Tax Relief & Economic Incentives

Exempts certified microbusinesses from California's $800 annual minimum franchise tax starting January 2025. Applies to corporations, limited partnerships, LLCs, and limited liability partnerships that qualify as microbusinesses. Continues tax exemptions for small businesses owned by deployed military members operating at a loss until 2030. Takes immediate effect as a tax levy under California's Constitution.

Requires California commercial property owners to report annual vacancy data to state tax authorities by 2025. Mandates tracking of vacant days, reasons for vacancy, and renovation status for each commercial property. Imposes civil penalties on property owners who fail to submit timely vacancy reports. Creates a public database of commercial property vacancy rates organized by ZIP code.

Excludes tips from California personal income tax and unemployment insurance calculations from 2026 through 2030. Requires employees to report tips to employers monthly through written statements by the 10th of each month. Modifies employer payroll withholding requirements to exclude tips from wage calculations. Mandates the Franchise Tax Board to report on tax returns claiming the tip exemption by December 2036.

Establishes a $5,000 annual tax credit for medical professionals who provide services in rural California areas. Applies to licensed healthcare providers including doctors, nurses, dentists, and therapists through 2032. Allows unused portions of the credit to be carried forward for up to seven years if exceeding annual tax liability.

Establishes a new tax credit for residential property insurance premium increases above 2023 baseline costs. Limits eligibility to homeowners earning under $300,000 jointly or $150,000 individually through 2030. Excludes properties valued over $3.3 million and those purchased after December 31, 2023. Requires annual reporting on credit usage and impact on insurance premium increases.

Expands eligibility for state social services grants to include nonprofits with state tax-exempt status. Requires nonprofit organizations to have three years of experience providing immigrant services. Establishes a new program providing resettlement services for asylees and vulnerable noncitizens. Mandates reporting and monitoring requirements for all grant recipients.

Establishes a new state tax deduction of up to $5,000 for out-of-pocket medical expenses. Takes effect January 2025 and automatically expires in December 2030. Requires annual reports tracking the number of taxpayers claiming the deduction and average amounts. Applies only to medical costs not covered by insurance or other reimbursements.

Reduces personal income tax rates by 1-2% across most tax brackets from 2025 through 2029.

Provides a $250 tax credit for California homeowners who purchase and install home security surveillance systems. Establishes a five-year program running from 2026 through 2030 for single-family primary residences. Allows unused portions of the credit to be carried forward to future tax years until fully used. Requires annual reporting from the Franchise Tax Board on the number of taxpayers claiming the credit.

Establishes a new tax credit of up to $10,000 for retail businesses to invest in theft prevention measures. Covers security equipment like cameras, alarms, and lighting for retailers with qualifying expenses over $300-500. Takes effect January 2025 and automatically expires in December 2030. Requires annual reporting on credit usage and total value of credits issued starting December 2026.

Establishes a new tax credit for agricultural employers who pay overtime wages to farmworkers. Allows employers to claim credits equal to overtime wages paid, up to their quarterly withholding amount. Maintains existing tax withholding requirements for both employers and employees. Authorizes the Employment Development Department to create rules for implementing the credit system.

Establishes a new tax credit for manufacturers to offset local sales taxes on equipment purchases from 2026 to 2031. Allows unused portions of the tax credit to be carried forward for up to eight years. Requires taxpayers to file amended returns if equipment is moved out of state within one year of purchase. Mandates the Franchise Tax Board to report on total credits claimed and number of beneficiaries by 2031.

Exempts overtime pay from state income tax for first responders working during declared disasters. Applies to emergency response work performed between 2025 and 2030 in disaster-declared counties. Covers first responders who live or work in affected counties or are deployed through mutual aid. Authorizes the Franchise Tax Board to establish verification procedures and documentation requirements.

Exempts overtime pay from state income tax for first responders working during declared emergencies. Takes effect January 2025 and automatically expires in December 2030. Requires the Franchise Tax Board to establish verification procedures for claiming the tax benefit. Applies only to overtime wages earned during official emergency response deployments.

Exempts wages from state income tax for local first responders who assist during emergencies outside their jurisdiction. Creates a five-year tax benefit program running from January 2025 through December 2030. Applies only to emergency response work performed outside a first responder's regular service area. Authorizes the Franchise Tax Board to establish verification procedures and documentation requirements.

Increases the California renter's tax credit from $120 to $2,000 for joint filers and from $60 to $1,000 for individuals. Expands income eligibility limits to $150,000 for joint filers and $75,000 for individuals. Makes the expanded credit refundable, allowing renters to receive the full amount even if it exceeds their tax liability. Requires annual inflation adjustments to credit amounts and income limits for five years once funded.

Allows California teachers to deduct classroom supplies and professional development expenses from state taxes. Aligns state tax law with federal deductions for teachers from 2026 through 2030. Requires the Franchise Tax Board to track deduction claims and evaluate their benefit to students. Takes effect immediately to support teachers who pay out-of-pocket for classroom materials.

Exempts churches and nonprofits from mandatory electric vehicle charging station installation requirements. Protects tax-exempt status of churches and nonprofits that install EV charging stations. Requires a report by 2030 on the number of exempt organizations installing charging stations. Maintains property tax exemptions for religious and nonprofit properties with charging stations.

Exempts up to $300,000 in annual income for taxpayers whose property was damaged or deemed uninhabitable by disasters. Applies to income earned during the disaster year and the following year, effective from 2025 through 2035. Covers homeowners, residents, and business owners affected by qualifying disasters. Requires affected taxpayers to provide documentation to the Franchise Tax Board upon request.

Establishes a new tax checkoff fund to support pediatric cancer research and education in California. Requires annual contributions of at least $250,000 to maintain the fund's operation. Allocates funds to University of California for research grants and community education programs. Expires after seven years unless renewed, with contributions remaining tax-deductible.

Excludes stolen or unauthorized transferred investment interest income from state taxes starting in 2026. Prevents taxpayers from claiming both the exclusion and a deduction for the same stolen interest income. Takes effect immediately as a tax levy under California law.

Excludes charitable remainder trusts from incomplete gift nongrantor trust tax requirements. Requires 90% of qualifying trust income to be distributed to charitable organizations. Grants the Franchise Tax Board authority to establish implementation regulations.

Establishes a new state program to finance affordable home construction through tax credits by 2027. Targets moderate-income buyers facing barriers like student debt, natural disasters, or systemic racism. Provides tax credits covering 40% of construction costs to incentivize affordable home development. Requires annual effectiveness reviews starting 2028 and expires December 31, 2031.

Makes permanent the 15% tax credit for food donations to California food banks. Allows farmers and food producers to claim credits for donating fresh produce and staple foods. Requires food banks to certify donations and provide detailed documentation for tax claims.

Reduces the annual minimum franchise tax for corporations based on their gross receipts starting January 2025. Establishes a tiered tax system ranging from $200 to $800 depending on corporate revenue levels. Maintains the current $800 tax for businesses with gross receipts over $15 million. Requires annual reports from the Franchise Tax Board to assess impact on small businesses.