BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Kevin Murray, Chairman
1827 (Migden)
Hearing Date: 5/15/06 Amended: 5/2/06
Consultant: Mark McKenzie Policy Vote: RevTax(4-2)
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BILL SUMMARY:
SB 1827 would require registered domestic partners to file
personal income tax returns as either "married filing jointly,"
or "married filing separately."
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Fiscal Impact (in thousands)
Major Provisions 2006-07 2007-08 2008-09 Fund
Income tax loss $8,000 $9,000 GF
FTB programming unknown, potentially significant costsGF
---------see staff comments--------
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
For federal tax return purposes, the status of an individual may
be identified as married filing jointly, married filing
separately, head of household, single, or qualified widow(er)
with dependent child. For federal tax purposes, registered
domestic partners only have the filing choices of single or head
of household. Existing state law generally requires an
individual to report the same filing status on the state income
tax return as reported on the federal return. Therefore,
registered domestic partners only have the filing choices of
single or head of household in California.
Registered domestic partnerships include same-sex partnerships
and opposite-sex partnerships in which one or both partners are
age 62 or older and receive Social Security benefits. The
Secretary of State estimates that the total number of registered
domestic partners in California will be 40,950 by December 2007.
This bill is intended to provide registered domestic partners
with the same filing status rights and burdens as married
persons. Specifically, this bill would require registered
domestic partners to file a California personal tax return as
"married filing jointly," or "married filing separately" by
applying the standards applicable to married couples under
federal income tax law. This bill would also specify a rule
pertaining to the reporting of adjusted gross income, and would
revise provisions of existing law to treat registered domestic
partners as married persons for purpose of filing status.
The Franchise Tax Board (FTB) estimates that, pursuant to this
bill, 59% of registered domestic partners would see a reduction
in taxes, 29% would experience no change in taxes, and 12% would
experience an increase in taxes. This bill would result in a
Personal Income Tax revenue loss of approximately $8 million in
2008-09.
-continued-
Page 2
SB 1827 (Migden)
STAFF NOTES that FTB uses automated systems to compare taxpayer
information, such as name and social security number, to files
received from other state and federal agencies, including the
Internal Revenue Service. Current law generally requires a
taxpayer to report the same filing status on federal and state
tax returns, and FTB's information system have the ability to
verify joint returns based on the primary taxpayer's
information. Since this bill would result in a different
taxpayer filing status on state and federal returns for
registered domestic partners, FTB anticipates a delay in the
ability of automated systems to compare taxpayer information.
These systems would require additional programming and testing,
which is expected to have an unknown, but potentially
significant fiscal impact.