Assemblyman proposes bill exempting military retiree pay from state income tax

SAN DIEGO - An Orange County lawmaker announced that he has re-introduced a bill to exempt military retirement pay from state income tax collection, citing a study by the San Diego Military Advisory Council showing that California's military retiree population is decreasing.

"We want Pendleton Marines, San Diego sailors, Fort Irwin soldiers, and Edwards airmen to stay in California when they retire from their service,'' said Assemblyman Bill Brough, R-San Juan Capistrano. "Our tax laws steer veterans to other states. California is missing out on highly skilled leaders that can have second careers in our communities.''

Brough, a U.S. Army veteran who once served as the White House Liaison at the Department of Veterans Affairs in Washington, D.C., proposed a functionally identical bill a year ago. He expects AB 427, whose co-authors include San Diego area Assembly members Randy Voepel, R-Santee, and Marie Waldron, R-Escondido, as well as Sens. Pat Bates, R-Laguna Niguel, and Brian

Jones, R-San Diego, to get its first committee hearing next month.

Brough said a 2018 study by the SDMAC found that the state's military retiree population decreased 16.8 percent from 2000 to 2016 while the country's military retiree population increased by 16.5 percent over that same time span.

According to the SDMAC, 31 states currently offer full state income tax exemptions for military retiree pay.

"California is one of the few states that fully tax this pay and we are losing veterans because of it,'' Brough said. "Every year more and more states are exempting military retirement pay because they realize the benefits of retaining highly skilled professionals in their workforce.''