SB 1377: Personal income tax: deductions: adjusted gross income: consumer protection violations.
- Session Year: 2021-2022
- House: Senate
- Latest Version Date: 2022-06-21
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in computing adjusted gross income under that law.
This bill, for each taxable year beginning on or after January 1, 2022, would allow a deduction in computing adjusted gross income in an amount equal to attorneys fees and court costs included in gross income by a taxpayer during the taxable year in connection with any litigation involving a claim of a consumer protection violation, as defined.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
The bill also would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in computing adjusted gross income under that law.
This bill, for each taxable year beginning on or after January 1, 2022, would allow a deduction in computing adjusted gross income in an amount equal to attorneys fees and court costs paid by, or on behalf of, included in income by a taxpayer during the taxable year in connection with any action litigation involving a claim of a consumer protection violation, as defined.
This bill would take effect immediately as a tax levy.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in computing adjusted gross income under that law.
This bill, for each taxable year beginning on or after January 1, 2022, would allow a deduction in computing adjusted gross income in an amount equal to attorneys fees and court costs paid by, or on behalf of, a taxpayer during the taxable year in connection with any action involving a claim of a consumer protection violation, as defined.
This bill would take effect immediately as a tax levy.
(a)Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
(b)Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
(c)Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply.
(d)For each taxable year beginning on or after January 1, 2022, Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, is modified to provide that the deduction under Section 17208 shall be allowed in determining adjusted gross income.
SEC. 2.Section 17208 is added to the Revenue and Taxation Code, to read:17208.(a)For each taxable year beginning on or after January 1, 2022, there shall be allowed as a deduction an amount equal to attorneys fees and court costs included in gross income by a taxpayer during the taxable year in connection with any litigation involving a claim of a consumer protection violation.
(b)For purposes of this section, consumer protection violation means an act that is unlawful under any of the following:
(1)Section 987 of the General Military Law (10 U.S.C. Sec. 987).
(2)Sections 6, 8, or 9 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. Secs. 2605, 2607, and 2608).
(3)The Expedited Funds Availability Act (12 U.S.C. Sec. 4001).
(4)The Homeowners Protection Act of 1998 (12 U.S.C. Sec. 4901).
(5)The Truth in Lending Act (15 U.S.C. Sec. 1601).
(6)The Credit Repair Organizations Act (15 U.S.C. Sec. 1679).
(7)The Fair Credit Reporting Act (15 U.S.C. Sec. 1681).
(8)The Equal Credit Opportunity Act (15 U.S.C. Sec. 1691).
(9)The Fair Debt Collection Practices Act (15 U.S.C. Sec. 1692).
(10)The Electronic Fund Transfer Act (15 U.S.C. Sec. 1693).
(11)The Interstate Land Sales Full Disclosure Act (15 U.S.C. Sec. 1701).
(12)The Consumer Product Safety Act (15 U.S.C. Sec. 2051).
(13)The Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (15 U.S.C. Sec. 2301).
(14)The Servicemembers Civil Relief Act (50 U.S.C. Sec. 3901).
(15)Song-Beverly Consumer Warranty Act (Chapter 1 (commencing with Section 1790) of Title 1.7 of Part 4 of Division 3 of the Civil Code).
(16)Consumer Legal Remedies Act (Chapter 1 (commencing with Section 1750) of Title 1.5 of Part 4 of Division 3 of the Civil Code).
(17)Any provision of federal or state law prohibiting unfair or deceptive trade or credit practices.
(18)Any provision of federal, state, or local law, including any provision of the laws of another state that provide for the enforcement of consumer protection or regulate any aspect of consumer transactions, including claims for unfair, deceptive, or abusive trade or credit practices, or for other actions that cause harm to an individual by a seller or provider of property, services, securities or other investments, money, or credit for personal, family, or household use.
(c)Any deduction otherwise allowed under Section 17201 for attorneys fees and court costs shall be reduced by the amount of the deduction allowed under this section.
(d)For the purpose of complying with Section 41, with respect to the deductions allowed by this section, the Legislature finds and declares all of the following:
(1)The specific purpose of the deduction is to protect plaintiffs who prevail in litigation involving a claim of a consumer protection violation, and whose attorneys are awarded attorneys fees, from undue taxation or the threat of undue taxation of income they do not receive.
(2)To measure if the deduction achieves its intended purpose, the following performance indicators shall be used:
(A)The total number of returns that claimed the deduction allowed under this section.
(B)The total amount claimed as deductions allowed under this section.
(3)On or before August 1, 2026, and every two years thereafter, the Franchise Tax Board shall provide a report, in compliance with Section 9795 of the Government Code, on the two previous taxable years for which a full year of data is available, to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, and the Assembly Committee on Revenue and Taxation.
SEC. 3.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
(b)Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
(c)Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply.
(d)For each taxable year beginning on or after January 1, 2022, Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, is modified to provide that the deduction under Section 17208 shall be allowed in determining adjusted gross income.
SEC. 2.Section 17208 is added to the Revenue and Taxation Code, to read:17208.(a)For each taxable year beginning on or after January 1, 2022, there shall be allowed as a deduction an amount equal to attorneys fees and court costs paid by, or on behalf of, included in income by a taxpayer during the taxable year in connection with any action litigation involving a claim of a consumer protection violation.
(b)For purposes of this section, consumer protection violation means an act that is unlawful under any of the following:
(1)Section 987 of the General Military Law (10 U.S.C. 987).
(2)Sections 6, 8, or 9 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605, 2607, and 2608).
(3)The Expedited Funds Availability Act (12 U.S.C. 4001).
(4)The Homeowners Protection Act of 1998 (12 U.S.C. 4901).
(5)The Truth in Lending Act (15 U.S.C. 1601).
(6)The Credit Repair Organizations Act (15 U.S.C. 1679).
(7)The Fair Credit Reporting Act (15 U.S.C. 1681).
(8)The Equal Credit Opportunity Act (15 U.S.C. 1691).
(9)The Fair Debt Collection Practices Act (15 U.S.C. 1692).
(10)The Electronic Fund Transfer Act (15 U.S.C. 1693).
(11)The Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701).
(12)The Consumer Product Safety Act (15 U.S.C. 2051).
(13)The Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (15 U.S.C. 2301).
(14)The Servicemembers Civil Relief Act (50 U.S.C. 3901).
(15)Song-Beverly Consumer Warranty Act (Chapter 1 (commencing with Section 1790) of Title 1.7 of Part 4 of Division 3 of the Civil Code).
(16)Consumer Legal Remedies Act (Chapter 1 (commencing with Section 1750) of Title 1.5 of Part 4 of Division 3 of the Civil Code).
(17)Any provision of federal or state law prohibiting unfair or deceptive trade or credit practices.
(18)Any provision of federal, state, or local law, including any provision of the laws of another state that provide for the enforcement of consumer protection or regulate any aspect of consumer transactions, including claims for unfair, deceptive, or abusive trade or credit practices, or for other actions that cause harm to an individual by a seller or provider of property, services, securities or other investments, money, or credit for personal, family, or household use.
(c)Any deduction otherwise allowed under Section 17201 for attorneys fees and court costs shall be reduced by the amount of the deduction allowed under this section.
SEC. 3.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
(b)Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
(c)Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply.
(d)For each taxable year beginning on or after January 1, 2022, Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, is modified to provide that the deduction under Section 17208 shall be allowed in determining adjusted gross income.
SEC. 2.Section 17208 is added to the Revenue and Taxation Code, to read:17208.(a)For each taxable year beginning on or after January 1, 2022, there shall be allowed as a deduction an amount equal to attorneys fees and court costs paid by, or on behalf of, a taxpayer during the taxable year in connection with any action involving a claim of a consumer protection violation.
(b)For purposes of this section, consumer protection violation means an act that is unlawful under any of the following:
(1)Section 987 of the General Military Law (10 U.S.C. 987).
(2)Sections 6, 8, or 9 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605, 2607, and 2608).
(3)The Expedited Funds Availability Act (12 U.S.C. 4001).
(4)The Homeowners Protection Act of 1998 (12 U.S.C. 4901).
(5)The Truth in Lending Act (15 U.S.C. 1601).
(6)The Credit Repair Organizations Act (15 U.S.C. 1679).
(7)The Fair Credit Reporting Act (15 U.S.C. 1681).
(8)The Equal Credit Opportunity Act (15 U.S.C. 1691).
(9)The Fair Debt Collection Practices Act (15 U.S.C. 1692).
(10)The Electronic Fund Transfer Act (15 U.S.C. 1693).
(11)The Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701).
(12)The Consumer Product Safety Act (15 U.S.C. 2051).
(13)The Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (15 U.S.C. 2301).
(14)The Servicemembers Civil Relief Act (50 U.S.C. 3901).
(15)Song-Beverly Consumer Warranty Act (Chapter 1 (commencing with Section 1790) of Title 1.7 of Part 4 of Division 3 of the Civil Code).
(16)Consumer Legal Remedies Act (Chapter 1 (commencing with Section 1750) of Title 1.5 of Part 4 of Division 3 of the Civil Code).
(17)Any provision of federal or state law prohibiting unfair or deceptive trade or credit practices.
(18)Any provision of federal, state, or local law, including any provision of the laws of another state that provide for the enforcement of consumer protection or regulate any aspect of consumer transactions, including claims for unfair, deceptive, or abusive trade or credit practices, or for other actions that cause harm to an individual by a seller or provider of property, services, securities or other investments, money, or credit for personal, family, or household use.
SEC. 3.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
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Date
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Status
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| Aug 11, 2022 | August 11 hearing: Held in committee and under submission. |
| Aug 3, 2022 | August 3 set for first hearing. Placed on suspense file. |
| Jun 30, 2022 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 1.) (June 30). Re-referred to Com. on APPR. |
| Jun 21, 2022 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX. |
| Jun 20, 2022 | June 20 hearing: Heard for testimony only. |
| Jun 2, 2022 | Referred to Com. on REV. & TAX. |
| May 26, 2022 | In Assembly. Read first time. Held at Desk. |
| May 25, 2022 | Read third time. Passed. (Ayes 28. Noes 9. Page 3914.) Ordered to the Assembly. |
| May 19, 2022 | From committee: Do pass. (Ayes 5. Noes 2. Page 3794.) (May 19). |
| May 13, 2022 | Set for hearing May 19. |
| May 2, 2022 | May 2 hearing: Placed on APPR suspense file. |
| Apr 22, 2022 | Set for hearing May 2. |
| Apr 20, 2022 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 4. Noes 1. Page 3460.) (April 20). Re-referred to Com. on APPR. |
| Apr 18, 2022 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on GOV. & F. |
| Apr 14, 2022 | Set for hearing April 20. |
| Apr 13, 2022 | April 21 hearing postponed by committee. |
| Apr 5, 2022 | Set for hearing April 21. |
| Mar 17, 2022 | Referred to Com. on GOV. & F. |
| Feb 22, 2022 | From printer. |
| Feb 18, 2022 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
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Date
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Description
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Location
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Votes
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| May 25, 2022 | Senate 3rd Reading SB1377 Newman et al. | Senate Floor |
Passed |
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