Bill Text: CA SB1352 | 2017-2018 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Personal income taxes: credit: ABLE account contributions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2018-05-25 - May 25 hearing: Held in committee and under submission. [SB1352 Detail]

Download: California-2017-SB1352-Introduced.html

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CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 1352

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Introduced by Senator Stone

February 16, 2018

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An act to amend Sections 17016 and 17041 of, and to add Section 18502 to, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

SB 1352, as introduced, Stone. Personal income taxes: tax rates: residency.

The Personal Income Tax Law imposes taxes based upon taxable income of individuals, estates, and trusts at specified rates from 1% to 9.3%, as provided.

This bill, for taxable years beginning on or after January 1, 2018, would eliminate the income tax rates on specified taxable income below $100,000, as provided.

The Personal Income Tax Law presumes that an individual who spends in the aggregate more than 9 months of a taxable year in this state is a resident unless the presumption is overcome.

This bill would revise that presumption to provide that an individual who spends in the aggregate more than 6 months and one day of a taxable year in this state is a resident unless the presumption is overcome.

Existing income tax laws require every individual taxable under the Personal Income Tax Law that has certain amounts of adjusted gross income, or gross income, to make a return to the Franchise Tax Board. Existing law provides that specified required documents contain, or be verified by, a written declaration that is made under the penalty of perjury.

This bill would require those individuals taxable under the Personal Income Law, who file as nonresidents or part-time residents or who own real property within the state, to file an informational affidavit with the Franchise Tax Board that includes specified information about his or her contact with the state. By requiring the affidavit to be attested to under penalty of perjury, the bill would create a crime, thereby imposing a state-mandated local program.

The Personal Income Tax Law imposes a tax on the entire taxable income of a resident taxpayer and on taxable income of nonresidents derived from sources within the state. For purposes of computing taxable income, gross income of a nonresident includes only gross income from sources within this state.

This bill would provide that for a nonresident who owns property within California, taxable income means the product of the percentage of the taxable year spent in California, as determined by the affidavit described above, multiplied by all items of gross income and deductions, regardless of source.

This bill would include 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.

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.

Digest Key

Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 17016 of the Revenue and Taxation Code is amended to read:

17016.

 Every An individual who spends in the aggregate more than nine six months and one day of the taxable year within this State state shall be presumed to be a resident. The presumption may be overcome by satisfactory evidence that the individual is in the State state for a temporary or transitory purpose.

SEC. 2.

 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 is:	The tax is:
Not over $3,650  ........................	1% of the taxable income
Over $3,650 but not over $8,650  ........................	$36.50 plus 2% of the excess over $3,650
Over $8,650 but not over $13,650  ........................	$136.50 plus 4% of the excess over $8,650
Over $13,650 but not over $18,950  ........................	$336.50 plus 6% of the excess over $13,650
Over $18,950 but not over $23,950  ........................	$654.50 plus 8% of the excess over $18,950
Over $23,950  ........................	$1,054.50 plus 9.3% of 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.

(2) (A) For taxable years beginning on or after January 1, 2018, the income tax rates set forth in paragraph (1) shall be 0 percent for taxable incomes not over one hundred thousand dollars ($100,000), as annually adjusted pursuant to this section.

(B) For purposes of applying subdivision (h) to annually recompute the income tax brackets prescribed in subparagraph (A), “January 1, 2019” shall be substituted in lieu of “January 1, 1988.”

(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 is:	The tax is:
Not over $7,300  ........................	1% of the taxable income
Over $7,300 but not over $17,300  ........................	$73 plus 2% of the excess over $7,300
Over $17,300 but not over $22,300  ........................	$273 plus 4% of the excess over $17,300
Over $22,300 but not over $27,600  ........................	$473 plus 6% of the excess over $22,300
Over $27,600 but not over $32,600  ........................	$791 plus 8% of the excess over $27,600
Over $32,600  ........................	$1,191 plus 9.3% of the 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.

(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 state, as defined by Section 17014), 17014, all items of gross income and all deductions, regardless of source.

(B) For any part of the taxable year during which the taxpayer who does not own property within the state and 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).

(C) For any part of the taxable year during which the taxpayer who owns property within the state and was not a resident of this state, the product of the percentage of the taxable year spent in California, as determined by the affidavit filed pursuant to Section 18502, multiplied by all items of gross income and deductions, regardless of source.

(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. 3.

 Section 18502 is added to the Revenue and Taxation Code, to read:

18502.

 (a) Each taxable year beginning on or after January 1, 2019, every qualified individual shall file an informational affidavit with the Franchise Tax Board, on or before the due date of a return filed pursuant to this part, with the following information, where applicable:

(1) The amount of time spent in California versus the amount of time spent outside of California during the taxable year.

(2) The location of the individual’s spouse or registered domestic partner.

(3) The location of the individual’s dependents.

(4) The state that issued the individual’s driver’s license or state identification.

(5) The state where the individual’s vehicles are registered.

(6) The state where the individual maintains his or her professional licenses.

(7) The state where the individual is registered to vote.

(8) The location of banks where the individual maintains accounts.

(9) The origination point of the individual’s financial transactions.

(10) The location of the individual’s medical professional and other healthcare providers, accountants, and attorneys.

(11) The location of any social ties to the state, including, but not limited to, a place of worship, professional associations, or social and country clubs of which the individual is a member.

(12) The location of any real property and investments.

(13) The permanency of work assignments within the state.

(b) For purposes of this section, “qualified individual” means either of the following:

(1) An individual taxable under Part 10 (commencing with Section 17001) who is filing a return as a nonresident or a part-year resident.

(2) An individual who owns real property within the state.

(c) The informational affidavit shall be attached to the individual’s return, where applicable.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SEC. 5.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.