The Personal Income Tax Law, in modified conformity with federal law, generally defines gross income as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income for purposes of computing tax liability.

Existing law generally provides for the reimbursement of victims and derivative victims of specified types of crimes by the California Victim Compensation Board from the Restitution Fund, a continuously appropriated fund, for specified losses suffered as a result of those crimes.

This bill would exclude from gross income any payment received from the California Victim Compensation Board pursuant to specified law.

This bill would take effect immediately as a tax levy.

The Personal Income Tax Law, in modified conformity with federal law, generally defines gross income as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income for purposes of computing tax liability.

Existing law generally provides for the reimbursement of victims and derivative victims of specified types of crimes by the California Victim Compensation Board from the Restitution Fund, a continuously appropriated fund, for specified losses suffered as a result of those crimes.

This bill would exclude from gross income any payment received from the California Victim Compensation Board pursuant to specified law.

This bill would take effect immediately as a tax levy.

The Personal Income Tax Law, in modified conformity with federal law, generally defines gross income as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income for purposes of computing tax liability.

Existing law generally provides for the reimbursement of victims and derivative victims of specified types of crimes by the California Victim Compensation Board from the Restitution Fund, a continuously appropriated fund, for specified losses suffered as a result of those crimes.

This bill would provide that payments made by the board pursuant to specified law are deemed to be for the promotion of the general welfare and are not included in gross income. exclude from gross income any payment received from the California Victim Compensation Board pursuant to specified law.

This bill would take effect immediately as a tax levy.

The Personal Income Tax Law, in modified conformity with federal law, generally defines gross income as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income for purposes of computing tax liability.

Existing law generally provides for the reimbursement of victims and derivative victims of specified types of crimes by the California Victim Compensation Board from the Restitution Fund, a continuously appropriated fund, for specified losses suffered as a result of those crimes.

This bill would state the intent of the Legislature to enact subsequent legislation relating to the exclusion of compensation received from the California Victim Compensation Board from the definition of gross income for the purpose of taxation. provide that payments made by the board pursuant to specified law are deemed to be for the promotion of the general welfare and are not included in gross income.

The Personal Income Tax Law, in modified conformity with federal law, generally defines gross income as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income for purposes of computing tax liability.

Existing law generally provides for the reimbursement of victims and derivative victims of specified types of crimes by the California Victim Compensation Board from the Restitution Fund, a continuously appropriated fund, for specified losses suffered as a result of those crimes.

This bill would state the intent of the Legislature to enact subsequent legislation relating to the exclusion of compensation received from the California Victim Compensation Board from the definition of gross income for the purpose of taxation.

 CONSENT  

Bill No: AB 2979

Author: Mike Fong (D), et al.

Amended: 4/17/24 in Assembly

Vote: 21- Urgency

SENATE REVENUE AND TAXATION COMMITTEE: 6-0, 6/12/24

AYES: Glazer, Dahle, Bradford, Dodd, Padilla, Skinner

NO VOTE RECORDED: Ashby

ASSEMBLY FLOOR: 71-0, 5/21/24 (Consent) - See last page for vote

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Income taxation: exclusion: victim compensation

SOURCE: Author

DIGEST:

This bill excludes from state income taxation any payment received from the California Victim Compensation Board under its direct victim of Good Samaritan compensation programs.

ANALYSIS:

Existing law:

1. Allows various income tax credits, deductions, exemptions, and exclusions.
2. Includes, in conformity with federal law, as gross income all income from any source, including compensation for services, business income, gains from property, interest, dividends, rents, and royalties, unless specifically excluded.
3. Conforms as of January 1, 2015, to Internal Revenue Code (IRC) Section 104, which excludes from gross income certain amounts received as compensation for injuries or sickness, including:
   1. Amounts received under workmen’s compensation acts;
   2. Amounts of any damages received (whether by suit or agreement) on account of personal physical injuries or physical sickness;
   3. Amounts received through accident or health insurance for personal injuries or sickness;
   4. Amounts received as a pension, annuity, or similar allow for personal injuries or illness resulting from active service in the armed forces, or in the Coast and Geodetic Survey or Public Health Service, or as a disability annuity payment under Section 808 of the Foreign Service act of 1980; and
   5. Amounts received by an individual as disability income from injuries caused by terroristic or military action; and amounts received under federal or state laws for compensation surviving dependents of public safety officers.
4. Authorizes the California Victims Compensation Board (CalVCB) to pay compensation to specified crime victims.
5. Requires a victim to be a California resident at the time of the crime or a non-resident victimized in California, where the crime generally involved physical injury, emotional injury caused by the threat of physical injury or death, to be eligible for compensation.
6. Authorizes CalVCB to provide compensation to “Good Samaritans,” defined as a private citizens who take direct action to prevent the commission of a crime against the person or property of the victim, or rescues a person in immediate danger of injury or death as a result of fire, drowning, or another catastrophe.

This bill:

1. Excludes from state income taxation any payment received from the CalVCB under its direct victim or Good Samaritan compensation programs.
2. Makes legislative findings and declarations to comply with Section 41 of the Revenue and Taxation Code.

Background

Although IRC Section 61’s broad reach applies to most things that can reasonably be considered income, the Internal Revenue Service (IRS) has consistently ruled that payments to individuals by governmental units under legislatively provided social benefit programs for promotion of the general welfare, that do not represent compensation for services, are excludable from the recipient's gross income. Known as the “general welfare exclusion,” taxpayers generally do not include in gross income for tax purposes any governmental payments received from a welfare fund based upon the recipients' identified need and when those payments are not made as compensation for services.

However, the general welfare exclusion is not based on any specific statutory or regulatory authority, so its application can often be unclear. In Revenue Ruling 74-74, 1974-1, C.B. 18, the IRS applied the general welfare doctrine to exclude from gross income payments made by the New York Crime Victims Compensation Board to victims who suffered personal physical injury as a direct result of a crime and surviving spouse or dependents in cases where the victim died as a result of the crime.

According to the author, individuals who received victim compensation from CalVCB as a result of the shooting in the City of Monterey Park on January 21, 2023, are concerned the compensation is taxable for state income tax purposes, and want to clarify that any payments are excluded from state income tax. However, California law conforms to Sections 61 and 104 of the IRC as of January 1, 2015. As a result, any compensation from CalVCB that is excluded for federal purposes is also excluded for state purposes.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 6/25/24)

Aapis for Civic Empowerment
Asian Americans Advancing Justice-Southern California
California District Attorneys Association
City of Monterey Park
Ella Baker Center for Human Right
Prosecutors Alliance of California, a Project of Tides Advocacy

OPPOSITION: (Verified 6/25/24)

None received

ARGUMENTS IN SUPPORT: According to the author, “Last year, a mass shooting in my District took the lives of 11 community members and injured nine others. Tragically, Monterey Park was not the only site of a mass shooting that occurred in California. While helping survivors apply for funds from the California Victim Compensation Board to help pay for funeral expenses, medical or mental health services, and other needs, victims expressed confusion as to whether funds received would be subject to state taxes. The federal IRS has determined that victim compensation funds are not subject to federal income taxes. This bill simply clarifies that victim compensation funds are also not subject to state taxes. This will help victims and survivors focus on healing.”

ASSEMBLY FLOOR: 71-0, 5/21/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Papan, Luz Rivas

Prepared by: Colin Grinnell / REV. & TAX. / (916) 651-4117

6/25/24 13:11:40

**** END ****

SENATE COMMITTEE ON REVENUE AND TAXATION

Senator Steven Glazer, Chair

2023 - 2024 Regular

Income taxation: exclusion: victim compensation

Excludes from state income taxation any payment received from the California Victim Compensation Board under its direct victim of Good Samaritan compensation programs.

Background

Income. Section 61(a) of the Internal Revenue Code (IRC) provides that gross income means all income from whatever source derived, unless otherwise excepted. Although Section 61’s broad reach applies to most things that can reasonably be considered income, the Internal Revenue Service (IRS) has consistently ruled that payments to individuals by governmental units under legislatively provided social benefit programs for promotion of the general welfare, that do not represent compensation for services, are excludable from the recipient's gross income. Known as the “general welfare exclusion,” taxpayers generally do not include in gross income for tax purposes any governmental payments received from a welfare fund based upon the recipients' identified need and when those payments are not made as compensation for services.

However, the general welfare exclusion is not based on any specific statutory or regulatory authority, so its application can often be unclear. In Revenue Ruling 74-74, 1974-1, C.B. 18, the IRS applied the general welfare doctrine to exclude from gross income payments made by the New York Crime Victims Compensation Board to victims who suffered personal physical injury as a direct result of a crime and surviving spouse or dependents in cases where the victim died as a result of the crime.

Additionally, IRC Section 104 excludes from gross income certain amounts received as compensation for injuries or sickness. This exclusion applies to:

• Amounts received under workmen’s compensation acts;
• Amounts of any damages received (whether by suit or agreement) on account of personal physical injuries or physical sickness;
• Amounts received through accident or health insurance for personal injuries or sickness;
• Amounts received as a pension, annuity, or similar allow for personal injuries or illness resulting from active service in the armed forces, or in the Coast and Geodetic Survey or Public Health Service, or as a disability annuity payment under Section 808 of the Foreign Service act of 1980;
• Amounts received by an individual as disability income from injuries caused by terroristic or military action; and amounts received under federal or state laws for compensation surviving dependents of public safety officers.

California conforms to the IRC, including Sections 61 and 104, as of January 1, 2015 (AB 154, Ting). California also has explicit state income tax exclusions for restitution payments to victims and survivors of World War II, settlement payments to victims and survivors of the Armenian Genocide, and settlement payments for victims and survivors of specified wildfires.

California Victims’ Compensation Board (CalVCB). Existing law authorizes the CalVCB to pay compensation to specified crime victims. To be eligible for compensation, a victim must be a California resident at the time of the crime or a non-resident victimized in California. The crime, in turn, must generally involve physical injury, emotional injury caused by the threat of physical injury, or death. In addition, the victim must, as a general rule, cooperate with police and court officials to arrest and prosecute the offender, cooperate with CalVCB staff, and not have been involved in the events leading to the crime.

Eligible crime victims generally fall into one of two categories. The first category is comprised of “direct victims.” A direct victim is the individual who is the victim of the qualifying crime. Sometimes, however, a witness to a crime may also be considered a direct victim. The second category includes "derivative victims,” who are individuals with a relationship to a direct victim who have expenses or need services because of that person's injury or death.

If an individual is eligible for compensation, the CalVCB can pay for specified recovery expenses, provided the expenses are not covered by another source. Eligible expenses include medical and dental treatment, mental health counseling, funeral and burial expenses, and income loss for up to five years if the crime disabled the victim. Total compensation, however, is limited to $70,000.

In addition to the CalVCB compensation program, existing law also authorizes the compensation to “Good Samaritans.” Specifically, this program applies when a private citizen takes direct action to prevent the commission of a crime against the person or property of the victim, or rescues a person in immediate danger of injury or death as a result of fire, drowning, or another catastrophe. In recognition of the public purpose served, the state may compensate such citizens, their surviving spouses, or dependents for any injury, death, or damage sustained by the Good Samaritan, as specified in Government Code Section 13970.

According to the author, individuals who received victim compensation from CalVCB as a result of the shooting in the City of Monterey Park on January 21, 2023, are concerned the compensation is taxable for state income tax purposes, and wants to clarify that any payments are excluded from state income tax.

Proposed Law

Assembly Bill 2979 excludes from state income taxation any payment received from the CalVCB under its direct victim or Good Samaritan compensation programs. The measure also makes legislative findings and declarations to comply with Section 41 of the Revenue and Taxation Code.

State Revenue Impact

According to the Franchise Tax Board (FTB), “if it is determined that the California Victim Compensation Board payments would be exempt under federal law, given our conformity with the IRC [S]ection 61, those payments would also be exempt under state law. With the assumption that these payments are exempt under current state law, there would be no revenue impact.”

Comments

1. Purpose of the bill. According to the author, “Last year, a mass shooting in my District took the lives of 11 community members and injured nine others. Tragically, Monterey Park was not the only site of a mass shooting that occurred in California. While helping survivors apply for funds from the California Victim Compensation Board to help pay for funeral expenses, medical or mental health services, and other needs, victims expressed confusion as to whether funds received would be subject to state taxes. The federal IRS has determined that victim compensation funds are not subject to federal income taxes. This bill simply clarifies that victim compensation funds are also not subject to state taxes. This will help victims and survivors focus on healing.”

2. Necessary? As noted above, California conforms to Sections 61 and 104 of the IRC as of January 1, 2015. As a result, any compensation from CalVCB that is excluded for federal purposes is also excluded for state purposes.

3. Section 41. Section 41 of the Revenue and Taxation Code requires any bill enacting a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve and detailed performance indicators, along with data collection and reporting requirements (SB 1335, Leno, 2014). To satisfy these requirements AB 2979 sets as its goal, purpose, and objective to provide relief as preventing further hardship to victims of crime who receive payments from the CalVCB. The bill then references Revenue Ruling 74-74 1974-1 CB 18, and states its intent is to codify payments from the CalVCB as excluded from gross income for state income tax purposes.

Assembly Actions

Assembly Revenue & Taxation Committee: 7-0
Assembly Appropriations Committee: 15-0
Assembly Floor: 71-0

Support and Opposition

(6/7/24)

Support: Aapis for Civic Empowerment
Asian Americans Advancing Justice-southern California
California District Attorneys Association
City of Monterey Park
Ella Baker Center for Human Right
Prosecutors Alliance of California, a Project of Tides Advocacy

Opposition: None received.

-- END --

Date of Hearing: May 15, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2979

Author:(Mike Fong) – As Amended Ver:April 17, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill codifies that certain payments received from the California Victim Compensation Board (VCB) are excluded from gross income under the Personal Income Tax (PIT) Law.

Specifically, this bill:

1. Makes findings and declarations regarding a specified Internal Revenue Service (IRS) ruling that concluded payments from New York’s victim compensation board are not included in gross income, as defined in Internal Revenue Code (IRC) Section 61, for federal income tax purposes. As California PIT Law conforms to the IRC Section 61 definition of gross income, payments from the VCB are excluded from gross income for state income tax purposes.
2. Specifies the gross income exclusion applies to the following VCB payments: (a) a payment to a victim or derivative victim of a crime and (b) a payment to a private citizen who engages in action benefiting the public.

FISCAL EFFECT:

1. No General Fund revenue impact, as the Franchise Tax Board (FTB) notes a VCB payment excluded under federal law would already be excluded under state law. This bill does not expand or constrict the scope of excluded payments or modify how FTB currently administers the exclusion.
2. Potential minor cost savings to FTB, to the extent this bill results in fewer taxpayer inquiries regarding the application of federal and state law to certain VCB payments.

COMMENTS:

1. Purpose. According to the author:

Last year, a mass shooting in my District took the lives of 11 community members and injured 9 others. Tragically, Monterey Park was not the only site of a mass shooting that occurred in California. While helping survivors apply for funds from the [VCB] to help pay for funeral expenses, medical or mental health services, and other needs, victims expressed confusion as to whether funds received would be subject to state taxes.

This bill is supported by the City of Monterey Park, the California District Attorneys Association, and civil rights groups.

1. VCB Payments. Existing law authorizes the VCB to pay compensation, limited to $70,000 per person, to specified crime victims. The crime must generally involve physical injury, emotional injury caused by the threat of physical injury, or death, and an eligible victim must generally cooperate with law enforcement to arrest and prosecute the offender and not have been involved in the events leading to the crime. Payments may be made to a direct victim or a derivative victim, which is an individual with a relationship to the direct victim, with the derivative victim having their own expenses or service needs because of the direct victim’s injury or death. Existing law also allows for VCB payments to a “Good Samaritan,” when a private citizen takes direct action to prevent the commission of a crime against a person or property, or rescues a person in immediate danger of injury or death due to fire, drowning, or other catastrophe. Such payments may be made to compensate a Good Samaritan, their surviving spouses, or dependents for injury, death, or damage sustained during the act. This bill explicitly states that such VCB payments are excluded from gross income under PIT Law, in conformity with federal law.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 29, 2024

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Jacqui Irwin, Chair

ABPCA Bill Id:
AB 2979 (

Author:Mike Fong) – As Amended Ver:April 17, 2024

Majority vote. Tax levy. Fiscal committee.

SUBJECT: Income taxation: exclusion: victim compensation

SUMMARY: Provides a gross income exclusion, under the Personal Income Tax Law, for any payment received from the California Victim Compensation Board (CalVCB) pursuant to Government Code Sections 13955 and 13970. Specifically, this bill:

1. Provides the following findings and declarations:
   1. This bill is necessary to prevent further hardship to victims of crime who receive payments from the CalVCB;
   2. The Internal Revenue Service (IRS) issued Revenue Ruling 74-74, 1974-1 C.B. 18, concluding that payments from the Crime Victims Compensation Board of the State of New York to crime victims are not included in gross income, as defined in Internal Revenue Code (IRC) Section 61, of the recipients for federal income tax purposes because they are disbursed from a general welfare fund in the interest of the general public; and,
   3. As California conforms to the definition of gross income under IRC Section 61, it is the intent of the Legislature to codify that payments from the CalVCB are excluded from gross income for state income tax purposes.
2. Provides a gross income exclusion for any payment received from the CalVCB pursuant to the following statutes:
   1. Government Code Section 13955, which authorizes the payment of compensation to victims and derivative victims of crimes, subject to certain conditions; and,
   2. Government Code Section 13970, which provides for the payment of private citizens who engage in action benefiting the public.
3. Takes immediate effect as a tax levy.

EXISTING LAW:

1. Defines "gross income", in modified conformity with federal law, as income from whatever source derived, except as specifically excluded. (Revenue and Taxation Code (R&TC) Section 17071.)
2. Provides various exclusions from gross income for purposes of computing tax liability. (R&TC Section 17131 et seq.)
3. Provides for the reimbursement of victims and derivative victims of specified types of crimes by the CalVCB from the Restitution Fund, a continuously appropriated fund, for specified losses suffered as a result of those crimes. (Government Code Section 13900 et seq.)

FISCAL EFFECT: The Franchise Tax Board notes the following in its staff analysis of this bill:

If it is determined that the California Victim Compensation Board payments would be exempt under federal law, given our conformity with the IRC [S]ection 61, those payments would also be exempt under state law. With the assumption that these payments are exempt under current state law, there would be no revenue impact.

COMMENTS:

1. The author has provided the following statement in support of this bill:

Last year, a mass shooting in my District took the lives of 11 community members and injured nine others. Tragically, Monterey Park was not the only site of a mass shooting that occurred in California. While helping survivors apply for funds from the California Victim Compensation Board to help pay for funeral expenses, medical or mental health services, and other needs, victims expressed confusion as to whether funds received would be subject to state taxes. The federal IRS has determined that victim compensation funds are not subject to federal income taxes. This bill simply clarifies that victim compensation funds are also not subject to state taxes. This will help victims and survivors focus on healing.

1. This bill is supported by the City of Monterey Park, which notes the following:

Last year, multiple mass shootings took place across the state, including in Goshen, Monterey Park, Half Moon Bay, and Trabuco Canyon. Survivors and their families often have more than physical and psychological impacts, they may also face financial burdens. The California Victim Compensation Fund helps provide some financial relief to crime victims and their families. These funds can be used to pay medical expenses, mental health services, relocation expenses, funeral and burial expenses, income loss, and other needs.

While the Internal Revenue Service does not require victim compensation payments to be reported for federal tax purposes, state law is not clear as to whether these payments are subject to state taxes. The purpose of these funds is to help provide financial assistance to survivors and their families following a tragic and traumatic incident. AB 2979 will remove any ambiguity so that survivors and their families can focus on healing.

The tragic events that occurred in the City of Monterey Park on January 21, 2023, continue to weigh heavily on our hearts, and we are committed to taking meaningful action to, not only prevent such senseless acts of violence from occurring in our city and across the state, but provide support to the victims in any [way] we possibly can.

1. Committee Staff Comments:
   1. CalVCB: Existing law authorizes the CalVCB to pay compensation to specified crime victims. To be eligible for compensation, a victim must be a California resident at the time of the crime or a non-resident victimized in California. The crime, in turn, must generally involve physical injury, emotional injury caused by the threat of physical injury, or death. In addition, the victim must, as a general rule, cooperate with police and court officials to arrest and prosecute the offender, cooperate with CalVCB staff, and not have been involved in the events leading to the crime.

Eligible crime victims generally fall into one of two categories. The first category is comprised of "direct victims". A direct victim is the individual who is the victim of the qualifying crime. Sometimes, however, a witness to a crime may also be considered a direct victim. The second category includes "derivative victims". These are individuals with a relationship to a direct victim who have expenses or need services because of that person's injury or death.

If an individual is eligible for compensation, the CalVCB can pay for specified recovery expenses, provided the expenses are not covered by another source. Eligible expenses include medical and dental treatment, mental health counseling, funeral and burial expenses, and income loss for up to five years if the crime disabled the victim. Total compensation, however, is limited to $70,000.

• 1. Compensation for Good Samaritans: In addition to the victim compensation program outlined above, existing law also authorizes the compensation of so-called "Good Samaritans". Specifically, this program applies when a private citizen takes direct action to prevent the commission of a crime against the person or property of other, or rescues a person in immediate danger of injury or death as a result of fire, drowning, or other catastrophe. In recognition of the public purpose served, the state may compensate such citizens, their surviving spouses, or dependents for any injury, death, or damage sustained by the Good Samaritan, as specified in Government Code Section 13970.
  2. General welfare exclusion: Existing law provides that gross income includes all income, from whatever source derived, including compensation for services, business income, gains from property, interest, dividends, rents, and royalties, unless specifically excluded. Examples of items specifically excluded include amounts received as a gift or inheritance, certain compensation for injuries or sickness, and foster care payments.

While not codified in federal law, the IRS has also applied the "general welfare doctrine" to provide that gross income does not include certain payments made to or on behalf of individuals by governmental units under governmentally provided social benefit programs based on need. To qualify for the exclusion, the payments must:

• • 1. Be made pursuant to a governmental program;
    2. Be for the promotion of the general welfare generally on the basis of need^[1]; and,
    3. Not represent compensation for services.

In Revenue Ruling 74-74, the IRS applied the general welfare doctrine to exclude from gross income payments made by the New York Crime Victims Compensation Board to victims who suffered personal physical injury as a direct result of a crime or to their surviving spouses or dependents.

• 1. What would this bill do? California generally conforms to both the federal definition of gross income and to the application of the general welfare doctrine. Nevertheless, supporters of this bill contend that even though the IRS does not require victim compensation payments to be reported for federal tax purposes, ambiguity exists regarding whether state law treats these payments as exempt from gross income. As such, this bill is being offered to provide clarity to crime victims and Good Samaritans that they will not incur a state tax liability in connection with payments issued by the CalVCB. To this end, the author's office notes:

Some survivors have reported receiving unclear or conflicting information about whether their payments are subject to state taxes. Survivors of violent crimes should not have to spend their energy navigating unclear laws to determine whether compensation payments from the state will be subject to state taxes. Instead, the state should make it as easy as possible for survivors to receive these payments.

REGISTERED SUPPORT / OPPOSITION:

Support

AAPIs for Civic Empowerment

Asian Americans Advancing Justice Southern California

California District Attorneys Association

City of Monterey Park

Opposition

None on file

Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098

1. The IRS has ruled that the "need" criterion is met not only when a recipient's compensation is based on their financial condition, "but also when specific circumstances convey that a recipient has a situational need." "The IRS's General Welfare Exclusion", Congressional Research Service (February 9, 2023). ↑