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AB-831 Personal income and corporation taxes: credits: compliance.(2017-2018)

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Date Published: 04/25/2017 09:00 PM
AB831:v97#DOCUMENT

Amended  IN  Assembly  April 25, 2017
Amended  IN  Assembly  March 20, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 831


Introduced by Assembly Member Patterson
(Coauthors: Assembly Members Acosta, Baker, Chávez, Gallagher, Kiley, Lackey, Mathis, Mayes, Voepel, and Waldron)

February 16, 2017


An act to add Sections 17053.91 and 23686.1 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 831, as amended, Patterson. Personal income and corporation taxes: credits: compliance.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2017, for qualified small businesses, microbusinesses, as defined, for costs paid or incurred during the taxable year with regard to compliance with state laws and regulations in an amount equal to $25 for each person-hour spent on compliance with state regulations and laws, or $5,000, not to exceed $1,200, or $1,200, as provided.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17053.91 is added to the Revenue and Taxation Code, to read:

17053.91.
 (a) (1) For each taxable year beginning on or after January 1, 2017, there shall be allowed to a qualified small business microbusiness, as defined in Section 14837 of the Government Code, for costs paid or incurred during the taxable year with regard to compliance with state laws and regulations a credit against the “net tax,” as defined in Section 17039, in an amount as specified in paragraph (2).
(2) The credit allowed by this section shall either be five thousand dollars ($5,000) one thousand two hundred dollars ($1,200) or an amount equal to twenty-five dollars ($25) per each person-hour spent on compliance with state laws and regulations, as elected by the taxpayer. taxpayer, not to exceed one thousand two hundred dollars ($1,200).
(b) For purposes of this section:
(1)Compliance section, compliance with state laws and regulations means the adherence to laws, regulations, guidelines, and specifications relevant to the taxpayer’s business and includes, but is not limited to, preparation for, and the providing of, mandatory training for employees, modification of the business premises, and providing required information regarding employee safety.

(2)“Qualified small business” means a business that:

(A)Is independently owned and operated.

(B)Is not dominant in its field of operation.

(C)Has fewer than 100 employees.

(D)Averages annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three taxable years.

(c) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and the six succeeding years if necessary, until the credit is exhausted.
(d) Section 41 does not apply to the credit allowed by this section.

SEC. 2.

 Section 23686.1 is added to the Revenue and Taxation Code, to read:

23686.1.
 (a) (1) For each taxable year beginning on or after January 1, 2017, there shall be allowed to a qualified small business microbusiness, as defined in Section 14837 of the Government Code, for costs paid or incurred during the taxable year with regard to compliance with state laws and regulations a credit against the “tax,” as defined in Section 23036, in an amount as specified in paragraph (2).
(2) The credit allowed by this section shall either be five thousand dollars ($5,000) one thousand two hundred dollars ($1,200) or an amount equal to twenty-five dollars ($25) per each person-hour spent on compliance with state laws and regulations, as elected by the taxpayer. taxpayer, not to exceed one thousand two hundred dollars ($1,200).
(b) For purposes of this section:
(1)Compliance section, compliance with state laws and regulations means the adherence to laws, regulations, guidelines, and specifications relevant to the taxpayer’s business and includes, but is not limited to, preparation for, and the providing of, mandatory training for employees, modification of the business premises, and providing required information regarding employee safety.

(2)“Qualified small business” means a business that:

(A)Is independently owned and operated.

(B)Is not dominant in its field of operation.

(C)Has fewer than 100 employees.

(D)Averages annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three taxable years.

(c) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and the six succeeding years if necessary, until the credit is exhausted.
(d) Section 41 does not apply to the credit allowed by this section.

SEC. 3.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.