CSEA’s First Bill Review of the 2021 Legislative Session

Every year following the February deadline for legislators to submit new bills, CSEA staff and our Legislative Advocate, Jennifer Tannehill, review the priority bill list prepared for us by Aaron Read & Associates. We then make recommendations to the Legislative Affairs Committee regarding CSEA’s positions.
The analysis process involves talking through the implications of each bill and weighing them against our legislative position statements to see if we will take an oppose, support, or watch position. CSEA staff performs this initial comb through of the bill list so that Legislative Affairs Committee members do not have to read through all of the bills during the busy tax season, and instead only have to weigh in on the more technical bills.
Below are summaries of bills that the Legislative Affairs Committee is currently reviewing before establishing a position:
SB 104 (McGuire) - Elective tax: limited partnership: limited liability company: “S” corporation: exclusion. CSEA Position: TBD
This bill would, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, authorize specified limited partnerships, limited liability partnerships, limited liability companies, and “S” corporations to elect to pay an annual elective tax at a rate based on its net income for the preceding taxable year. According to the author, SB 104 would reverse the state and local tax limits advanced by the Trump Administration under TCJA 2018. SB 104 would allow many small businesses to deduct the value of their state and local taxes from their federal taxes. Additionally, this bill would allow families and individual taxpayers to deduct more from their personal taxes, as they were able to do before TCJA 2018.
SB 792 (Glazer) - Sales and use tax: retailers: reporting. CSEA Position: TBD
This bill would require a retailer, whose annual sales of tangible personal property transacted online exceeded $1,000,000 for the previous calendar year, to track and report to CDTFA the city or ZIP code where the purchaser resides for each sale within the state that is transacted online. According to the author, since brick-and-mortar retailers are required to allocate tax revenue based on the point-of-sale, this bill would prevent online retailers from allocating revenue to warehouses, distribution centers, or sales offices of their choice instead of the final destination of a package.
Important Spot Bill
Spot bills are introduced prior to the deadline and with no substantive changes, but with the intention of being amended by the author later in the year.
AB 80 (Burke) - Taxation: Coronavirus Aid, Relief, and Economic Security Act: Federal Consolidated Appropriations Act, 2021. CSEA Position: Watch
AB 80 is widely expected to be the bill the Legislature uses to bring California into partial conformity with federal rules regarding PPP loans and business expense deductions. Negotiations are currently being conducted between legislators over the amount of expenses that business should be able to deduct. While negotiations started at allowing $150,000 in deductions, it is likely that the amount will be larger.
CSEA will continue to monitor these bills and will keep our Members apprised of any further changes. If you have any comments regarding a bill or CSEA’s position, please email your concerns to bpedersen@csea.org.