Personal Income Tax Law: Corporation Tax Law: Bobcat Fire: exclusions.
If enacted, AB 97 would significantly impact California's Revenue and Taxation Code by establishing Sections 17139.1 and 24309.9. These new provisions would define 'qualified taxpayers' as those who owned property, resided, or conducted business in Los Angeles County during the fire, thus ensuring that their settlement amounts are excluded from taxable income. This exclusion intends to prevent undue hardship for households and entities recovering from the tragedy while aiming for a swift economic recovery in the affected areas. The legislation also underlines the necessity of this exclusion as important for public welfare, characterizing it as an urgency statute for immediate effect.
Assembly Bill 97, introduced by Assembly Member Lackey, addresses the aftermath of the 2020 Bobcat Fire in California by providing specific tax exclusions for individuals and businesses affected by the fire. It proposes to exclude any amounts received by qualified taxpayers in settlements related to costs and losses incurred due to the fire from their gross income for the tax years between January 1, 2024, and January 1, 2029. This measure aims to alleviate the financial burden on residents and businesses located in the County of Los Angeles who suffered damages or losses during the devastating wildfire.
The bill's urgency declaration signals legislative intent to promptly address economic relief for fire-stricken areas. One notable point of contention could arise regarding the evaluation and reporting of the tax expenditure's effectiveness, as the bill mandates reporting on the number of taxpayers benefiting from the exclusion and the aggregate amounts received in settlements. There might be concerns from various stakeholders regarding the long-term fiscal impacts of these exclusions on state revenue and whether such tax expenditures could set precedence for future wildfire relief efforts or similar situations.