RIVERSIDE – Sen. Jeff Stone, R-La. Quinta, introduced legislation seeking to change the thresholds determining when and how much residents pay in state taxes, while mandating that “wealthy individuals” who live part-time in California start shouldering a greater share of the tax burden.
“The working families of California shouldn’t have to pay for the Hollywood elite and the Silicon Valley billionaires who use our roads, take advantage of our health care system and enjoy our parks and beaches without paying income taxes here, even though they essentially live here,” Stone said.
Under Senate Bill 1352, the Saving Money and Reducing Taxes – SMART – Act, Stone wants to exempt single tax filers who reside in California year-round from paying any state income taxes on the first $100,000 they earn.
The bill would also exempt the first $200,000 of combined income earned by a married couple filing jointly. However, people who identify themselves as non-resident property owners would be required to file income taxes and pay an amount proportionate to the time they declare, under penalty of perjury that they spend in the Golden State.
Stone used an example of a property owner who spends four months out of the year in California and takes in $5 million in annual income, filed on a federal tax return. That person’s tax liability in California would be the equivalent of one-third of their earnings – $1.65 million.
“It just doesn’t seem right that hundreds of thousands of wealthy individuals spend multiple months of the year here in their million-dollar mansions and use our roads, visit our hospitals and utilize our infrastructure but don’t pay any income taxes here,” Stone said. “The SMART Act will give tax relief to millions of California working families and require people who own property here but say they don’t live here to start paying their fair share.”
According to figures published by the California Franchise Tax Board, more than 15 million residents with adjusted gross incomes of $200,000 or less filed income tax statements in 2015, the latest year for which data are available. Those whose earnings exceeded $200,000 on paper numbered just over a million.
SB-1352 is bound for a hearing in the Senate Appropriations Committee, though no date has been set.