BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1827|
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THIRD READING
Bill No: SB 1827
Author: Migden (D)
Amended: 5/2/06
Vote: 21
SENATE REVENUE & TAXATION COMMITTEE : 4-2, 4/26/06
AYES: Machado, Alquist, Cedillo, Scott
NOES: Dutton, Runner
NO VOTE RECORDED: Poochigian
SENATE APPROPRIATIONS COMMITTEE : 8-5, 5/25/06
AYES: Murray, Alarcon, Alquist, Escutia, Florez, Ortiz,
Romero, Torlakson
NOES: Aanestad, Ashburn, Battin, Dutton, Poochigian
SUBJECT : Taxation: domestic partners
SOURCE : Equality California
DIGEST : This bill requires registered domestic partners
to file personal income tax returns, as either (1) married
filing joint, or (2) married filing separate.
ANALYSIS : The Personal Income Tax Law imposes tax on
taxable income and provides, among other things, that
specified definitions govern the construction of that law.
Existing law allows married couples to file joint or
separate state tax returns, as specified.
This bill allows registered domestic partners to file joint
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or separate state tax returns, as specified.
This bill:
1. Requires registered domestic partners to file a personal
income tax return jointly or separately by applying the
standards applicable to married couples under federal
income tax law.
2. Provides a rule to determine the application of limits
based on adjusted gross income for domestic partners by
combining the amounts reflected as adjusted gross income
on the federal income tax return of each domestic
partner.
3. Revises existing provisions of law to treat registered
domestic partners as married persons for purposes of
filing status as follows:
A. Domestic partners may file separate returns for
any taxable year where a joint return has already
been filed after the original filing period to file a
return has expired.
B. No joint return can be made if the domestic
partners have different taxable years, subject to
exception.
C. Extend to registered domestic partners the same
rules with respect to filing status that are
applicable in the event of the death of one or both
spouses.
Comments
According to supporters of the bill, there have been unfair
financial burdens on domestic partners and their families,
especially those they bear under the state's tax laws.
After the passage of the comprehensive domestic partnership
law enacted in 2003, registered domestic partners have
assumed mutual financial responsibility of each other on
the same terms as spouses. Yet, the state's laws deny
them equal treatment with respect to state income taxes
denying the convenience and financial benefits that
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sometimes come with filing a joint return. This bill,
according to the supporters, will make a significant
difference in the lives of thousands of same-sex couples in
the state and will be a statement of respectful inclusion
for all.
Prior legislation . AB 205 (Goldberg), Chapter 421,
Statutes of 2003, as introduced on January 28, 2003,
allowed domestic partners to file personal income tax
returns as either (1) married filing joint, or (2) married
filing separate. In addition, the bill, as chaptered, made
changes to various California laws regarding domestic
partners, including the creation of community property
rights. It also added language that required the same
filing status on a state income tax return as used on the
federal income tax return and provided that earned income
is not community property for state income tax purposes.
The provisions of joint filing were removed from the bill.
AB 25 (Migden), Chapter 893, Statutes of 2001, allowed
several existing taxpayer benefits for medical expenses and
health insurance benefits to include a taxpayer's domestic
partner and a domestic partner's dependents.
Other states' legislation . For tax periods ending on or
after May 16, 2004, Massachusetts recognizes the right of
same-sex couples to be married. As a consequence, same-sex
spouses that marry shall file Massachusetts income tax
returns as married filing joint or married filing separate.
Massachusetts is not a community property state.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Franchise Tax Board, this bill would have
the following fiscal impact:
2007-08: -$8 million
2008-09: -$9 million
2009-10: -$10 million
SUPPORT : (Verified 5/25/06)
Equality California (source)
Attorney General Bill Lockyer
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Lambda Letters Project
State Treasurer Phil Angelides
DLW:mel 5/26/06 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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