Tax Season Tribune

April 15 is around the corner. You’ve all worked really hard and have earned a break.

For me, this is the time of year where I begin to scour the hundreds of California bills that have been introduced during this legislative session. By the end of April, all fiscal bills must be heard by the fiscal committee in their house of origin, so it gives us a sense of what may be coming.

There are a variety of tax-related bills that have been introduced this year that will likely get a lot of media attention, even if they don’t actually get enacted. And who is to say whether they will or not … at this stage it is way too early to tell. Although if I were a betting gal, I’m thinking that given the condition of the state budget, the increased demands that are going to be put on the state due to federal cutbacks, and the likely presidential campaign of a prominent California political figure, there will likely not be a lot of big tax bills that are enacted this year.

But be that as it may, we are watching the hundreds of tax and related bills that have been introduced, including bills that if enacted would:

• Repeal California’s water’s-edge election for unitary multinational businesses (AB 1790);
• Require rounding up of cash sales to the nearest nickel (in response to the federal government’s decision to stop minting pennies) (AB 1793);
• Provide conformity to several of the TCJA and OBBBA provisions such as qualified tips, overtime, and §529 rollovers to Roth IRAs (AB 2336, AB 2444, SB 984);
• Specifically state that the CalSavers mandate applies to household employers (AB 2607). But wait, why has CalSavers been saying that household employers are covered if a law is necessary to clarify this? and
• Suspend the motor vehicle tax for one year. (AB 2722)

Naturally, while most bills have to have been introduced already if they are to be enacted this year, this doesn’t apply to budget-related bills or tax bills, so who knows what else might be put up for consideration before the end of the legislative session.

Of course, I have my eye on some non-tax related bills that I think are quite interesting as well. These include bills that if enacted would:

• Prohibit businesses from sending text advertising between 9 p.m. and 9 a.m. (hell yes!!!) (AB 1865);
• Repeal daylight savings time … again!!! (SB 1197);
• Require legislative members to take a course on the U.S. and California Constitution … I mean, you do have to take a test to get a driver’s license (SB 1308);
• Declare May 17 as Bruce Lee Day (❤️) (AB 2455); and
• Create state surfing reserves (AB 1938) … after all, we have to support California’s official sport: surfing.

So, while I hope you will be going off for some well-deserved R&R after next Wednesday, know that we at Spidell will be staying on top of all the latest developments to fill you in on when you come back all refreshed and raring to go.

Starting in June 2026, the 23rd FIFA World Cup will be jointly hosted by the United States, Mexico, and Canada. This will be Mexico’s third time hosting, the United States’ second, and Canada’s first time.¹

Ticket sales opened in April, and ticket prices were immediately in the news when it was revealed that FIFA was asking for up to $10,990 per ticket.² On the official ticket resale platform, a seller was asking $82,780 for one ticket.

However, ticket sales are just the beginning; fans will also shell out for travel and lodging, food and beverage, and team merch. Plus, there’s marketing and sponsorship revenue to be earned, to say nothing of the jobs that are created by hosting such a huge event. According to a FIFA socioeconomic impact analysis,³ the 2026 World Cup will bring 6.5 million fans to the games for an overall $30.5 billion economic impact (in the U.S. alone), at a cost of “just” $11.1 billion.

Net income

This is where things get Messi. The IRS recently released a reminder that foreign athletes are generally subject to tax on their U.S.-source earnings connected with activities performed in the United States at a withholding rate of 30%.⁴

There is an exemption if the athlete is present in the U.S. for no more than 90 days in the taxable year, compensation does not exceed $3,000 (yeah, right), and services are performed for a foreign employer not engaged in a U.S. trade or business.⁵ A tax treaty may also reduce or eliminate U.S. withholding.

The IRS also has a Central Withholding Agreement (CWA) program that can help reduce withholding for foreign athletes who plan to work in the U.S.⁶ A CWA provides for the correct amount of withholding based upon net income and can result in tax savings.

Should we tax the athletes who travel here for a world event that brings nations together to enjoy a common pastime? Don’t we ask the same thing about Olympians and their medals? I’m not in charge, so it’s not up to me. My one true hope is that Ricky Martin writes another megahit World Cup song. ¡Alé, alé, alé!