By refining the definition of 'foreign country,' AB 985 aims to align the language used within the Revenue and Taxation Code more closely with current fiscal practices. While the changes are deemed nonsubstantive, they may have implications for taxpayers who engage in international transactions. Effectively, this bill reinforces the established framework for how foreign income is perceived within the scope of California’s tax system, potentially affecting those individuals and entities that report income sourced from other countries.
Summary
Assembly Bill No. 985, introduced by Assembly Member Mullin, seeks to amend Section 17019 of the Revenue and Taxation Code, which pertains to personal income tax. The primary objective of this bill is to clarify and make nonsubstantive changes to the definition of 'foreign country' as it relates to taxable income for California's personal income tax. Specifically, the bill stipulates that a foreign country is defined as any jurisdiction not included within the United States. This clarification is intended to ensure that income derived from outside the United States is accurately categorized for tax purposes.
Contention
Although the bill's changes are presented as nonsubstantive, discussions surrounding amendments to tax codes often provoke scrutiny related to how they impact individuals and businesses. Some stakeholders may express concerns that even minor modifications in tax language can lead to unintended consequences, particularly in the interpretation of tax law enforcement. Given the sensitive nature around taxation and its implications for personal and business finance, any adjustment—no matter how minor—can be met with resistance or calls for more comprehensive reform.
Personal income tax: voluntary contributions: California Breast Cancer Research Voluntary Tax Contribution Fund and California Cancer Research Voluntary Tax Contribution Fund.