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AB-877 Income taxes: credit: lodging for displaced persons. (2023-2024)

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Date Published: 04/20/2023 09:00 PM
AB877:v97#DOCUMENT

Amended  IN  Assembly  April 20, 2023
Amended  IN  Assembly  March 20, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 877

Introduced by Assembly Member Addis

February 14, 2023

An act to add and repeal Sections 17052.9 and 23605 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 877, as amended, Addis. Income taxes: credit: lodging for displaced persons.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill, for taxable years beginning on or after January 1, 2023, 2024, and before January 1, 2028, 2029, would allow a credit against those taxes to a taxpayer operating a hotel, motel, inn, bed and breakfast, or other similar transient lodging, as specified, in an amount equal to 50% of the nightly rate, as defined, of each room unit, as defined, that the taxpayer provides free of charge to displaced persons during a state of emergency declared by the Governor or President, times the number of nights displaced persons occupied the room, unit, not to exceed $2,000 per room and not to exceed $10,000 total per state of emergency declaration. The bill would require a qualified taxpayer claiming the credit to provide to the Franchise Tax Board, upon request, statements with specified information from all displaced persons who occupied a room unit in the qualified lodging free of charge.
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.
The bill would make specified findings detailing the goals, purposes, and objectives of the above-described tax credit, performance indicators for determining whether the credit meets those goals, purposes, and objectives, and data collection requirements.
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 17052.9 is added to the Revenue and Taxation Code, to read:

17052.9.
 (a) For each taxable year beginning on or after January 1, 2023, 2024, and before January 1, 2028, 2029, there shall be allowed a credit against the “net tax,” as defined in Section 17039, to a qualified taxpayer in an amount equal to 50 percent of qualified expenses incurred by the qualified taxpayer during the taxable year.
(b) For purposes of this section:
(1) (A) “Qualified expenses” means the rate of each room unit in qualified lodging provided free of charge to displaced persons during a state of emergency declared by the Governor or President, times the number of nights displaced persons occupied the room, unit, not to exceed two thousand dollars ($2,000) per room unit and not to exceed ten thousand dollars ($10,000) total per state of emergency declaration.
(B) “Qualified expenses” does not include meals or other amenities provided by the qualified taxpayer to displaced persons.
(2) (A) “Qualified lodging” means a hotel, motel, inn, bed and breakfast, or other similar transient lodging, that satisfies both of the following:
(i) Is located in a county for which a state of emergency has been declared by the Governor or President.
(ii) Has 50 or fewer rooms. units.
(B) “Qualified lodging” does not include property, lodging, emergency shelters, or other businesses owned or operated by a public agency.
(C) “Qualified lodging” does not include property, lodging, emergency shelters, or other businesses that are funded by the Project Roomkey and Rehousing Program, the HomeKey grant program, Federal Emergency Management Agency housing vouchers or temporary rental assistance, or other similar federal, state, or local public programs.
(3) “Qualified taxpayer” means a taxpayer operating qualified lodging in the state.
(4) “Rate” means the rate of the room unit that would have been charged to other persons at the time the room unit in the qualified lodging was provided free of charge to the displaced person.
(5) “Unit” means each rentable or bookable space within qualified lodging.
(c) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(d) 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.
(e) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.
(2) A qualified taxpayer claiming the credit under this section shall provide to the Franchise Tax Board, upon request, statements from all displaced persons who occupied a room unit in the qualified lodging free of charge (A) that the displaced person occupied a room unit in the qualified lodging free of charge and (B) noting the number of nights the displaced person occupied the room. unit.
(3) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board for the purpose of administering this section.
(f) For purposes of complying with Section 41, the Legislature finds and declares the following:
(1) The specific goal, purpose, and objective that the credit will achieve is to increase access to shelter for displaced persons during declared emergencies, including for natural disasters.
(2) Detailed performance indicators for the Legislature to use in determining whether the credit meets that goal, purpose, and objective are as follows:
(A) The cumulative number of displaced persons given shelter during a declaration of emergency.
(B) The number of qualified taxpayers that are allowed a credit under this section.
(3) The Franchise Tax Board, on or before January 1, 2027, 2028, shall review the effectiveness of the credit and post the review on their internet website. The review shall include, but not be limited to, an analysis of the demand for the credit and the economic impact of the credit.
(g) This section shall remain in effect only until December 1, 2028, 2029, and as of that date is repealed.

SEC. 2.

 Section 23605 is added to the Revenue and Taxation Code, to read:

23605.
 (a) For each taxable year beginning on or after January 1, 2023, 2024, and before January 1, 2028, 2029, there shall be allowed a credit against the “tax,” as defined in Section 23036, to a qualified taxpayer in an amount equal to 50 percent of qualified expenses incurred by the qualified taxpayer during the taxable year.
(b) For purposes of this section:
(1) (A) “Qualified expenses” means the rate of each room unit in qualified lodging provided free of charge to displaced persons during a state of emergency declared by the Governor or President, times the number of nights displaced persons occupied the room, unit not to exceed two thousand dollars ($2,000) per room unit and not to exceed ten thousand dollars ($10,000) total per state of emergency declaration.
(B) “Qualified expenses” does not include meals or other amenities provided by the qualified taxpayer to displaced persons.
(2) (A) “Qualified lodging” means a hotel, motel, inn, bed and breakfast, or other similar transient lodging, that satisfies both of the following:
(i) Is located in a county for which a state of emergency has been declared by the Governor or President.
(ii) Has 50 or fewer rooms. units.
(B) “Qualified lodging” does not include property, lodging, emergency shelters, or other businesses owned or operated by a public agency.
(C) “Qualified lodging” does not include property, lodging, emergency shelters, or other businesses that are funded by the Project Roomkey and Rehousing Program, the HomeKey grant program, Federal Emergency Management Agency housing vouchers or temporary rental assistance, or other similar federal, state, or local public programs.
(3) “Qualified taxpayer” means a taxpayer operating qualified lodging in the state.
(4) “Rate” means the rate of the room unit that would have been charged to other persons at the time the room unit in the qualified lodging was provided free of charge to the displaced person.
(5) “Unit” means each rentable or bookable space within qualified lodging.
(c) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(d) 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.
(e) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.
(2) A qualified taxpayer claiming the credit under this section shall provide to the Franchise Tax Board, upon request, statements from all displaced persons who occupied a room unit in the qualified lodging free of charge (A) that the displaced person occupied a room unit in the qualified lodging free of charge and (B) noting the number of nights the displaced person occupied the room. unit.
(3) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board for the purpose of administering this section.
(f) For purposes of complying with Section 41, the goal, purpose, objective, performance indicators, and data collection requirements for the credit allowed by this section shall be as specified in subdivision (f) of Section 17052.9.
(g) This section shall remain in effect only until December 1, 2028, 2029, and as of that date is repealed.

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.