Bill > AB376

This bill adds two new sections to the California Revenue and Taxation Code to provide tax relief for individuals and businesses impacted by wildfires. For taxable years between January 1, 2023, and January 1, 2028, the bill creates an exclusion from gross income for "qualified amounts" received through settlements related to wildfire damage. A qualified taxpayer includes property owners, residents, or business owners located in areas damaged by wildfires who have paid expenses or received settlement funds directly related to the wildfire. The bill defines a "settlement entity" as the organization approved by a class action settlement administrator making payments to qualified taxpayers. The Franchise Tax Board will be required to submit a report by November 1, 2028, detailing the number of qualified taxpayers who excluded settlement amounts and the total aggregate amount of those settlement payments. The Legislature explicitly states that this tax exclusion serves the public purpose of preventing undue hardship for taxpayers affected by devastating wildfires and does not constitute a gift of public funds. The bill takes effect immediately as a tax levy and includes provisions for the settlement entities to provide documentation of payments upon request by the Franchise Tax Board.

Budget and Finance

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