjusted gross income is fifty thousand dollars ($50,000) or less.

(ii) For taxable years beginning on or after January 1, 2017, the credit shall be equal to three hundred sixty dollars ($360) if adjusted gross income ~~shall be ____dollars ($____)~~ is ninety-seven thousand six hundred fifty-six dollars ($97,656) or less for taxpayers described in clause (i) living in a high-cost area.

(B) (i) For other individuals, the credit shall be equal to ~~sixty dollars ($60)~~ one hundred eighty dollars ($180) if adjusted gross income is twenty-five thousand dollars ($25,000) or less.

(ii) For taxable years beginning on or after January 1, 2017, the credit shall be equal to one hundred eighty dollars ($180) if adjusted gross income ~~shall be ____dollars ($____)~~ is forty-eight thousand eight hundred twenty-eight dollars ($48,828) or less for taxpayers described in clause (i) living in a high-cost area.

(2) Except as provided in subdivision (b), spouses shall receive but 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).

(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 another 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, both of the following shall apply:

(1) “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.

(2) “High-cost area” means a geographic region of the state where the fair market rent, as calculated by the United States Department of Housing and Urban Development, is greater than 10 percent of the average statewide fair market rent.

(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 clause (i) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a). For each taxable year beginning on or after January 1, 2018, the Franchise Tax Board shall recompute the adjusted gross income amounts set forth in clause (ii) of subparagraphs (A) and (B) of paragraph (1) of subdivision (a). These computations 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 amounts in 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 amounts pursuant to this subdivision, the 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).