2020-52: Possible California tax increases coming - Spidell

2020-52: Possible California tax increases coming


AB 1253 (Santiago) is not law yet, but if enacted the bill would impose the following additional taxes retroactively for taxable years beginning on or after January 1, 2020:

  • 1% on income over $1,181,484, but not over $2,362,968;
  • 3% on income over $2,362,968, but not over $5,907,420; and
  • 3.5% on income over $5,907,420.

These increases would mean the California tax rate on income over $1 million would go from 13.3% to 14.3%, and California’s maximum rate would increase to a staggering 16.8%.

Although the bill initially sets $1 million, $2 million, and $5 million as the thresholds, later in the bill those numbers are increased for inflation.

The bill is now pending a hearing in the Senate Governance and Finance Committee, and requires a two-thirds vote of both houses of the Legislature to be enacted.

To view the full text of AB 1253, go to:

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB1253

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