SB 537, as introduced, Cannella. Income taxes: deductions: amounts due on real property tax bill.
The Personal Income Tax Law and the Corporation Tax Law authorize various deductions in computing income that is subject to tax under those laws.
This bill would allow a deduction, under both of those laws, of amounts paid by the taxpayer on the taxpayer’s real property tax bill. The deduction under the Personal Income Tax Law would be an itemized deduction.
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:
The Legislature finds and declares all of the
2following:
3(a) It is a well-established federal position that a deduction for
4personal property taxes is allowed to the extent the taxes are based
5upon the assessed value of the property, also known as ad valorem
6taxes, under Section 164 of the Internal Revenue Code.
P2 1(b) It is also a well-established federal position that a deduction
2for real property taxes is not limited to ad valorem taxes under
3Section 164 of the Internal Revenue Code.
4(c) The Internal Revenue Code limits a deduction for personal
5property taxes to ad valorem taxes, but no such limitation
applies
6to a deduction for real property taxes.
7(d) It has been concluded that assessments under the Mello-Roos
8Community Facilities Act of 1982 and certain other special taxes
9in California are deductible under Section 164 of the Internal
10Revenue Code even though they are not based upon the assessed
11value of the property.
12(e) California law conforms to the federal law described in
13subdivisions (a) to (d), inclusive, and California taxpayers are
14currently deducting taxes that are not based upon the assessed
15value of the property.
16(f) California is in a unique position with respect to the number
17of taxpayers subject to assessments under the Mello-Roos
18Community Facilities Act of 1982 and certain other special taxes,
19and California taxpayers have a right to protect their current
20property tax
deduction.
Section 17239 is added to the Revenue and Taxation
22Code, to read:
For each taxable year beginning on or after January 1,
242015, there shall be allowed as an itemized deduction the amount
25paid by the taxpayer for the amount due on the taxpayer’s real
26property tax bill, including, but not limited to, real property taxes,
27personal property taxes, special taxes, special assessments, fees,
28or other charges.
Section 24356.9 is added to the Revenue and Taxation
30Code, to read:
For each taxable year beginning on or after January
321, 2015, there shall be allowed as a deduction the amount paid by
33the taxpayer for the amount due on the taxpayer’s real property
34tax bill, including, but not limited to, real property taxes, personal
35property taxes, special taxes, special assessments, fees, or other
36charges.
This act provides for a tax levy within the meaning of
38Article IV of the Constitution and shall go into immediate effect.
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