Signed by Governor Gavin Newsom

Vote Smart's Synopsis:

Vote to concur with House amendments and pass a bill that amends certain state tax codes in California.

Highlights:

• Requires applications filed with the Department of Motor Vehicles (DMV) to be deemed a filed return with the California Department of Tax and Fee Administration (CDTFA) (Sec. 2).

• Authorizes the CDTFA to exempt a licensed car dealer from the requirement to pay applicable taxes to the DMV if the dealer sold at least 1,000 vehicles in the current or preceding year (Sec. 2).

• Expands the application of the Marketplace Facilitator Act to include any fee imposed under the Electronic Waste Recycling Act of 2003 (Sec. 1).

• Specifies that the County of Sonoma, any city within that county, and the Sonoma County Transportation Authority are each separate entities in determining their authority to impose transactions and use tax (Sec. 3).

• Exempts the following forms of payment from gross income totals for tax purposes in each taxable year prior to January 1, 2030 (Sec. 12-15).

• Retirement pay from the federal government for services performed in the uniformed services;

• Annuity payments;

• Settlements received in connection with a wildfire in the state; and

• Compensation for costs and losses related to the Chiquita Canyon elevated temperature landfill event.

• Prohibits any payment related to the Chiquita Canyon elevated temperature landfill event from being considered income or resources when determining eligibility for or amounts for any means-tested or guaranteed income program (Sec. 26).

• Authorizes the use of rehabilitation tax credits for historic structures that are not allocated in a calendar year to be made available to taxpayers with qualified rehabilitation expenditures of $1 million or more (Sec. 9).

• Increases the maximum aggregate amount of motion picture tax credits that may be allocated for a fiscal year from $330 million to $750 million (Sec. 10).

• Extends the tax credit for taxpayers who are a partner, shareholder, or member of an “S” corporation that elects to pay an elective tax based on its net income through the 2026 calendar year (Sec. 17).

• Extends the elective tax for “S” corporations based on their net income through taxable years ending January 1, 2031 (Sec. 17).

• Amends the definition of qualified business activities for the purpose of apportionment under the Corporation Tax Law to remove banking and financial business activities (Sec. 22).

• Increases the cost intended by the Legislature to be incurred by the Franchise Tax Board to administer fines referred by a court, county, the state, or the State Bar from 15% of the amount it collects to 20% (Sec. 16).

• Expands the excise tax on the retail sale of firearms, firearm precursor parts, or ammunition to apply to dealers, manufacturers, or vendors who are based out-of-state but engage in business in California (Sec. 24-25).

Full Bill Text

Vote Smart's Synopsis:

Vote to amend and pass a bill that amends certain state tax codes in California.

Highlights:

• Requires applications filed with the Department of Motor Vehicles (DMV) to be deemed a filed return with the California Department of Tax and Fee Administration (CDTFA) (Sec. 2).

• Authorizes the CDTFA to exempt a licensed car dealer from the requirement to pay applicable taxes to the DMV if the dealer sold at least 1,000 vehicles in the current or preceding year (Sec. 2).

• Expands the application of the Marketplace Facilitator Act to include any fee imposed under the Electronic Waste Recycling Act of 2003 (Sec. 1).

• Specifies that the County of Sonoma, any city within that county, and the Sonoma County Transportation Authority are each separate entities in determining their authority to impose transactions and use tax (Sec. 3).

• Exempts the following forms of payment from gross income totals for tax purposes in each taxable year prior to January 1, 2030 (Sec. 12-15).

• Retirement pay from the federal government for services performed in the uniformed services;

• Annuity payments;

• Settlements received in connection with a wildfire in the state; and

• Compensation for costs and losses related to the Chiquita Canyon elevated temperature landfill event.

• Prohibits any payment related to the Chiquita Canyon elevated temperature landfill event from being considered income or resources when determining eligibility for or amounts for any means-tested or guaranteed income program (Sec. 26).

• Authorizes the use of rehabilitation tax credits for historic structures that are not allocated in a calendar year to be made available to taxpayers with qualified rehabilitation expenditures of $1 million or more (Sec. 9).

• Increases the maximum aggregate amount of motion picture tax credits that may be allocated for a fiscal year from $330 million to $750 million (Sec. 10).

• Extends the tax credit for taxpayers who are a partner, shareholder, or member of an “S” corporation that elects to pay an elective tax based on its net income through the 2026 calendar year (Sec. 17).

• Extends the elective tax for “S” corporations based on their net income through taxable years ending January 1, 2031 (Sec. 17).

• Amends the definition of qualified business activities for the purpose of apportionment under the Corporation Tax Law to remove banking and financial business activities (Sec. 22).

• Increases the cost intended by the Legislature to be incurred by the Franchise Tax Board to administer fines referred by a court, county, the state, or the State Bar from 15% of the amount it collects to 20% (Sec. 16).

• Expands the excise tax on the retail sale of firearms, firearm precursor parts, or ammunition to apply to dealers, manufacturers, or vendors who are based out-of-state but engage in business in California (Sec. 24-25).

Full Bill Text