Senate BillNo. 31


Introduced by Senator Gaines

December 1, 2014


An act to amend Section 17054 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

SB 31, as introduced, Gaines. Personal Income Tax Law: exemption credit: dependents.

The Personal Income Tax law authorizes a credit of $227 for each taxable year beginning on or after January 1, 1999, adjusted for inflation thereafter, as specified, for each dependent of a taxpayer.

This bill would increase that credit to $652 for taxable years beginning on or after January 1, 2015, which would be adjusted for inflation in taxable years thereafter.

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:

P1    1

SECTION 1.  

Section 17054 of the Revenue and Taxation Code,
2as amended by Section 2 of Chapter 478 of the Statutes of 2014,
3is amended to read:

4

17054.  

In the case of individuals, the following credits for
5personal exemption may be deducted from the tax imposed under
6Section 17041 or 17048, less any increases imposed under
7paragraph (1) of subdivision (d) or paragraph (1) of subdivision
8(e), or both, of Section 17560.

P2    1(a) In the case of a single individual, a head of household, or a
2married individual making a separate return, a credit of fifty-two
3dollars ($52).

4(b) In the case of a surviving spouse (as defined in Section
517046), or a husband and wife making a joint return, a credit of
6one hundred four dollars ($104). If one spouse was a resident for
7the entire taxable year and the other spouse was a nonresident for
8all or any portion of the taxable year, the personal exemption shall
9be divided equally.

10(c) In addition to any other credit provided in this section, in
11the case of an individual who is 65 years of age or over by the end
12of the taxable year, a credit of fifty-two dollars ($52).

13(d) (1) begin deleteA end deletebegin insertFor taxable years beginning before January 1, 2015, end insert
14a credit of two hundred twenty-seven dollars ($227) for each
15dependent (as defined in Section 17056) for whom an exemption
16is allowable under Section 151(c) of the Internal Revenue Code,
17relating to additional exemption for dependents. The credit allowed
18under thisbegin delete subdivisionend deletebegin insert paragraphend insert for taxable years beginning on
19or after January 1, 1999, shall not be adjusted pursuant to
20subdivision (i) for any taxable year beginning before January 1,
212000.

begin insert

22(2) For taxable years beginning on or after January 1, 2015, a
23credit of six hundred fifty-two dollars ($652) for each dependent,
24as defined in Section 17056, for whom an exemption is allowable
25under Section 151(c) of the Internal Revenue Code, relating to
26additional exemption for dependents. The credit allowed under
27this paragraph for taxable years beginning on or after January 1,
282015, shall be computed, as otherwise provided in subdivision (i),
29only for taxable years beginning on or after January 1, 2016.

end insert
begin delete

30(2)

end delete

31begin insert(3)end insert (A) For taxable years beginning on or after January 1, 2015,
32a credit shall not be allowed under paragraph (1) with respect to
33any individual unless the identification number, as defined in
34Section 6109 of the Internal Revenue Code, of that individual is
35included on the return claiming the credit.

36(B) A disallowance of a credit due to the omission of a correct
37identification number required under this paragraph, may be
38assessed by the Franchise Tax Board in the same manner as is
39provided by Section 19051 in the case of a mathematical error
40appearing on the return. A claimant shall have the right to claim
P3    1a credit or refund of adjusted amounts within the period provided
2in Section 19306, 19307, 19308, or 19311, whichever period
3expires later.

begin delete

4(3)

end delete

5begin insert(4)end insert (A) For taxable years beginning on or after January 1, 2009,
6the credit allowed under paragraph (1) for each dependent shall
7be equal to the credit allowed under subdivision (a). This
8subparagraph shall cease to be operative for taxable years beginning
9on or after January 1, 2011, unless the Director of Finance makes
10the notification pursuant to Section 99040 of the Government
11Code, in which case this subparagraph shall cease to be operative
12for taxable years beginning on or after January 1, 2013.

13(B) For taxable years that subparagraph (A) ceases to be
14operative, the credit allowed under paragraph (1) for each
15dependent shall be equal to the amount that would be allowed if
16subparagraph (A) had never been operative.

17(e) A credit for personal exemption of fifty-two dollars ($52)
18for the taxpayer if he or she is blind at the end of his or her taxable
19year.

20(f) A credit for personal exemption of fifty-two dollars ($52)
21for the spouse of the taxpayer if a separate return is made by the
22taxpayer, and if the spouse is blind and, for the calendar year in
23which the taxable year of the taxpayer begins, has no gross income
24and is not the dependent of another taxpayer.

25(g) For the purposes of this section, an individual is blind only
26if either (1) his or her central visual acuity does not exceed 20/200
27in the better eye with correcting lenses, or (2) his or her visual
28acuity is greater than 20/200 but is accompanied by a limitation
29in the fields of vision such that the widest diameter of the visual
30field subtends an angle no greater than 20 degrees.

31(h) In the case of an individual with respect to whom a credit
32under this section is allowable to another taxpayer for a taxable
33year beginning in the calendar year in which the individual’s
34taxable year begins, the credit amount applicable to that individual
35for that individual’s taxable year is zero.

36(i) For each taxable year beginning on or after January 1, 1989,
37the Franchise Tax Board shall compute the credits prescribed in
38this section. That computation shall be made as follows:

39(1) The California Department of Industrial Relations shall
40transmit annually to the Franchise Tax Board the percentage change
P4    1in the California Consumer Price Index for all items from June of
2the prior calendar year to June of the current calendar year, no
3later than August 1 of the current calendar year.

4(2) The Franchise Tax Board shall add 100 percent to the
5percentage change figure which is furnished to them pursuant to
6paragraph (1), and divide the result by 100.

7(3) The Franchise Tax Board shall multiply the immediately
8preceding taxable year credits by the inflation adjustment factor
9 determined in paragraph (2), and round off the resulting products
10to the nearest one dollar ($1).

11(4) In computing the credits pursuant to this subdivision, the
12credit provided in subdivision (b) shall be twice the credit provided
13in subdivision (a).

14

SEC. 2.  

This act provides for a tax levy within the meaning of
15Article IV of the Constitution and shall go into immediate effect.



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