California Assembly Bill AB219

California 2021-2022 Regular Session

• Introduced: 1/11/21
• Refer: 1/28/21
• Report Pass: 2/23/21
• Refer: 2/24/21
• Failed: 2/1/22

Caption

Personal income tax: credit: back-to-school items.

Impact

The intent behind AB219 is to alleviate the financial burden faced by families and educators when purchasing school supplies. By exempting certain items from sales tax and providing tax credits, the bill is aimed at making education-related expenses more manageable for low-income households. However, it notably states that the state will not reimburse local agencies for lost revenue due to the tax exemption, which could lead to concerns about repercussions for local government budgets.

Summary

Assembly Bill 219 (AB219), introduced by Assembly Members Villapudua and Mathis, aims to create a sales tax exemption and a personal income tax credit for back-to-school items. The bill exempts gross receipts from the sale of specified back-to-school items purchased during a designated tax holiday weekend beginning January 1, 2022. It also allows a tax credit based on the amount of sales tax collected from qualified taxpayers who purchase these items during the first week of August. This financial relief is targeted at parents with schoolchildren, students attending postsecondary institutions, and educators, particularly those with household incomes at or below the federal poverty threshold.

Sentiment

Overall, the sentiment surrounding AB219 appears to be positive among its proponents who advocate for the need to support families during the back-to-school season. Supporters highlight that the bill addresses financial challenges for low-income families and also enhances support for educators. However, there is contention regarding the lack of reimbursement for local jurisdictions, which could polarize the opinions between state-level proponents and local government authorities.

Contention

One notable point of contention within AB219 is the lack of provisions for reimbursing local agencies for the sales tax revenue they may lose due to the tax exemption. This provision raises concerns among local governments who argue that the financial impact on their budgets could hinder their operational capabilities. Moreover, the bill's focus on households at or below the federal poverty threshold may be perceived as excluding middle-income families who also face education-related expenses.