BILL NUMBER: SB 1172	CHAPTERED  06/24/04

	CHAPTER  62
	FILED WITH SECRETARY OF STATE  JUNE 24, 2004
	APPROVED BY GOVERNOR  JUNE 23, 2004
	PASSED THE ASSEMBLY  JUNE 14, 2004
	PASSED THE SENATE  APRIL 16, 2004

INTRODUCED BY   Senator Ackerman

                        FEBRUARY 4, 2004

   An act to amend Section 17951 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1172, Ackerman.  Personal income tax:  gross income:
nonresident or part-year resident.
   The Personal Income Tax Law imposes a tax on the entire taxable
income of an individual taxpayer subject to that law, but provides
for a specified treatment of the income of nonresidents and part-year
residents.  For purposes of calculating the taxable income of a
nonresident or part-year resident, the gross income of a nonresident
or part-year resident includes only the gross income derived by the
taxpayers from California sources.  Existing federal laws limit or
preempt California's ability to tax the California source income of
certain nonresidents and part-year residents.
   This bill, in specified conformity with those federal laws, would
clarify existing law by expressly providing that California may not
tax the California source income of certain nonresidents and
part-year residents.


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


  SECTION 1.  Section 17951 of the Revenue and Taxation Code is
amended to read:
   17951.  (a) For purposes of computing "taxable income of a
nonresident or part-year resident" under paragraph (1) of subdivision
(i) of Section 17041, in the case of nonresident taxpayers the gross
income includes only the gross income from sources within this
state.
   (b) Notwithstanding subdivision (a), the gross income of a
nonresident taxpayer does not include income not subject to the
Personal Income Tax Law (Part 10 (commencing with Section 17001) of
Division 2) by operation of the following federal laws:
   (1) Section 11108 of Title 46, United States Code, relating to
compensation for the performance of duties of certain merchant
seamen.
   (2) Section 11502 of Title 49, United States Code, relating to
compensation of an employee of a rail carrier.
   (3) Section 14503 of Title 49, United States Code, relating to
compensation of an employee of a motor carrier.
   (4) Section 40116 of Title 49, United States Code, relating to the
pay of an employee of an air carrier.
   (5) Section 571 of Title 50, Appendix, United States Code,
relating to military compensation of service members.