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AB-2945 Income and corporation taxes: credit: wages.(2017-2018)

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Date Published: 05/14/2018 09:00 PM
AB2945:v97#DOCUMENT

Amended  IN  Assembly  May 14, 2018
Amended  IN  Assembly  April 30, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2945


Introduced by Assembly Member Gallagher
(Coauthors: Assembly Members Baker, Frazier, Mathis, and Mullin)

February 16, 2018


An act to add Sections 17053.50 and 23650 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2945, as amended, Gallagher. Income and corporation taxes: credit: wages.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill, for each taxable year beginning on or after January 1, 2019, and before January 1, 2029, 2024, would allow a credit against the taxes imposed under both laws to a qualified employer in an amount equal to 35% of the qualified wages paid or incurred during the taxable year to a qualified employee, defined to mean an employee who has no functional hearing and has completed completed, or is completing completing, specified rehabilitative services. The bill would prohibit the credit from exceeding $2,100 per employee.
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 17053.50 is added to the Revenue and Taxation Code, to read:

17053.50.
 (a) For each taxable year beginning on or after January 1, 2019, and before January 1, 2029, 2024, there shall be allowed to a qualified employer as a credit against the “net tax,” as defined in Section 17039, an amount equal to 35 percent of the qualified wages paid or incurred by a qualified employer to a qualified employee during the taxable year, not to exceed two thousand one hundred dollars ($2,100) per qualified employee.
(b) For purposes of this section:
(1) “Qualified employee” means an employee who has no functional hearing and who has completed, or is completing, rehabilitative services provided by the Department of Rehabilitation, the Department of Veterans Affairs, or an employment network under the Ticket to Work Program.
(2) (A) “Qualified employer” means a taxpayer that is an employer that qualifies for a federal Work Opportunity Tax Credit, pursuant to Section 51 of the Internal Revenue Code, relating to amount of credit, as certified by the Employment Development Department.
(B) “Qualified employer” shall not include a sexually oriented business, as described in sub-subclause (ia) of subclause (II) of clause (v) of subparagraph (C) of paragraph (11) of subdivision (b) of Section 17053.73.
(3) “Qualified wages” means wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(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 taxable year, and succeeding seven years if necessary, until the credit is exhausted.
(d) A deduction otherwise allowed under this part for any amount paid or incurred by the qualified employer upon which the credit is based shall be reduced by the amount of the credit allowed by this section.
(e) If the qualified employer is allowed a credit pursuant to this section for qualified wages paid or incurred, no other credit shall be allowed to the qualified employer under this part with respect to any wage consisting in whole or in part of those qualified wages.
(f) Section 41 does not apply to the credit allowed by this section.
(g) The Employment Development Department shall annually provide to the Franchise Tax Board a list of qualified employers and qualified employees in the form and manner that is agreed upon by the Employment Development Department and the Franchise Tax Board.

SEC. 2.

 Section 23650 is added to the Revenue and Taxation Code, to read:

23650.
 (a) For each taxable year beginning on or after January 1, 2019, and before January 1, 2029, 2024, there shall be allowed to a qualified employer as a credit against the “tax,” as defined in Section 23036, an amount equal to 35 percent of the qualified wages paid or incurred by a qualified employer to a qualified employee during the taxable year, not to exceed two thousand one hundred dollars ($2,100) per qualified employee.
(b) For purposes of this section:
(1) “Qualified employee” means an employee who has no functional hearing and who has completed, or is completing, rehabilitative services provided by the Department of Rehabilitation, the Department of Veterans Affairs, or an employment network under the Ticket to Work Program.
(2) (A) “Qualified employer” means a taxpayer that is an employer that qualifies for a federal Work Opportunity Tax Credit, pursuant to Section 51 of the Internal Revenue Code, relating to amount of credit, as certified by the Employment Development Department.
(B) “Qualified employer” shall not include a sexually oriented business, as described in sub-subclause (ia) of subclause (II) of clause (v) of subparagraph (C) of paragraph (11) of subdivision (b) of Section 17053.73.
(3) “Qualified wages” means wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(c) In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following taxable year, and succeeding seven years if necessary, until the credit is exhausted.
(d) A deduction otherwise allowed under this part for any amount paid or incurred by the qualified employer upon which the credit is based shall be reduced by the amount of the credit allowed by this section.
(e) If the qualified employer is allowed a credit pursuant to this section for qualified wages paid or incurred, no other credit shall be allowed to the qualified employer under this part with respect to any wage consisting in whole or in part of those qualified wages.
(f) Section 41 does not apply to the credit allowed by this section.
(g) The Employment Development Department shall annually provide to the Franchise Tax Board a list of qualified employers and qualified employees in the form and manner that is agreed upon by the Employment Development Department and the Franchise Tax Board.

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.