Highlighted Tax Bills in 2012 Legislative Session
Monday Morning Report, March 12, 2012
The California State Legislature has passed the deadline for introducing new bills (with some exceptions) for the second half of the 2011-12 legislative session. Lawmakers have been holding overview hearings on the governor's proposed budget, and introducing a flurry of bills. By February 24, the last day for bill introductions, there were more than 1,800 new bills. Exempted from this deadline are bills proposing amendments to the state constitution, committee-sponsored bills, and bills that receive a rule waiver.
There are several significant legislative tax proposals this year, but fewer than in the previous year, as the governor's income and sales tax increase initiative tends to dominate tax discussions. Election-year dynamics also make lawmakers running for re-election more skittish of proposing tax increases.
Significant tax proposals introduced in 2012 include: imposition of a sales tax on services; a proposal to review the frequency of business property tax assessments; and changes to the income apportionment formula for multi-state companies. Several pro-taxpayer proposals include: a sales and use tax manufacturing exemption; interest equalization on overpayment and underpayment for Board of Equalization-administered taxes; and withdrawal of certain tax liens from credit reports. There also were a number of bills to allocate cap-and-trade revenue. The state will soon begin auctioning of greenhouse gas emission allowances under this program, and it is anticipated to generate about $1 billion.
A bill introduced in 2012 may not be taken up for vote until the 31st day after it is in print for public review, and Senate bills may not be amended until that time. However, Assembly bills may be amended as soon as they are referred to a committee.
