CA SB1377

Allows a tax deduction for attorney's fees and court costs included in gross income for taxpayers who prevail in consumer protection litigation, effective for taxable years beginning January 1, 2022 and later.

Defines "consumer protection violation" broadly to include violations of 18 specified federal and state consumer protection statutes, plus any other federal, state, or local law regulating consumer transactions, unfair trade practices, or credit practices.

Reduces any deduction otherwise allowed under Section 17201 for attorney's fees and court costs by the amount claimed under this new deduction to avoid double-counting.

Requires the Franchise Tax Board to report biennial performance data starting August 1, 2026, tracking the number of returns claiming the deduction and total amounts deducted to measure effectiveness.

Takes effect immediately as a tax levy under the California Constitution.