BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 347|
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THIRD READING
Bill No: AB 347
Author: Bass (D), et al
Amended: 2/16/10 in Senate
Vote: 21
SENATE REVENUE & TAXATION COMMITTEE : 5-0, 2/11/10
AYES: Wolk, Walters, Alquist, Ashburn, Padilla
SENATE APPROPRIATIONS COMMITTEE : 7-0, 2/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Walters, Yee
NO VOTE RECORDED: Cox, Denham, Liu, Wyland
ASSEMBLY FLOOR : 64-3, 1/27/10 - See last page for vote
SUBJECT : Income and corporation taxes: charitable tax
deductions:
Haiti earthquake victims
SOURCE : Author
DIGEST : This bill allows an individual or a corporate
taxpayer to deduct a charitable contribution made for the
relief of victims of the earthquake in Haiti on the
taxpayer's 2009 tax return, instead of the 2010 tax return.
ANALYSIS :
Existing federal law:
1. Allows taxpayers to claim an income tax deduction for
CONTINUED
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charitable contributions. The deduction is generally
available for the taxable year in which the contribution
is made. Thus, for taxpayers whose taxable year is the
calendar year, the tax benefit of a charitable
contribution made in January or February will not be
realized until the following calendar year when the tax
return is filed.
2. Requires taxpayers who claim a charitable deduction to
maintain a record of the contribution in the form of a
bank record or a written communication from the donee
organization showing the name of the organization, the
date of the contribution, and the contribution amount.
In addition to these recordkeeping requirements,
substantiation requirements apply in the case of
charitable contributions with a value of $250 or more.
Specifically, no charitable deduction is allowed for any
contribution of $250 or more unless the taxpayer
substantiates the contribution through a contemporaneous
written acknowledgement of the contribution by the
donee.
3. Allows individual and corporate taxpayers who make
qualified charitable contributions in support of the
Haiti earthquake relief between January 12, 2010, and
March 1, 2010, the choice of deducting those
contributions in either the 2009 tax year or the 2010
tax year. [Public Law (P.L.) 111-126]. Provides that,
in the case of those contributions, a telephone bill
showing the name of the donee organization, the date of
the contribution, and the amount of the contribution
shall be treated as meeting the prescribed recordkeeping
requirements of Internal Revenue Code (IRC) Section
170(f)(17).
Existing state law:
1. Conforms partially Person Income Tax (PIT) law to IRC
Section 170, as amended as of January 1, 2005, relating
to charitable contributions.
2. Provides that corporate charitable contributions are
limited to 10 percent of the corporation's net income.
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This bill:
1. Provides that, for purposes of the PIT law and the
Corporation Tax (CT) law, a taxpayer may treat a cash
contribution made after January 11, 2010, and before
March 1, 2010, for the relief of victims in areas
affected by the earthquake in Haiti on January 12, 2010,
as if the contribution was made on December 31, 2009,
and not in 2010.
2. Specifies that a deduction for those charitable
contributions must be, otherwise, allowable under
existing PIT or CT law.
3. Provides that a telephone bill that shows the name of
the donee organization, the date of the contribution,
and the amount of the contribution meets the
recordkeeping requirements of the PIT and CT laws.
4. Is repealed on December 1, 2011.
Comment
The author states that, "Last Friday, January 22, 2010,
President Obama signed into law, HR 4462, a bipartisan
measure that allows certain charitable contributions made
to earthquake relief efforts in Haiti to be deducted in the
2009 tax year, instead of waiting until the 2010 tax year
as provided by existing law. The outpouring of generosity
on the part of all Americans and Californians, in
particular, to the Haitian earthquake relief efforts has
been overwhelming, especially in these tough economic
times. The steps taken by the Congress and the President
will allow these charitable contributions to be deducted
from the 2009 federal income taxes.
"I have introduced AB 347, along with Principal co-authors,
Assembly Members Block and Calderon, to conform state law
to the recently enacted federal provisions, Public Law
111-126. Specifically, AB 347 will allow individual and
corporate taxpayers who make cash contributions to eligible
charitable organizations for earthquake relief efforts in
Haiti to take a tax deduction in the 2009 tax year. AB 347
makes it easier for more Californians to give and
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participate in the relief effort that our neighbors in
Haiti desperately need."
Purpose of this bill . This bill conforms California law to
the provisions of P.L. 111-126. Specifically, this bill
will give taxpayers the option of treating charitable cash
contributions to the Haiti relief effort made after January
11, 2010, and before March 1, 2010, as having been made on
December 31, 2009. Thus, taxpayers will have the ability,
if they so choose, to take a deduction in this tax season
on their 2009 returns.
Background
The Haiti Earthquake . On January 12, 2010, a 7.0 magnitude
earthquake struck the island nation of Haiti approximately
16 miles from the capital city of Port-au-Prince causing
widespread destruction and loss of life. The International
Federation of the Red Cross estimates that up to three
million people have been affected by the disaster, and
while numbers are still preliminary, the country's Interior
Minister has stated that the death toll could reach
200,000.
Prior legislation . This bill is similar to legislation
enacted following the Indian Ocean tsunami of December 26,
2004. Specifically, SB 50 (Campbell), Chapter 5, Statutes
of 2005, conformed to federal law by allowing individual
and corporate taxpayers that made qualified charitable
contributions in January 2005 to deduct those contributions
in either the 2004 or 2005 tax year.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
The Franchise Tax Board staff estimates that this bill will
result in a revenue loss of $80,000 in fiscal year 2009-10
and a gain of $80,000 in fiscal year 2010-11.
SUPPORT : (Verified 2/16/10)
California Society of Enrolled Agents
Spidell Publishing, Inc.
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ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Beall, Tom Berryhill,
Blakeslee, Block, Blumenfield, Bradford, Brownley,
Buchanan, Caballero, Charles Calderon, Chesbro, Conway,
Cook, Coto, De La Torre, Emmerson, Eng, Evans, Feuer,
Fletcher, Fong, Fuentes, Fuller, Furutani, Gaines,
Galgiani, Garrick, Gilmore, Hagman, Harkey, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller,
Monning, Nava, Nestande, Niello, John A. Perez,
Portantino, Ruskin, Silva, Smyth, Solorio, Audra
Strickland, Swanson, Torres, Torrico, Tran, Villines,
Yamada
NOES: Anderson, Bill Berryhill, Nielsen
NO VOTE RECORDED: Carter, Davis, De Leon, DeVore, Hall, V.
Manuel Perez, Salas, Saldana, Skinner, Torlakson, Bass
DLW:mw 2/16/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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