AB 755
Income tax: exclusion: disasters.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Revenue and Taxation
Take action
Record your position on this measure.
Sign in to record your position, submit testimony, or contact your legislator.
Sign in to take action- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill creates an exclusion from California state income tax for individuals and businesses affected by disasters. Specifically, qualified taxpayers who have experienced damage to their real property, residence, or business due to a disaster (as defined by state law) during a calendar year and the following calendar year may exclude up to $300,000 of income received during those two years from their taxable income. The exclusion applies from January 1, 2025, through December 1, 2035.
Key provisions
- Provides an income tax exclusion for qualified taxpayers.
- The exclusion applies to income received due to a disaster.
- The maximum exclusion amount is $300,000 per taxable year.
- The exclusion applies to taxpayers who own damaged property, reside in a damaged area, or operate a business in a damaged area.
- The disaster must have occurred and been deemed uninhabitable during the year and the following year.
- The exclusion is in effect from January 1, 2025, to December 1, 2035.
- Requires qualified taxpayers to provide information to the Franchise Tax Board upon request.
- Includes a finding and declaration regarding the goal of alleviating financial burdens for disaster victims.
Who is affected
- Taxpayers
- Homeowners
- Business Owners
- Individuals affected by natural disasters
- California Residents
Notable changes
Arguments in favor
Reasons to support this legislation.
No arguments in favor have been submitted.
Submit yoursArguments opposed
Reasons to oppose this legislation.
No arguments opposed have been submitted.
Submit yoursRead the latest version inline or switch to a previous version.
AB755:v99#DOCUMENT
Bill Start
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 755
| Introduced by Assembly Member Tangipa |
| February 18, 2025 |
An act to add and repeal Sections 17139.7 and 24309.4 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 755, as introduced, Tangipa. Income tax: exclusion: disasters.
The Personal Income Tax Law and the Corporation Tax Law, in modified conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.
This bill, for taxable years beginning on or after January 1, 2025, and before January 1, 2035, would provide an exclusion from gross income for amounts received as income, not to exceed $300,000 per taxable year, by a qualified taxpayer whose real property, residence, or business burned or was deemed uninhabitable due to a disaster, as defined, during the taxable year in which the disaster occurred and the following taxable year.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 17139.7 is added to the Revenue and Taxation Code, to read:
17139.7.
(a) For taxable years beginning on or after January 1, 2025, and before January 1, 2035, gross income does not include any qualified income received by a qualified taxpayer in a qualified taxable year, not to exceed three hundred thousand dollars ($300,000) per taxable year.
(b) For purposes of this section, the following definitions apply:
(1) “Disaster” has the same meaning as in Section 8680.3 of the Government Code.
(2) “Qualified income” means all taxable income earned by the taxpayer in that taxable year, not to exceed three hundred thousand dollars ($300,000) per taxable year.
(3) “Qualified taxable year” means the taxable year in which the disaster occurred and the following taxable year.
(4) “Qualified taxpayer” means any of the following:
(A) Any taxpayer who owns real property located in an area damaged by a disaster, and the real property burned or was deemed uninhabitable due to the disaster.
(B) Any taxpayer who resides within an area damaged by a disaster, and whose residential dwelling unit burned or was deemed uninhabitable due to the disaster.
(C) Any taxpayer who has a place of business within an area damaged by a disaster, and whose place of business burned or was deemed uninhabitable due to the disaster.
(c) The qualified taxpayer shall provide, upon request, all necessary information in the form and manner prescribed by the Franchise Tax Board.
(d) For purposes of complying with Section 41, with respect to this section and Section 24309.4, the Legislature finds and declares that the goal, purpose, and objective of the measure is to exempt victims of natural disasters from state income taxes to alleviate financial burdens during recovery, allowing them to focus on rebuilding their lives without the added stress of tax obligations.
(e) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.
SEC. 2.
Section 24309.4 is added to the Revenue and Taxation Code, to read:
24309.4.
(a) For taxable years beginning on or after January 1, 2025, and before January 1, 2035, gross income does not include any qualified income received by a qualified taxpayer in a qualified taxable year, not to exceed three hundred thousand dollars ($300,000) per taxable year.
(b) For purposes of this section, the following definitions apply:
(1) “Disaster” has the same meaning as in Section 8680.3 of the Government Code.
(2) “Qualified income” means all taxable income earned by the taxpayer in that taxable year, not to exceed three hundred thousand dollars ($300,000) per taxable year.
(3) “Qualified taxable year” means the taxable year in which the disaster occurred and the following taxable year.
(4) “Qualified taxpayer” means any of the following:
(A) Any taxpayer who owns real property located in an area damaged by a disaster, and the real property burned or was deemed uninhabitable due to the disaster.
(B) Any taxpayer who has a place of business within an area damaged by a disaster, and whose place of business burned or was deemed uninhabitable due to the disaster.
(c) The qualified taxpayer shall provide, upon request, all necessary information in the form and manner prescribed by the Franchise Tax Board.
(d) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.
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.