Bill Text: CA SB1149 | 2015-2016 | 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: principal residence.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2016-11-30 - From committee without further action. [SB1149 Detail]

Download: California-2015-SB1149-Introduced.html

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BILL NUMBER: SB 1149	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Stone

                        FEBRUARY 18, 2016

   An act to add Sections 17141.7 and 17205 to the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1149, as introduced, Stone. Personal income taxes: deduction:
individual home ownership savings accounts.
   The Personal Income Tax Law, in modified conformity with federal
income tax laws, allows various exclusions from gross income, and
allows various deductions in computing the income that is subject to
the taxes imposed by that law, including miscellaneous itemized
deductions that are allowed only to the extent that the aggregate
amount of those deductions exceeds 2% of adjusted gross income.
   This bill, on and after January 1, 2017, would allow a deduction,
not to exceed specified amounts, of the amount contributed in any
taxable year to an individual home ownership savings account, and
would exclude from gross income any income earned on the moneys
contributed to an individual home ownership savings account. The bill
would provide that a qualified taxpayer may withdraw amounts from an
individual home ownership savings account to pay for qualified
individual home ownership savings expenses, as defined, and would
provide that any amount withdrawn from that account that is not used
for these expenses would be included as income for that taxpayer. The
bill would define various terms for its purposes.
    This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17141.7 is added to the Revenue and Taxation
Code, to read:
   17141.7.  For each taxable year beginning on or after January 1,
2017, gross income does not include, under the same conditions as
provided in Section 408 of the Internal Revenue Code relating to
individual retirement accounts, any income accruing during the
taxable year to an individual home ownership savings account, as
defined in Section 17205.
  SEC. 2.  Section 17205 is added to the Revenue and Taxation Code,
to read:
   17205.  (a) For each taxable year beginning on or after January 1,
2017, there shall be allowed as a deduction an amount equal to the
amount contributed by a qualified taxpayer during the taxable year to
an individual home ownership savings account, not to exceed the
amounts specified in subdivision (b).
   (b) The deduction allowed under subdivision (a) shall not exceed
the following amounts:
   (1) Thirty thousand dollars ($30,000) for a qualified taxpayer who
is married filing a joint return, head of household, and surviving
spouses, as defined in Section 17046.
   (2) Fifteen thousand dollars ($15,000) in the case of a qualified
taxpayer filing a return other than as described in paragraph (1).
   (c) Any amount withdrawn from an individual home ownership savings
account shall be included in the income of the payee or distributee
for the taxable year in which the payment or distribution is made,
unless the payment or distribution is used to pay for the individual
home ownership savings expenses of a qualified taxpayer who
established the account.
   (d) For purposes of this section:
   (1) "Individual home ownership savings account" means a trust that
meets all of the following requirements:
   (A) Is designated as an individual home ownership savings account
by the trustee.
   (B) Is established for the exclusive benefit of any qualified
taxpayer establishing the account where the written governing
instrument creating the account provides for the following:
   (i) All contributions to the account are required to be in cash.
   (ii) The account is established to pay, pursuant to the
requirements and limitations of this section, for the qualified
individual home ownership savings expenses of a qualified taxpayer
establishing the account.
   (C) Is, except as otherwise required or authorized by this
section, subject to the same requirements and limitations as an
individual retirement account established under Section 408 of the
Internal Revenue Code, and any regulations adopted thereunder.
   (D) Is the only individual home ownership savings account
established by the qualified taxpayer.
   (2) "Qualified individual home ownership development expenses"
means expenses, including a downpayment or mortgage payment, paid or
incurred in connection with the purchase of a qualified taxpayer's
principal residence in California for use by that taxpayer who
established the individual home ownership savings account.
   (3) (A) "Qualified taxpayer" means any individual, or individual's
spouse, who had no present ownership interest in a principal
residence during the preceding three-year period ending on the date
of the purchase of the principal residence subject to the
contribution allowed by this section. A qualified taxpayer's gross
income per taxable year shall not exceed the following amounts:
   (1) One hundred thousand dollars ($100,000) for a qualified
taxpayer who is married filing a joint return, head of household, or
a surviving spouse, as defined in Section 17046.
   (2) Fifty thousand dollars ($50,000) for a qualified taxpayer
filing a return other than as described in paragraph (1).
   (B) For each taxable year beginning on or after January 1, 2017,
the Franchise Tax Board shall recompute the gross income amounts
described in paragraph (A) in the same manner as prescribed in
subdivision (h) of Section 17041.
   (4) "Trustee" shall have the same meaning as it does under Section
408 of the Internal Revenue Code relating to individual retirement
accounts, and any regulations adopted thereunder.
  SEC. 3.   This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.