AB 2799

Bill Subjects

Abstract

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. Under existing federal law, Section 8 of the United States Housing Act of 1937 (Section 8) , the United States Department of Housing and Urban Development is authorized to enter into annual contributions contacts with public housing agencies pursuant to which those agencies are authorized to enter into contracts with owners of dwelling units to make housing assistance payments, including tenant-based assistance payments to benefit low-income families and rental assistance to certain homeless veterans. This bill, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, would allow a credit against those taxes to a qualified taxpayer, as defined, in an amount equal to 3% of the amount of rent or lease payments in the form of certain federal housing assistance vouchers issued under Section 8 per qualified property, defined as a dwelling or unit rented or leased to persons receiving certain federal assistance. The bill would require the taxpayer, to be eligible for the credit, to obtain verification from the appropriate local housing authority, as defined, that the property for which a credit is claimed satisfies the definition of qualified property and to provide a copy of the verification to the Franchise Tax Board. This bill would limit the credit to 5 qualified properties per taxpayer per taxable year. The bill would also provide that the credit amount is $0 for each taxable year beginning on or after January 1, 2021, and before January 1, 2026, unless otherwise specified in a bill providing for appropriations related to the Budget Act. Existing law requires any bill authorizing a new tax expenditure, including income tax credits under the Personal Income Tax Law and the Corporation Tax Law, to contain, among other things, specific goals, purposes, and objectives that the new tax expenditure will achieve, detailed performance indicators, and data collection requirements, as provided. This bill would also include that additional information required for any bill authorizing a new tax expenditure. By imposing new duties upon local government officials with respect to the verification of qualified properties, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. This bill would take effect immediately as a tax levy.