AB 39

This bill exempts from taxation the military income received by active duty

members of the U.S. armed forces and sunsets the armed forces member tax credit.

Under current law, military income received from the federal government by a

member of a reserve component of the U.S. armed forces who is called into specified

active federal service or special state service is exempt from state income taxes while

the member is on active duty. Under the bill, military income received from the

federal government by any individual who is on active duty in the U.S. armed forces

is exempt from state income taxes.

Current law allows an active duty member of the U.S. armed forces to claim a

tax credit of up to $300 of military income for services performed while stationed

outside the United States. The bill provides that no new claims may be made for the

credit for taxable years that begin after December 31, 2020.

Because this bill relates to an exemption from state or local taxes, it may be

referred to the Joint Survey Committee on Tax Exemptions for a report to be printed

as an appendix to the bill.