Amended in Assembly March 12, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 321

Introduced by Assembly Member Chávez

February 13, 2015

An act to begin delete amend Section 17001 of end delete begin insert add Section 17140.7 to end insert the Revenue and Taxation Code, relating to taxation begin insert , to take effect immediately, tax levy end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 321, as amended, Chávez. begin delete Personal income tax. end delete begin insert Personal income taxes: exclusion: servicemembers. end insert

begin insert

The Personal Income Tax Law imposes a tax on individual taxpayers measured by the taxpayer’s taxable income for the taxable year, but excludes certain items of income from the computation of tax, including an exclusion for compensation for military or naval service performed by a nonresident while domiciled within the state.

end insert begin insert

This bill would, for taxable years beginning on or after January 1, 2015, exclude from gross income, income of active duty servicemembers while on active duty in this state, while hospitalized in this state from an injury received during active duty, and for a 12-month period after being honorably discharged while in this state if that income is derived from his or her position as a servicemember.

end insert begin insert

This bill would take effect immediately as a tax levy.

end insert begin delete

The Personal Income Tax Law imposes taxes on taxable income, as provided.

end delete begin delete

This bill would make a nonsubstantive change to the provision that names that law.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 17140.7 is added to the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

begin insert

begin insert 17140.7. end insert   

(a) Gross income does not include any income
received by a servicemember in the United States Armed Forces,
in the reserve component of the United States Armed Forces, or
in the National Guard, derived from his or her position as a
servicemember, while serving his or her active duty in the state.

(b) Gross income does not include any income received by a
servicemember separated from the United States Armed Forces,
the reserve components of the United States Armed Forces, or the
National Guard, for 12 calendar months from the date he or she
is honorably discharged, derived from his or her position as a
servicemember, while located in the state.

(c) Gross income does not include any income received by a
service member hospitalized within the state for an injury received
while on active duty in the United States Armed Forces, in the
reserve components of the United States Armed Forces, or in the
National Guard, derived from his or her position as a
servicemember, during the period of hospitalization.

(d) The exclusions allowed under this section shall be allowed
cumulatively.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end insert

begin delete

SECTION 1.  

Section 17001 of the Revenue and Taxation Code
is amended to read:

17001.  

This part shall be known and may be cited as the
“Personal Income Tax Law.”

end delete