Income tax credit: sales and use tax paid: natural disasters.
SB 1343
California Bills
20250SB__134398AMD INTRODUCED 2026-02-20 AMENDED_SENATE 2026-04-23 2025 SB AMD Introduced by Senators Dahle and Allen (Coauthors: Senators Alvarado-Gil, Cortese, and Wahab) (Coauthors: Assembly Members Macedo, Schiavo, and Zbur) LEAD_AUTHOR SENATE Dahle LEAD_AUTHOR SENATE Allen COAUTHOR SENATE Alvarado-Gil COAUTHOR SENATE Cortese COAUTHOR SENATE Wahab COAUTHOR ASSEMBLY Macedo COAUTHOR ASSEMBLY Schiavo COAUTHOR ASSEMBLY Zbur
An act to add and repeal
Section 17052.13 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. taxation, to take effect immediately, tax levy Income tax credit: sales and use tax paid: natural disasters. Existing state sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state of, 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.
The California Emergency Services Act authorizes the Governor to proclaim a state of emergency in an area affected, or likely to be affected, thereby if certain criteria are met, including there are conditions of disaster or of extreme peril to the safety of persons and property within the state caused by conditions such as air pollution, fire, flood, storm, epidemic, riot, drought, cyberterrorism, sudden and severe energy shortage, electromagnetic pulse attack, or plant or animal infestation or disease.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill would allow, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, a credit against those taxes to a qualified taxpayer, as defined, in an amount equal to qualified tax payments made during the taxable year, subject to certain limitations.
The bill would define “qualified tax payment” to mean an unreimbursed sales or use tax payment paid or incurred by the qualified taxpayer in the taxable year for certain tangible personal property purchased proximate to the date upon which a natural disaster destroyed a qualified taxpayer’s principal residence, major appliances, or residential furniture to replace those items, as specified. 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 also would include additional information required for any bill authorizing a new tax expenditure. This bill would take effect immediately as a tax levy. MAJORITY NO YES NO YES NO YES NO NO NO NO The people of the State of California do enact as follows:
SECTION
Section 17052.13 is added to the Revenue and Taxation Code , to read: <caml:Num>17052.13.</caml:Num><caml:LawSectionVersion id="id_8D9DF2C3-D615-4FC2-998E-CA73D37FF2F6"><caml:Content><xhtml:p>(a)<xhtml:span class="EnSpace"/>(1)<xhtml:span class="EnSpace"/>For each taxable year beginning on or after January 1, 2027, and before January 1, 2032, a taxpayer shall be allowed a credit against the “net tax,” as defined in
Section 17039, in an amount equal to the amount of tax reimbursement paid by the taxpayer, or by a nonprofit housing developer working on behalf of the taxpayer, during a covered period for sales tax on gross receipts from the purchase of qualified tangible personal property.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>For each taxable year beginning on or after January 1, 2027, and before January 1, 2032, a taxpayer shall be allowed a credit against the “net tax,” as defined in
Section 17039, in an amount equal to the amount of use tax paid by the taxpayer, or by a nonprofit housing developer working on behalf of the taxpayer, during a covered period for storage, use, or other consumption of qualified tangible personal property.</xhtml:p></caml:Content></caml:LawSectionVersion></caml:LawSection>"?> 17052.13. (
a) For taxable years beginning on or after January 1, 2027, and before January 1, 2032, a qualified taxpayer shall be allowed a credit against the “net tax,” as defined in
Section 17039, in an amount equal to qualified tax payments made during the taxable year, not to exceed four thousand dollars ($4,000) per taxable year, subject to the limitation described in paragraph (2) subdivision (c). (
b) As used in this section: (1) “Covered period” means a period of time that begins on the date a natural disaster damaged or destroyed a qualified taxpayer’s principal residence, major appliances, or residential furniture and ends on the date on which the earliest of the following occurs: (
A) Three years from the date damage or destruction to the taxpayer’s principal residence, major appliances, or residential furniture ceases. (
B) Three years from the date the natural disaster is no longer proclaimed as an open state of emergency. (
C) December of the last tax year for which this credit is authorized pursuant to subdivision (a). (2) “Major appliance” means an appliance primarily used for residential purposes purchased for use in the taxpayer’s primary residence to replace an appliance that was damaged or destroyed in a natural disaster, including, but not limited to, any of the following normally used or sold for personal, family, household, or home office use: (
A) A refrigerator. (
B) A freezer. (
C) A range. (
D) A microwave oven. (
E) A washing machine. (
F) A clothes dryer. (
G) A dishwasher. (
H) A trash compactor. (
I) An ice maker. (
J) A dehumidifier. (
K) A residential portable furnace. (
L) A room air conditioner. (3) “Natural disaster” means a major misfortune or calamity that is the subject of a state of emergency proclaimed by the Governor pursuant to
Section of the Government Code. (4) “Principal residence” means a dwelling or housing unit for which a homeowners’ exemption pursuant to
Section has been granted to the qualified taxpayer in the taxable year for which the credit allowed by this
section is claimed. (4)</xhtml:p>"?> (5) “Qualified tangible personal property” means a major appliance or residential furniture with a sales price of three thousand five hundred dollars ($3,500) or less, or, in the case of bundled purchases, three thousand five hundred dollars ($3,500) or less per item. (A)<xhtml:span class="EnSpace"/>A major appliance.</xhtml:p><xhtml:p>(B)<xhtml:span class="EnSpace"/>Residential furniture.</xhtml:p><xhtml:p>(C)<xhtml:span class="EnSpace"/>Residential building supplies.</xhtml:p><xhtml:p>(5)<xhtml:span class="EnSpace"/>“Residential building supplies” means any of the following items if used in the taxpayer’s primary residence and reasonably determined by the Franchise Tax Board to be for the purpose of restoration, repair, replacement, or rebuilding due to a natural disaster, the sales price per item of which is not more than five hundred dollars ($500):</xhtml:p><xhtml:p>(A)<xhtml:span class="EnSpace"/>Cleaning and disinfecting materials, as determined by the Franchise Tax Board.</xhtml:p><xhtml:p>(B)<xhtml:span class="EnSpace"/>Construction tools and hardware, as determined by the Franchise Tax Board.</xhtml:p><xhtml:p>(C)<xhtml:span class="EnSpace"/>Roofing shingles, roofing paper, gutters, downspouts, vents, doors, windows, sheetrock, drywall, insulation, paint and paint materials, flooring, and other necessary building materials, as determined by the Franchise Tax Board.</xhtml:p>"?> (6) “Qualified tax payment” means an unreimbursed tax payment paid or incurred by the qualified taxpayer in the taxable year for qualified tangible personal property during the covered period. (7) “Qualified taxpayer” means a taxpayer whose principal residence was damaged by a natural disaster and received a property reassessment pursuant to
Section 170. (6)</xhtml:p>"?> (8) “Residential furniture” means furniture commonly used in a residential dwelling, including, but not limited to, a chair, sofa, loveseat, coffee table, end table, dining table, dining chair, bed frame, dresser, chest of drawers, bedside table, ottoman, lamp, or wall mirror, that is purchased for use in the taxpayer’s primary residence to replace furniture that was damaged or destroyed in a natural disaster. (7)<xhtml:span class="EnSpace"/>“Sales tax” means a sales tax levied pursuant to any of the following:</xhtml:p><xhtml:p>(A)<xhtml:span class="EnSpace"/>Part 1 (commencing with
Section 6001).</xhtml:p><xhtml:p>(B)<xhtml:span class="EnSpace"/>Part 1.5 (commencing with
Section 7200).</xhtml:p><xhtml:p>(C)<xhtml:span class="EnSpace"/>Part 1.6 (commencing with
Section 7251).</xhtml:p><xhtml:p>(D)<xhtml:span class="EnSpace"/>Part 1.7 (commencing with 7280).</xhtml:p><xhtml:p>(8)<xhtml:span class="EnSpace"/>“Use tax” means a use tax levied pursuant to any of the following:</xhtml:p><xhtml:p>(A)<xhtml:span class="EnSpace"/>Part 1 (commencing with
Section 6001).</xhtml:p><xhtml:p>(B)<xhtml:span class="EnSpace"/>Part 1.5 (commencing with
Section 7200).</xhtml:p><xhtml:p>(C)<xhtml:span class="EnSpace"/>Part 1.6 (commencing with
Section 7251).</xhtml:p><xhtml:p>(D)<xhtml:span class="EnSpace"/>Part 1.7 (commencing with 7280).</xhtml:p>"?> (9) “Tax payment” means either of the following: (
A) A sales tax reimbursement paid by the taxpayer to a retailer, as reimbursement for a tax imposed by
Chapter 2 (commencing with
Section 6051) of
Part 1,
Part 1.5 (commencing with
Section 7200),
Part 1.6 (commencing with
Section 7251), or
Part 1.7 (commencing with
Section 7280). (
B) A use tax paid by the taxpayer pursuant to
Chapter 3 (commencing with
Section 6201) of
Part 1,
Part 1.5 (commencing with
Section 7200),
Part 1.6 (commencing with
Section 7251), or
Part 1.7 (commencing with
Section 7280). (c)
(1) If a credit allowed by this
section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and not more than five succeeding years, if necessary, until the credit is exhausted. (2) (
A) The total amount of the credit allowed under this
section with respect to any particular natural disaster shall not exceed four thousand dollars ($4,000). (
B) The maximum amount of credit that may be claimed per taxable year shall be reduced by six dollars ($6) for every one hundred dollars ($100) of adjusted gross income above either of the following: (
i) For spouses filing a joint return, a head of household, or a surviving spouse, as defined in
Section 17046, two hundred fifty thousand dollars ($250,000). (ii) For a single individual or a married individual filing separately, one hundred twenty-five thousand dollars ($125,000). (
C) If two taxpayers file a joint return, the total amount of the credit that may be claimed shall not exceed four thousand dollars ($4,000). (
D) If a taxpayer has filed a separate return for a taxable year for which a joint return could have been filed, only one of the taxpayers that could have filed jointly shall be allowed the credit allowed under this section. (d)<xhtml:span class="EnSpace"/>The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.</xhtml:p>"?> (
d) The credit allowed pursuant to this
section shall be in lieu of any other credit that the taxpayer may otherwise be allowed under this part with respect to amounts taken into account in calculating the credit allowed by this section. (
e) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section. (
f) If the taxpayer receives insurance proceeds, grant funds, rebates, or any other reimbursement for any amount taken into account in computing the credit, the tax otherwise due for the taxable year in which the reimbursement is received shall be increased by the portion of the credit attributable to the reimbursed amount. Any credit, deduction, or basis attributable to that reimbursed amount shall be adjusted accordingly. (e)</xhtml:p>"?> (
g) For the purpose of complying with
Section 41, the Legislature finds and declares the following with respect to the tax credits allowed by this section:
(1) The specific goal that the credits will achieve is to help Californians rebuild from natural disasters. (2)<xhtml:span class="EnSpace"/>(A)<xhtml:span class="EnSpace"/>The Legislative Analyst’s Office, on or before January 1, 2029, shall review the effectiveness of the credits allowed under this
section and post the review on the office’s internet website.</xhtml:p><xhtml:p>(B)<xhtml:span class="EnSpace"/>The review required by this paragraph shall include, but not be limited to, an analysis of the demand for the credits and the economic impact of the credits.</xhtml:p>"?>
(2) The performance indicators for the Legislature to use in determining whether the credit achieves the stated objective shall be both of the following: (
A) The number of California taxpayers who receive the credit allowed under this section. (
B) The aggregate dollar amount of credits claimed under this section.
(3) On or before June 30, 2029, and each June thereafter, the Franchise Tax Board shall submit a report to the Legislature, pursuant to
Section of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this
section for the most recent taxable year and the aggregate credit amount claimed. (f)</xhtml:p>"?> (
h) This
section shall remain in effect only until December 1, 2037, and as of that date is repealed.
SEC. 2. This act provides for a tax levy within the meaning of