Bill Text: CA AB427 | 2019-2020 | Regular Session | Introduced

California Assembly Bill 427 (Prior Session Legislation)

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

Bill Title: Personal income taxes: exclusion: uniformed services: retirement pay.

Spectrum: Strong Partisan Bill (Republican 15-1)

Status: (Failed) 2020-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB427 Detail]

Download: California-2019-AB427-Introduced.html

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill

No. 427

Introduced by Assembly Member Brough
(Principal coauthor: Assembly Member Choi)
(Coauthors: Assembly Members Chen, Dahle, Flora, Gallagher, Gray, Lackey, Mathis, Melendez, Patterson, Voepel, and Waldron)
(Coauthors: Senators Bates, Chang, and Jones)

February 07, 2019

An act to add Section 17132.9 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

AB 427, as introduced, Brough. Personal income taxes: exclusion: uniformed services: retirement pay.

The Personal Income Tax Law imposes a tax on individual taxpayers measured by the taxpayer’s taxable income for the taxable year, but excludes certain items of income from the computation of tax, including an exclusion for combat-related special compensation.

This bill, for taxable years beginning on or after January 1, 2020, and before January 1, 2030, would exclude from gross income specified amounts of retirement pay received by a taxpayer from the federal government for service performed in the uniformed services, as defined, during the taxable year.

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 17132.9 is added to the Revenue and Taxation Code, to read:

17132.9.

(a) For taxable years beginning on or after January 1, 2020, and before January 1, 2030, gross income shall not include retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year in an amount equal to the following:

(1) For the first taxable year in which the exclusion provided by this section is allowed to the taxpayer and the first following taxable year beginning before January 1, 2030, 50 percent of the amount of retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year.

(2) For the second and third taxable years beginning before January 1, 2030, following the taxable year in which the exclusion provided by this section is first allowed to the taxpayer, 75 percent of the amount of retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year.

(3) For the fourth taxable year following the taxable year beginning before January 1, 2030, in which the exclusion provided by this section is first allowed to the taxpayer, 100 percent of the amount of retirement pay received by a taxpayer from the federal government for service in the uniformed services during the taxable year.

(b) For purposes of this section, “uniformed services” means Armed Forces of the United States of America, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, and the commissioned corps of the United States Public Health Service.