Plain English Breakdown
The official text states the bill takes effect immediately as an urgency statute but does not provide a specific calendar date for enactment.
Tax Exclusion for Wildfire Settlements
This law allows certain taxpayers to exclude settlement money received for losses from three specific wildfires from their state gross income.
What This Bill Does
- Provides an exclusion from gross income for amounts received in settlements related to the 2021 Dixie Fire, 2022 Mill Fire, and 2024 Park Fire.
- Applies to taxable years beginning on or after January 1, 2022, and before January 1, 2027.
- Covers costs and losses associated with the Dixie Fire in Butte, Plumas, Lassen, Shasta, and Tehama counties.
- Covers costs and losses associated with the Mill Fire in Siskiyou County.
- Covers costs and losses associated with the Park Fire in Butte and Tehama counties.
- Includes required goals, performance indicators, and data collection for this new tax expenditure.
Who It Names or Affects
- Qualified taxpayers who receive settlement amounts for wildfire-related costs and losses as defined by the bill.
- Individuals subject to the Personal Income Tax Law.
- Corporations subject to the Corporation Tax Law.
Terms To Know
- Gross income
- Income from any source, unless specifically excluded by law.
- Exclusion from gross income
- A rule that allows certain money to be left out when calculating total taxable income.
- Taxable year
- The 12-month period used for filing taxes, which this law covers starting in 2022 and ending before 2027.
Limits and Unknowns
- The exclusion only applies to settlements from the three specific fires listed: Dixie (2021), Mill (2022), and Park (2024).
- It does not cover wildfire losses outside the specified counties or years.
- The exact definition of a 'qualified taxpayer' is referenced but not detailed in this summary text.