SB 1277: Taxation: Personal Income Tax Law: cost-of-living refundable tax credit.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account.

This bill would allow, for each taxable year beginning on or after January 1, 2027, and before January 1, 2032, a cost-of-living credit against those taxes to a qualified taxpayer, as defined, in a qualified amount, calculated as provided based on the taxpayer’s filing and residence status. The bill would require the amount of the credit exceeding the taxpayer’s liability to be credited against other amounts due, if any, and would require the balance to be paid from the Tax Relief and Refund Account and refunded to the taxpayer. By increasing the payments from the Tax Relief and Refund Account, a continuously appropriated fund, the bill would make an appropriation.

The Personal Income Tax Law generally defines “gross income” as income from whatever source derived and provides various exclusions from gross income.

This bill would, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, provide an exclusion from gross income those amounts received as a refund under the above-described cost-of-living tax credit.

This bill would make legislative findings and declarations related to a gift of public funds and other related findings and declarations.

Sponsors

Sponsors by party (alphabetical): Republican 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. April 8, 2026April 8 set for first hearing. Failed passage in committee. (Ayes 1. Noes 4. Page 3795.) Reconsideration granted.
2. March 25, 2026Set for hearing April 8.
3. March 4, 2026Referred to Com. on REV. & TAX.
4. February 23, 2026Read first time.
5. February 23, 2026From printer. May be acted upon on or after March 23.
6. February 20, 2026Introduced. To Com. on RLS. for assignment. To print.