AB 321, as amended, Chávez. Personal income taxes: exclusion: servicemembers.
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.
This bill would, for taxable years beginning on or after January 1, 2015, exclude from gross income,begin delete income ofend deletebegin insert basic pay received byend insert active duty servicemembers while on active duty in thisbegin delete state,end deletebegin insert
state and any income receivedend insert while hospitalized in this state from an injury received during activebegin delete duty,end deletebegin insert dutyend insert 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.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 17140.7 is added to the Revenue and
2Taxation Code, to read:
(a) Gross income does not include anybegin delete incomeend deletebegin insert basic
4payend insert received by a servicemember in the United States Armed
5Forces, in the reservebegin delete componentend deletebegin insert componentsend insert of the United States
6Armed Forces, or in the National Guard, derived from his or her
7position as a servicemember, while serving his or her active duty
8in the state.
9(b) Gross income
does not include any income received by a
10servicemember separated from the United States Armed Forces,
11the reserve components of the United States Armed Forces, or the
12National Guard, for 12 calendar months from the date he or she is
13honorably discharged, derived from his or her position as a
14servicemember, while located in the state.
15(c) Gross income does not include any income received by a
16begin delete service memberend deletebegin insert servicememberend insert hospitalized within the state for
17an injury received while on active duty in the United States Armed
18Forces, in the reserve components of the United States Armed
19Forces, or in the National Guard, derived from his or her position
20as a servicemember,
during the period of hospitalization.
21(d) The exclusions allowed under this section shall be allowed
22cumulatively.
This act provides for a tax levy within the meaning
24of Article IV of the Constitution and shall go into immediate effect.
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