Valley residents and business owners on Monday presented testimony at a state Assembly committee hearing in support of a state bill that would provide tax relief to earthquake victims.
If passed, the bill will allow quake victims to deduct the full amount of their losses, minus $100, when filing taxes. Current law permits survivors to deduct only quake losses that exceed 10% of a household's adjusted gross income, less $100.
For example, a household with a $35,000 adjusted gross income would not be able to deduct the first $3,600 in property destroyed or damaged in the earthquake. The legislation would allow the same household to deduct $3,500 of the $3,600 earthquake loss.
In his testimony to the Assembly Revenue and Taxation Committee, state Sen. Herschel Rosenthal (D-Los Angeles), the bill's author, said that state tax law provides more incentives for people to move than it does for them to rebuild from the quake, according to Rosenthal aide Dan Flynn. The law allows a 100% deduction for moving expenses.
"We're really optimistic" about the chances for the bill's passage, Flynn said. "We think the Legislature will recognize the need for the bill and will also be able to offset any cost associated with this bill by other changes in the tax code."
The committee will vote on the bill Monday. If it is successful, it will be sent to the Assembly Ways and Means Committee and the full Assembly before being sent to the Senate.
Before flying to Sacramento to present his bill, SB 561, Rosenthal unveiled the proposal Monday to residents at a press conference in Sherman Oaks, one of the communities hit hardest by the temblor.
Rosenthal was joined by City Councilman Hal Bernson, community leaders Richard Close and Gerald Silver and business leader Wayne Adelstein at the event, which took place in front of a crumbled condominium complex at 4637 Willis Ave.