Assembly BillFailedRevenue and Taxation
AB 702: Personal income tax: exclusions: interest income: theft.
What AB 702 does, verified February 3, 2026
This bill provides an exclusion from gross income for interest income generated by a taxpayer during a taxable year, if the interest is stolen, sold, or otherwise transferred without the taxpayer's consent. The exclusion would apply to taxable years beginning on or after January 1, 2026. The bill takes effect immediately as a tax levy.
Bill journey
✓IntroducedComplete
2In CommitteeCurrent
3First Chamber FloorPending
4Second ChamberPending
5GovernorPending
6ChapteredPending
Last action: From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. (2026-02-02)Alert me
Author and sponsors
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| Feb. 02, 2026 | From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. |
| Jan. 31, 2026 | Died pursuant to Art. IV, Sec. 10(c) of the Constitution. |
| Apr. 21, 2025 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Mar. 24, 2025 | In committee: Hearing postponed by committee. |
| Mar. 03, 2025 | Referred to Com. on REV. & TAX. |
Latest bill textIntroduced version, February 14, 2025 · 353 words
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 702
| Introduced by Assembly Member Ta |
February 14, 2025 |
An act to add Section 17133.2 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 702, as introduced, Ta. Personal income tax: exclusions: interest income: theft.
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. Existing law, in modified conformity with federal income tax law, allows a deduction for specified investment interest, not to exceed the net investment income of the taxpayer for the taxable year, as provided.
This bill, for taxable years beginning on or after January 1, 2026, would provide an exclusion from gross income for any amount of interest income that a taxpayer generates on an investment during the taxable year and, without the qualified taxpayer’s consent and against the qualified taxpayer’s will, is stolen, sold, or otherwise transferred, as specified.
This bill would take effect immediately as a tax levy.
The people of the State of California do enact as follows:
SECTION 1.
Section 17133.2 is added to the Revenue and Taxation Code, to read:17133.2.
(a) For taxable years beginning on or after January 1, 2026, gross income shall not include any amount of qualified investment interest income generated by a taxpayer.(b) For purposes of this section, “qualified investment interest” means interest income that a taxpayer generates on an investment during the taxable year and, without the qualified taxpayer’s consent and against the qualified taxpayer’s will, is stolen, sold, or otherwise transferred during the taxable year so that the interest income is no longer under the possession or control of the taxpayer.
(c) A deduction shall not be allowed with respect to any amount that a taxpayer excludes from income pursuant to this section.
SEC. 2.
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.Text of AB 702 as introduced, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions