Bill > SB268

This bill creates a temporary tax exclusion for individuals and businesses affected by natural disasters or other catastrophic events in California. For tax years between January 1, 2025, and January 1, 2030, the bill allows "qualified taxpayers" to exclude from their gross income any settlement amounts received to replace property damaged or destroyed during a state or local emergency. Qualified taxpayers include property owners, business owners, and residents in areas impacted by disasters, who have paid expenses and received settlement payments from an approved settlement entity. The bill specifically defines a "settlement entity" as an organization approved by a class action settlement administrator. The Franchise Tax Board can request documentation of these settlement payments from either the settlement entity or the qualified taxpayer. The legislation aims to provide financial relief to individuals and businesses suffering losses from disasters by reducing their tax burden on settlement funds. The bill includes provisions that will automatically repeal the tax exclusion on December 1, 2030, and takes effect immediately as a tax levy. The Legislature acknowledges the goal of the exclusion is to provide essential relief to those experiencing injury, loss, and expenses from disasters, and notes that no specific data collection is required for these tax exclusions.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB268