March 18, 2022 — Letter

Our organizations write to ask the Franchise Tax Board (FTB) to immediately suspend all income tax intercepts through July 31, 2022, for non-tax debts owed to state and local governments. The impacts of the COVID-19 public health emergency and resultant economic crises that led to the FTB suspending tax intercepts in 2020 and 2021 have not dissipated. This difficulty is particularly prevalent among Black and brown Californians and low-income households who are in most need of the Earned Income Tax Credit (EITC) and child tax credits that the state has expanded to address poverty and income inequality, but who also face disproportionate rates of tax intercepts. Tax intercepts are already causing increased harm this year as COVID protections for renters, utility consumers, and student loan borrowers are all set
to expire. At the same time, the state coffers are flush with cash, as budget surplus estimates
surpass tens of billions of dollars.