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Bills

AB 219: Personal income tax: credit: back-to-school items.

  • Session Year: 2021-2022
  • House: Assembly
  • Latest Version Date: 2021-02-23
Version:
Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, and provides various exemptions from the taxes imposed by those laws. This bill, on and after January 1, 2022, would exempt from those taxes the gross receipts from the sale of, and the storage, use, or other consumption of, back-to-school items that are purchased during the ____ weekend in ____, beginning at 12:01 a.m. on Saturday and ending at 11:59 p.m. on Sunday, by parents with schoolchildren, students attending a postsecondary institution, or educators.Existing law requires a bill that would authorize a new tax exemption under the Sales and Use Tax Law to identify specific goals, purposes, and objectives that the tax expemption will achieve, and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives.This bill would state the intent of the Legislature to enact legislation to comply with those tax exemption requirements.The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.This bill would take effect immediately as a tax levy.

The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law requires any bill authorizing a new tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.

This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2022, and before January 1, 2027, in an amount equal to the amount of sales tax collected from a qualified taxpayer during the first week of August of the taxable year for purchases of back-to-school items, as defined, not to exceed $2,500 per taxable year per household. The bill would define qualified taxpayer as a parent with a schoolchild, a student attending a postsecondary institution, or an educator. The bill would require a qualified taxpayer to have a household income at the time of filing that is at or below the federal poverty threshold, except as otherwise specified. The bill would require the Franchise Tax Board to submit a report by January 1, 2026, to the Legislature on the amount of credits used by qualified taxpayers, and would provide findings and declarations relating to the goals of this credit.

Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account, including any amount to be paid as an earned income tax credit in excess of any tax liabilities.

This bill would require the amount of the credit exceeding the taxpayers liability to be credited against other amounts due, if any, and would require the balance to be paid from the Tax Relief and Refund Account and refunded to the taxpayer.

By authorizing new payments from that account for additional amounts in excess of personal income tax liabilities, this bill would make an appropriation.

Authors shown for version:
Amended Assembly (2/23/2021)

Bill Author

Avatar: Devon Mathis
Devon Mathis
Avatar: Carlos Villapudua
Carlos Villapudua

Bill Co-Author(s):

Avatar: Steven Choi
Steven Choi
Avatar: Mike Gipson
Mike Gipson
Avatar: Blanca Rubio
Blanca Rubio
Avatar: Rudy Salas
Rudy Salas