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Legislative UpdateCSTC works closely with a Legislative Consultant to keep an eye on important bills that would affect taxpayers and small business owners. Find Your California Representative Jump to a Section:
Property | Small Business | Income & Corporate Tax | Workers' Compensation | Other Bills Property RelatedAB 1611 (Haney) | Taxation: capital gains and losses: single-family rental homes Prohibits the application of a 1031 exchange for anyone owning 50 or more single-family rental homes in California. Status: Not moving forward AB 1620 (Sanchez) | Personal Income Tax Law: deductions: homeowners' insurance premiums Allows a deduction on the cost of a homeowners insurance premium for a primary residence. Status: Not moving forward AB 2394 (Lee) | Personal Income Tax Law: exclusions: real property Excludes capital gains for persons over 55 owning property that meets certain conditions. Status: Not moving forward SB 288 (Seyarto) | Property taxation: change in ownership: family homes and farms Specifies that the one-year period to claim an intergenerational transfer change in ownership exclusion is deemed to commence on the effective date of a probate court's determination of the final ownership of property. Status: Not moving forward SB 623 (Archuleta) | Property taxation: homeowners', veterans', and disabled veterans' exemptions If a related Senate Constitutional Amendment is approved by voters in November 2026, homeowners would be allowed to claim both the homeowners' exemption and the veterans' exemption or the disabled veterans' exemption on the same property. Status: Significantly amended, no longer related to taxes SB 888 (Seyarto) | Property taxation: disabled veterans' exemption: household income States that service-connected disability payments will not count as household income as applied to the disabled veterans' property taxation exemption. Status: Not moving forward Small Business RelatedAB 685 (Solache) | Small Business Resiliency and Innovation Act Creates the Small Business Resiliency and Innovation Fund to provide assistance to small businesses. Status: To the Governor on September 4 SB 347 (Choi) | Annual tax: partnerships and LLCs Reduces the annual tax on every limited partnership, limited liability partnership, and limited liability company from $800 to $600. Status: Will not move forward Income and/or Corporate TaxAB 1265 (Haney) | Income taxes: credits: rehabilitation of certified historic structures Allows the current state historic tax credit program's statutory provisions to expire on December 31, 2027, and authorizes a similar tax credit program, with modifications, to be effective from January 1, 2027, to January 1, 2031. Status: To the Governor on August 31 AB 1550 (Sanchez) | Personal income taxes: deductions: tips: overtime compensation Conforms California law with federal law such that workers can deduct qualifying tips and qualifying overtime pay on top of the standard deduction, rather than choosing one. Status: Not moving forward AB 1565 (Ta) | Income and corporation taxes: credits: work opportunity credit Allows businesses with fewer than five employees a credit, under the Personal Income Tax Law and the Corporation Tax Law, equal to 40% of the wages paid to an employee who has previously been convicted of a felony. Status: Not moving forward AB 1606 (Nguyen) | Personal Income Tax Law: Corporation Tax Law: credits: cleanup costs Provides a one-time tax credit to business entities owning or leasing commercial property for money spent on cleanup costs associated with unhoused encampments. Status: Not moving forward AB 1690 (Ahrens) | Personal Income Tax Law: young child tax credit Expands the Young Child Tax Credit by raising the maximum age of a "qualifying child" over time. Status: Not moving forward AB 1698 (Alanis) | Personal Income Tax Law: Corporation Tax Law: credits: food handler card Applicable to both personal and corporate tax, allows a credit equal to all costs incurred by a "qualified taxpayer" in obtaining legally required food handler cards for their employees. Status: Not moving forward AB 1714 (Tangipa) | Personal income tax: credit: first-time homebuyer program: required repairs Creates a new California personal income tax credit for sellers who must complete certain repairs required to close a sale when the buyer is using a first-time homebuyer assistance program. Status: Not moving forward AB 1726 (Calderon) | Natural disasters: catastrophe savings accounts: personal income tax Creates a new temporary tax deduction and interest exclusion for Californians who save money in a special "catastrophe savings account" to prepare for natural disasters. Status: Not moving forward Expands Personal Income Tax exclusions for military retirement pay, and Survivor Benefit Plan annuity payments. Status: N/A, amended to pertain to removing chemicals from water systems Provides the Franchise Tax Board with the discretion to maintain the tax-exempt status of a 501(c)(3) nonprofit whose federal tax-exempt status was revoked. Status: To the Governor on August 27 AB 2186 (McKinnor) | Personal Income Tax Law: exclusions: reparations programs Creates a temporary state income tax exclusion for reparations payments. Status: To the Governor on August 27 AB 2205 (Quirk-Silva) | Personal Income Tax Law: Corporation Tax Law: New Employment Credit Extends the New Employment Credit for five additional years. Status: Not moving forward Authorizes a refundable credit under the Personal Income Tax and Corporation Tax Laws to local news organizations to hire journalists working in California. Status: To the Governor on September 15 AB 2270 (Arambula) | Low-income housing tax credit: farmworker housing Requires the California Tax Credit Allocation Committee to consider amending the low-income housing tax credit regulatory scoring system to treat farmworker housing as large family projects, and to consider using the same point allocation as rural set-aside projects when assigning points to farmworker housing based on proximity of amenities to an eligible farmworker housing project. This bill also prohibits low-income housing tax credits from financing units that comply with the H-2A program. Status: To the Governor on September 4 Creates a new tax credit specifically for California-based postproduction work. Status: Signed into law - September 19 AB 2336 (Macedo) | Personal Income Tax Law: exclusions from income: retirement: overtime This bill would exclude up to $25,000 of overtime pay and up to $25,000 of defined benefit pension income from state taxable income. Status: Not moving forward Creates a temporary, accelerated depreciation deduction for certain manufacturing-related businesses. Status: Not moving forward AB 2403 (Elhawary) | Income tax: credits: commercial production Creates the commercial production tax credit, for qualified commercial production costs exceeding $500,000. Status: Not moving forward AB 2427 (Tangipa) | Personal Income Tax Law: Corporation Tax Law: tax credits: farming Creates new tax credits for agricultural businesses to support farming operations, equipment investment, and work performed in high fire-risk areas. Status: Not moving forward AB 2444 (Michelle Rodriguez) | Personal Income Tax Law: qualified tuition program This bill updates California's personal income tax law to conform to new federal rules allowing certain 529 plan transfers to Roth IRAs and creates a new state tax deduction for contributions to the state's 529 plan (ScholarShare). Status: Not moving forward AB 2533 (Tangipa) | Personal Income Taxes: unemployment insurance: fitness benefits Excludes from gross income any employer-provided qualified fitness benefit, including gym fees. Status: Not moving forward AB 2591 (Bains) | Personal income tax: standard deduction: federal poverty level Creates the "Taxing Californians into Poverty Protection Act" and replaces California's current standard deduction with a new deduction equal to the federal poverty level for the taxpayer's household size. Status: Not moving forward AB 2673 (Celeste Rodriguez) | Personal Income Tax Law: Corporation Tax Law: credit: childcare Creates a new tax credit allowing taxpayers to claim 50% of "qualified contributions to promote childcare." Status: Not moving forward SB 881 (McNerney) | Income taxation: credits: voluntary contributions: food bank donations Extends the tax credit for food bank donations. Status: To the Governor on August 24 Creates a new employer credit for agricultural overtime. Agricultural employers may claim a credit equal to the overtime wages paid each quarter. Status: Not moving forward SB 984 (Ochoa Bogh) | Personal Income Tax Law: deductions: tips Allows taxpayers to deduct qualified tips from their taxable income, matching a temporary federal deduction that exists through 2028. Status: Not moving forward SB 1045 (Strickland) | Personal income tax A spot bill related to income tax. Status: Not moving forward SB 1084 (Alvarado-Gil) | Personal income taxes: Fire Safe Home Tax Credits Act Creates two new personal income tax credits to help homeowners in fire-prone areas pay for home hardening and vegetation management. Status: Not moving forward SB 1096 (Dahle) | Personal income tax: senior tax credit: dependents: qualifying child Authorizes a personal income tax credit for seniors 65+ with no earned income, equal to $1,500 per dependent, subject to a phase-out above specified income levels. Status: Not moving forward SB 1102 (Dahle) | Personal Income Tax Law: credit: nurses Creates a new personal income tax credit for licensed nurses working in rural health facilities. Status: Not moving forward SB 1113 (Valladares) | Corporation taxes exclusions: qualifying shipping activities Excludes amounts received from qualifying shipping activities from gross income subject to the Corporation Tax when a federal tonnage tax election is in effect. Status: Not moving forward Creates new income tax and corporation tax credits to encourage the purchase of backup electricity generators and solar batteries in high-risk wildfire areas. Status: Not moving forward SB 1120 (McNerney) | Personal Income Tax Law: Corporation Tax Law: credits: CalCompetes Expands the California Competes Tax Credit program and allows certain taxpayers in "strategic industries" to elect to make their CCTC refundable. "Strategic industry" means industries involved in developing nuclear fusion technologies, quantum technology, or other industries identified in the California Jobs First State Economic Blueprint. Status: Not moving forward SB 1137 (Valladares) | Personal income tax: deduction: medical expenses Authorizes an above-the-line deduction up to $5,000 for unreimbursed medical costs exceeding 4% of a qualified taxpayer's federal AGI. Status: Not moving forward SB 1144 (Valladares) | Personal income taxes: exemption credit: dependents Increases the dependent exemption credit from $475 to $700 per dependent. Status: Not moving forward SB 1249 (Richardson) | Personal income taxes: deductions: elderly seniors Authorizes a deduction from gross income, equal to $3,000 for each "qualified individual" for five taxable years, as specified. Status: Not moving forward SB 1277 (Grove) | Taxation: Personal Income Tax Law: cost-of-living refundable tax credit Establishes a refundable personal income tax credit available to California residents. Status: Not moving forward SB 1343 (Dahle) | Income tax credit: sales and use tax paid: natural disasters Authorizes a personal income tax credit for reimbursement of sales and use tax paid to replace certain tangible personal property destroyed by a natural disaster. Status: Not moving forward Expands personal income tax exclusions for military retirement pay, and Survivor Benefit Plan annuity payments. Status: Not moving forward Worker's CompensationAB 1576 (Ortega) | Workers' compensation: Subsequent injuries payments Relates to the Subsequent Injuries Benefits Trust Fund and clarifies how disability should be measured for workers who suffer a second injury and adds new rules around second injuries occurring after 2027. Status: Not moving forward Other Bills of InterestAB 1790 (Connolly) | Corporations Tax Law: water's-edge election: global intangible low-taxed income Repeals the current water's-edge election and moves the state toward mandatory worldwide combined reporting. Status: Not moving forward AB 2650 (Pellerin) | CalSavers: retirement savings Updates and expands the CalSavers Retirement Savings Program, which requires certain California employers to offer employees access to a state-facilitated IRA program when the employer does not provide its own retirement plan. Status: Not moving forward Directs the Legislative Analyst's Office to comprehensively assess the state's major tax expenditures, issue a report, and make a recommendation to the Legislature. Status: Signed into law - September 20 |
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