Amended in Assembly May 21, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 505

Introduced by Assembly Member Melendez

February 23, 2015

An act to add begin insert and repeal end insert Section 17132.9 begin delete to end delete begin insert of end insert the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 505, as amended, Melendez. Personal Income Tax Law: exclusion: veterans: concurrent retirement and disability pay.

The Personal Income Tax Law provides various exclusions from gross income in determining tax liability, including an exclusion for combat-related special compensation and death benefit payments received by a surviving spouse or other beneficiary designated by a military veteran, as prescribed, who dies or is killed in the performance of duty, as provided.

This bill would, for taxable years beginning on or after January 1, 2016, begin insert and before January 1, 2021, end insert exclude from gross income, as provided, concurrent retirement and disability pay payments received by begin delete an eligible individual, end delete begin insert a qualified retiree, end insert as defined.

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 1.  

Section 17132.9 is added to the Revenue and
Taxation Code, to read:

17132.9.  

(a) For each taxable year beginning on or after
January 1, 2016, begin insert and before January 1, 2021, end insert gross income shall
not include concurrent retirement and disability pay payments
received by begin delete an eligible individual end delete begin insert a qualified retiree end insert during the
taxable year.

(b) For purposes of this section:

(1) “Concurrent retirement and disability pay” means payments
received, as provided in Section 1414 of Title 10 of the United
States begin delete Code end delete begin insert Code, end insert by begin delete an eligible individual. end delete begin insert a qualified retiree. end insert

(2)  begin delete “Eligible individual” end delete begin insert “Qualified retiree end insert begin insert ” end insert means an active,
reserve, or retired member of the United States military who served
in active duty.

(3) Nothing in this section shall be construed to create any
inference with respect to the proper tax treatment of any concurrent
retirement and disability pay payments received before January 1,
2016.

begin insert

(c) This section shall remain in effect until December 1, 2021,
and as of that date is repealed.

end insert

SEC. 2.  

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