Archive for California Taxes

California Wants To Reveal Taxpayers Income To Utility Company To Raise Their Tax Rates

California Wants To Reveal Your Income To Your Utility Company To Raise Your Rates
California wants to impose a new “charge” on your utility bill that you have to pay regardless of whether you use any energy that month and the rate will now be based on your income. Reform California opposes the charge and calls it an illegal tax and a violation of privacy. If you make over $180,000 annually you must pay an additional utility fee of $128 per month or $1536 per year more on your utility fees. While those making under $28,000 annually will pay an extra utility fee of $24 per month or $288 annually.

Californians are still suffering under some of the highest utility rates in the country, and many can barely afford to pay their bills.

Now California Democrat politicians want to impose a new “flat fee” on all utility bills based on each household’s income for the year. That means many residents will pay a charge of $128 per month – while low income and other “favored” groups pay just $24 for the SAME SERVICE.

Opponents say California Democrats are just playing class warfare and the “fee” is really an illegal tax on most Californians to subsidize the bills of lower-income residents.

The fixed rates are required under Assembly Bill 205 (AB 205), which was signed by Governor Gavin Newsom (D) in 2022. The bill states that “the commission may authorize fixed charges [for utilities] … The fixed charge shall be established on an income-graduated basis.”

The specific rates in this “flat fee” scheme is now being voted on by the California Public Utilities Commission (CPUC). The proposal would charge customers of Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric fixed rates based on income. For San Diego Gas & Electric customers, the rates would be as follows:

  • Income of under $28,000: $24/month
  • Income of $28,000-69,000: $34/month
  • Income of $69,000-180,000: $73/month
  • Income of over $180,000: $128/month

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Written by | Posted in California Taxes • California Utility Taxes • Tax Increases • TaxConnections

Special Report: California Court Of Appeal On Sales And Use Tax On Cell Phone Sales

Special Report: California Court Of Appeal On Sales And Use Tax On Cell Phone Sales

In a recent court case, the California Court of Appeal for the Third Appellate District ruled that purchasing “discounted” cell phones bundled with wireless services requires paying sales tax based on the cell phone’s full price.

The case in question, Bekkerman-v-CDTFA, was initiated by consumers who purchased discounted cell phones bundled with wireless services yet were charged tax on the full price of the phones. The consumers argued that the discounted price of the phones should have been used to calculate the sales tax owed.

During the hearing, the court specifically analyzed Regulation 1585. The regulation defines a “bundled transaction” as the retail sale of a wireless telecommunication device that contractually requires the retailer’s customer to activate or contract with a wireless telecommunications service for periods greater than one month as a condition of that sale.

Based upon this definition, the court sided with the CDTFA, holding that the phone’s full price should be used when calculating the sales tax owed. The court reasoned that retailers were effectively selling the phones at a discount to induce consumers to purchase wireless service and that the full price of the phones was, therefore, part of the consideration for the purchase of the wireless service.

This ruling was a significant win for the State and has important implications for California retailers. Retailers must be mindful of the taxation requirements of bundled sales, whether involving cell phones or any other type of products and services, and should seek guidance from a tax professional to ensure compliance with state and local tax laws.

Thompson Tax specializes in sales and use tax across many industries. Contact us today for all of your multistate and local sales and use tax needs. We are your Trusted Tax Advisor.

Have a sales and use tax question? Contact Nicole Brown.

Written by | Posted in California Taxes • Sales And Use Tax Manufacturing Exemption

What Tax Credits Are Available For A Taxpayer In California?

CALIFORNIA TAX CREDITS

According to a recent article attributed to Nerd Wallet, tax credits available to an individual taxpayer include:

California State Tax Credits

Tax credits are a type of benefit that decreases your taxes owed by the credit amount. Some credits may also be refundable, meaning if the credit amount exceeds how much you owe in taxes, you might be able to get the overage back in the form of a refund.

Here is an overview of a few popular tax credits available in California for the 2023 tax year (taxes filed in 2024).

California Earned Income Tax Credit (CalEITC)

The CalEITC is a tax benefit that mirrors the federal earned income tax credit. Californians with earned income and federal AGI of up to $30,950 in 2023 may be eligible for a tax credit of up to $3, The exact credit amount depends on your filing status and the number of qualifying children. (People without kids also qualify.)

California Young Child Tax Credit (YCTC)

The refundable young child tax credit is another state-level tax credit modeled after the federal version of the child tax credit. People who qualify for the California earned income tax credit mentioned above and who also had a child younger than 6 by the end of the 2023 tax year are generally eligible for the YCTC. The maximum credit for 2023 is $1,117. The credit begins to phase out for those with an earned income of $25,775 and above and is not available for anyone making above $30,931.

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Written by | Posted in California Tax Credits And Incentives • California Taxes • Tax Credits • TaxConnections

Living In California Imposes a $26,478.72 “Cost-of-Living Penalty” On Typical Middle-Class Family

CARL DEMAIO
A bombshell report from the Transparency Foundation calculates the total higher costs paid by Californians versus national averages – and lays the blame for higher costs on California politicians for costly mandates and negligent policies.

Everyone knows living in California is more expensive than in other states – but a new report out makes a staggering total calculation of all the added costs and blames state politicians for imposing “unreasonable and completely unnecessary cost-of-living-penalty.”

“This report should be a wake up call to all Californians that they are being unfairly punished by the bad policies imposed on them by their politicians – and they are literally paying the price for it,” says Carl DeMaio, Chairman of the Transparency Foundation – the non-profit, non-partisan group that published the study.

The Transparency Foundation’s Cost of California Report compares costs in every major household budget category between California and national averages – including for housing, utilities, food, gas, transportation, healthcare, insurance, childcare, and taxes.

“In every household budget category, the cost of living in California is exponentially higher than the national average – and costly mandates and bad policies are to blame,” says DeMaio.

Outside of the analysis of each category of living costs is a calculation made by the foundation to illustrate the effects of California’s high cost of living on a typical middle-class family.

The study shows that a typical middle-class family of three earning $130,000 a year faces a shocking “Cost of California” penalty of $26,478.72 versus if they simply paid the national average of cost in each category.

What’s worse, the typical middle-class family examined by the report ends up running an annual deficit of $23,710.20 versus being able to run an annual surplus of $2,768.52 if their costs were simply benchmarked to the national average in each category.

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Written by | Posted in California Taxes