BILL ANALYSIS Ó
AB 2326
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Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2326 (Dickinson) - As Amended: May 6, 2014
Policy Committee: Revenue &
Taxation Vote: 9-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill allows a deduction for costs of up to $100 incurred
adopting a pet from a qualified animal rescue organization. The
deduction sunsets on December 1, 2020, and will be available for
taxable years beginning on or after January 1, 2015, and before
January 1, 2020.
FISCAL EFFECT
Estimated decreases to GF revenue of $2.8 million, $3.0 million,
and $3.1 million in FY 2014-15, FY 2015-16, and FY 2016-17,
respectively.
COMMENTS
1) Purpose. According to the author, an estimated 800,000
animals are abandoned in California every year, leaving local
governments and nonprofit shelters to care for the animals.
Supporters claim the estimated that the cost to every taxpayer
in the United States to shelter tray animals is $3 per person,
which amounts to about $120 million annually for California
taxpayers. This bill is intended to promote the benefits to
animals, governments, and charities of adopting rather than
purchasing dogs and cats.
2) Modest Incentive. This bill is intended to encourage the
adoption of pets from qualified animal rescue organizations
with a maximum deduction of $100. Even at the top marginal
income tax rate of 12.3%, the deduction results in a total tax
savings of less than $13, and for most families, the tax
savings would be less than $10. The Committee may wish to
AB 2326
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consider whether that is a sufficient incentive to encourage
anyone who would not otherwise have considered adopting a
rescued animal to do so, and if so, whether that incentive
created justifies the cost to the state.
3) Deduction Clarification. At the time of this analysis, the
author was working on amendments to clarify that the deduction
would be allowed from a taxpayer's adjusted gross income
(i.e., "below the line"). Given that less than half of
individual California taxpayers itemize their deductions, and
given the overall cap on total itemized deductions under the
personal income tax law, this clarification would result in
many fewer taxpayers being eligible to claim the deduction,
and therefore significantly lower impact to GF revenue.
Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081