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Assembly committee hears bill to exempt up to $20,000 of military retirement pay from state income tax
Summary
Lawmakers and veterans groups urged the Assembly Revenue and Taxation Committee to advance AB 53, which would exempt up to $20,000 of military retirement pay (including survivor benefits) from California personal income tax; the bill was referred to the committee's suspense file.
AB 53, introduced by Assemblymember Ramos, would exempt up to $20,000 of military retirement pay and survivor benefits under the Military Service Retirement and Surviving Spouse Benefits Payment Act from California personal income tax.
Supporters told the Assembly Revenue and Taxation Committee that the exemption would honor military service and help retain and attract veterans and skilled workers. "Currently, California is the only state that taxes the full amount of the retirement of our military personnel," said Assemblymember Ramos in his opening presentation. Retired U.S. Air Force Captain Ramona Chavez, president of the Military Officers Association of America California Council of Chapters, said California has lost veterans to other states and cited a decline in military retiree population in the state since February; she urged the committee to "make 2025 the year we change this." Chavez added that California is home to more than 140,000 military retirees and estimated average second‑career incomes of about $134,000, producing roughly $18 billion in taxable income statewide.
Josh Baker, president of the California Enlisted Association of the National Guard, described personal examples of retirees leaving California because other states offer tax advantages. Dozens of veterans organizations and county officials registered support for AB 53 at the hearing, including the American Legion of California, AMVETS, the California Association of County Veterans Service Officers, the National Guard Association of California and the California State Commanders Veterans Council.
Committee members on the dais voiced support during discussion. Vice Chair Ta and several members spoke in favor of the proposal; no witnesses registered opposition during the public testimony period. The committee chair noted that, pursuant to committee rules, all bills on the day's agenda would be referred to the suspense file; the bill was formally referred to the committee's suspense file for further consideration.
Why it matters: Supporters framed AB 53 as both an honorific measure and an economic tool to retain veterans and their skills in California. The author and witnesses said the potential state revenue loss would be outweighed by longer‑term economic activity from retained workers, but no fiscal vote or final budget decision was taken in committee. The bill will be considered further on the suspense calendar and in budget negotiations.
The committee referred AB 53 to the suspense file; no vote on final passage occurred at the hearing.
