Income tax credit: sales and use tax paid: natural disasters.

Plain English Breakdown

The official source material does not provide specific details about which natural disasters qualify for this tax credit.

Tax Credit for Sales and Use Taxes Paid After Natural Disasters

The bill allows taxpayers who rebuild their homes after natural disasters to get a credit on their income taxes for sales and use taxes they paid.

What This Bill Does

• Creates a tax credit for people who pay sales or use taxes when buying things needed to rebuild their home after a disaster.
• This credit applies from January 1, 2027, until December 31, 2031.
• The credit covers the amount of sales and use taxes paid on items like building materials and furniture used for rebuilding homes damaged by natural disasters.

Who It Names or Affects

• People who need to rebuild their primary residence due to damage from natural disasters.
• Taxpayers who pay sales or use taxes on items used for rebuilding homes after a disaster.

Terms To Know

Qualified Taxpayer

A person whose main home was damaged by a natural disaster and needs to rebuild it.

Covered Period

The time when a taxpayer is buying items needed for rebuilding their home after a disaster.

Limits and Unknowns

• It's unclear which specific natural disasters qualify under this law.
• Details about performance indicators and data collection requirements for the tax credit have not been fully defined.

Official Summary Text

SB 1343, as amended, Dahle.
Income tax credit: sales and use tax paid: natural disasters.
Existing state sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state of, or on the storage, use, or other consumption in this state of, tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The California Emergency Services Act authorizes the Governor to proclaim a state of emergency in an area affected, or likely to be affected, thereby if certain criteria are met, including there are conditions of disaster or of extreme peril to the safety of persons and property within the state caused by conditions such as air pollution, fire, flood, storm, epidemic, riot, drought, cyberterrorism, sudden and severe energy shortage, electromagnetic pulse attack, or plant or animal infestation or disease.
The
Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would allow, for
a
taxable
year
years
beginning on or after January 1, 2027, and before January 1, 2032, a credit against those taxes to a
taxpayer
qualified taxpayer, as defined,
in an amount equal to
the amount of tax reimbursement paid by the taxpayer, or by a nonprofit housing developer working on behalf of the taxpayer, during a covered period, as defined, for sales tax on gross receipts from the purchase of certain qualified tangible personal property related to rebuilding the taxpayer’s primary residence from damage caused by a natural disaster, as defined. The bill would also allow a similar credit in an amount equal to the amount of use tax paid by the taxpayer during the covered period.
qualified tax payments made during the taxable year, subject to certain limitations. The bill would define “qualified tax payment” to mean an unreimbursed sales or use tax payment paid or incurred by the qualified taxpayer in the taxable year for certain tangible personal property purchased proximate to the date upon which a natural disaster destroyed a qualified taxpayer’s principal residence, major appliances, or residential furniture to replace those items, as specified.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.

Current Bill Text

Download Bill PDF