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<ns0:Id>20250AB__253399INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-20</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureNum>2533</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Tangipa</ns0:AuthorText>
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<ns0:Name>Tangipa</ns0:Name>
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<ns0:Title> An act to add Section 17151.1 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. </ns0:Title>
<ns0:RelatingClause>taxation, to take effect immediately, tax levy</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Personal Income Tax Law: exclusions: fitness benefit. </ns0:Subject>
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<html:p>The Personal Income Tax Law, in conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income. </html:p>
<html:p>This bill, for taxable years beginning on or after January 1, 2026, would exclude from gross income any qualified fitness benefit provided by an employer to an employee, as specified. The bill would define “qualified fitness benefit” to include, among other things, fees or dues for membership in a fitness center, health club, or gym, except as specified. </html:p>
<html:p>Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals the tax expenditure will achieve, detailed performance indicators, and data collection requirements.</html:p>
<html:p>This bill would include additional information required for any bill authorizing a new tax expenditure.</html:p>
<html:p>This bill would take effect immediately as a tax levy.</html:p>
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<ns0:ImmediateEffect>YES</ns0:ImmediateEffect>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
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Physical inactivity is a leading contributor to chronic disease and rising health care costs in the State of California.
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<html:p>
(b)
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Workplace wellness programs have proven effective in increasing employee productivity and reducing absenteeism.
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<html:p>
(c)
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Providing a tax incentive for employers to offer fitness benefits encourages a healthier workforce without imposing a mandate on businesses.
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<html:p>
(d)
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It is the intent of the Legislature to exclude employer-provided fitness and physical activity benefits
from an employee’s gross income for state personal income tax purposes.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 17151.1 is added to the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
, to read:
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<ns0:Num>17151.1.</ns0:Num>
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(a)
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For taxable years beginning on or after January 1, 2026, gross income does not include any “qualified fitness benefit” provided by an employer to an employee.
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<html:p>
(b)
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For purposes of this section, “qualified fitness benefit” means any of the following:
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(1)
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Fees or dues for membership in a fitness center, health club, or gym.
</html:p>
<html:p>
(2)
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Expenses for participation in fitness or physical activity programs, including yoga, pilates, or group exercise classes.
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<html:p>
(3)
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Subsidies or reimbursements for the purchase of wearable fitness tracking devices, provided such
devices are used as part of a formal employer-sponsored wellness program.
</html:p>
<html:p>
(c)
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The exclusion provided by this section shall not apply to either of the following:
</html:p>
<html:p>
(1)
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Memberships in any club where the primary purpose is social, athletic, or sporting, such as a country club or golf club.
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<html:p>
(2)
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Expenses for travel, meals, or lodging associated with fitness activities.
</html:p>
<html:p>
(d)
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The exclusion under this section shall apply regardless of whether the benefit is provided through a direct payment to a third party or as a reimbursement to the employee upon proof of payment.
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<html:p>
(e)
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For purposes of complying with Section 41 as it relates to the tax exclusion provided by this section, the Legislature finds and
declares the following:
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<html:p>
(1)
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The specific goal, purpose, and objective of the tax exclusion is to assist California residents in affording the cost of a “qualified fitness benefit” which can increase an employee’s tax liability if provided through an employer-sponsored wellness program. Workplace wellness programs have proven effective in increasing employee productivity, reducing absenteeism, and reducing chronic disease and rising health care costs in the state.
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<html:p>
(2)
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The performance indicators for the Legislature to use in determining whether the exclusion achieves the stated objective shall be the number of California taxpayers that receive the exclusion pursuant to this section.
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<html:p>
(3)
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(A)
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Notwithstanding Section 10231.5 of the Government Code, no later than June 30, 2029, and each June 30
thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax exclusion pursuant to this section for the most recent taxable year.
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<html:p>
(B)
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The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.
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<ns0:Num>SEC. 3.</ns0:Num>
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<html:p>This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.</html:p>
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