BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2323 (Gorell) - Personal Income Tax: Gross Income Exclusion:
Olympic and Paralympic Games
Amended: June 26, 2014 Policy Vote: G&F 7-0
Urgency: No Mandate: No
Hearing Date: August 11, 2014
Consultant: Robert Ingenito
This bill may meet the criteria for referral to the Suspense
File.
Bill Summary: AB 2323 would exclude from income the value of any
prize or award won in the Olympic Games or Paralympic Games. The
exclusion would remain in effect through taxable year 2021.
Fiscal Impact: Based on historical athlete performance, the
Franchise Tax Board (FTB) estimates that the bill would result
in revenue losses (General Fund) of $8,000 in 2014-15, $50,000
in 2015-16, and $30,000 in 2016-17. The bill would not
significantly impact FTB's administrative costs.
Background: The United States Olympic Committee (USOC) pays out
a $25,000 bonus per gold medal, $15,000 for silver and $10,000
for bronze (and for the Paralympics, $5,000, $3,500 and $2,500,
respectively). The money does not come from the United States
government; instead, the USOC gets it money from the sale of
broadcast rights, licensing and trademark income, and corporate
sponsorships. As a point of comparison, Kazakhstan pays its
athletes the equivalent of $250,000 per gold medal. Under
current law, the Olympic-related bonuses are considered taxable
income, which includes all gifts and prizes unless specifically
excluded (such as employee achievement awards, and any gift or
prize donated to charity). Current state law excludes from
income some items that are includible as income in federal tax,
such as lottery winnings, unemployment insurance, and a portion
of social security benefits.
Proposed Law: This bill would exclude from gross income the
value of any award given by or any prize money received from the
USOC on account of the Olympic or Paralympic Games.
AB 2323 (Gorell)
Page 1
Related Legislation: AB 1786 (Mansoor, 2011) would have excluded
from gross income any prize or award won by an individual in
athletic competition at the Olympics Games. The bill was held in
the Assembly Revenue and Taxation Committee.
Staff Comments: The revenue loss from this bill depends entirely
on the number of Californians that will medal at each Olympic
and Paralympic Games, which is unknown. The 2012 Summer Olympic
Games featured 26 sports and 302 events. The 2016 Summer Olympic
Games will include 28 sports and a total of 306 events.
Likewise, the number of Winter Olympic events in 2018 could rise
from the 98 that were included in the 2014 Games.