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AB-535 Personal income taxes: credit: professional license fees.(2019-2020)

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Date Published: 01/15/2020 09:00 PM
AB535:v96#DOCUMENT

Amended  IN  Assembly  January 15, 2020
Amended  IN  Assembly  April 08, 2019
Amended  IN  Assembly  March 21, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 535

Introduced by Assembly Member Brough

February 13, 2019

An act to add and repeal Section 17056.1 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 535, as amended, Brough. Personal income taxes: credit: professional license fees.
The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law requires any bill authorizing a new tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2020, 2021, and before January 1, 2025, 2026, in an amount equal to 50% of the cost paid or incurred during the taxable year for an initial professional license fee. The bill also would include additional information required for any bill authorizing a new income tax credit.
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 17056.1 is added to the Revenue and Taxation Code, to read:

17056.1.
 (a) For taxable years beginning on or after January 1, 2020, 2021, and before January 1, 2025, 2026, there shall be allowed a credit against the “net tax,” as defined by Section 17039, an amount equal to 50 percent of the costs paid or incurred by a taxpayer for an initial qualified professional license fee.
(b) (1) For purposes of this section, “qualified professional license” means any license issued by the Department of Real Estate, Board of Registered Nursing, Board of Behavioral Sciences, Contractors’ State License Board, or the Board of Psychology.
(2) For purposes of this section, “license” has the same definition as in Section 23.7 of the Business and Professions Code.
(c) This credit shall be in lieu of any other deduction that the taxpayer may otherwise claim pursuant to this part with respect to the costs paid or incurred by a taxpayer for an initial professional license fee.
(d) In the case where the credit allowed under this section exceeds the “net tax,” the excess credit may be carried over to reduce the “net tax” in the following taxable year and succeeding five taxable years, if necessary, until the credit has been exhausted.
(e) This section shall remain in effect only until December 1, 2025, 2026, and as of that date is repealed.

SEC. 2.

 For purposes of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares all of the following with respect to Section 17056.1 of the Revenue and Taxation Code, as added by this act: act, hereafter “the credit”:
(a) The specific goals, purposes, and objectives that Section 17056.1 of the Revenue and Taxation Code the credit will achieve are:
(1) Reducing the burden of entering into a licensed profession.
(2) Increasing the number of mental healthcare health care professionals in California.
(3) Supporting California’s effort to build affordable housing by increasing jobs in the housing market.
(b) Detailed performance indicators for the Legislature to use in determining whether Section 17056.1 of the Revenue and Taxation Code the credit meets the goals, purposes, and objectives listed in subdivision (a) are:
(1) The number of people being allowed the credit.
(2) The number of licenses provided by the Department of Real Estate, Board of Registered Nursing, Board of Behavioral Sciences, Contractors’ State License Board, and the Board of Psychology.
(c) The Legislative Analyst’s Office shall, on an annual basis beginning January 1, 2021, 2022, and each January 1 thereafter until Section 17056.1 of the Revenue and Taxation Code the credit is repealed, collaborate with the Franchise Tax Board to review the effectiveness of the tax credit allowed by Section 17056.1 of the Revenue and Taxation Code. the credit. The review shall include, but is not limited to, an analysis of the demand for the tax credit and the economic impact of the tax credit.
(d) The data collection requirements for determining whether Section 17056.1 of the Revenue and Taxation Code the credit is meeting, failing to meet, or exceeding the specific goals, purposes, and objectives listed in subdivision (a) are:
(1) To assist the Legislature in determining whether Section 17056.1 of the Revenue and Taxation Code the credit meets the specific goals, purposes, and objectives listed in subdivision (a), and in order to carry out its duties pursuant to subdivision (c), the Legislative Analyst’s Office may request information from the Franchise Tax Board.
(2) (A) The Franchise Tax Board shall provide any data requested by the Legislative Analyst’s Office pursuant to this subdivision.
(B) The disclosure provisions of this paragraph shall be treated as an exception to Section 19542 under Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2 of Division 2 of the Revenue and Taxation Code.

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.