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AB-2359 Income taxes: credits: battery storage system units for solar power systems.(2019-2020)



Current Version: 03/12/20 - Amended Assembly

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AB2359:v98#DOCUMENT

Amended  IN  Assembly  March 12, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2359

Introduced by Assembly Member Mathis
(Coauthors: Assembly Members Choi, Voepel, and Waldron)

February 18, 2020

An act to add and repeal Sections 17053.35 and 23652 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2359, as amended, Mathis. Income taxes: credits: battery storage system units for solar power systems.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill, under both laws, for taxable years beginning on and after January 1, 2021, and before January 1, 2026, would allow a credit to a taxpayer, except as specified, that purchases a battery storage system unit for a solar energy system, as defined, in an amount equal to 50% of the costs paid or incurred by the taxpayer for that battery storage system, system unit, not to exceed $5,000 per taxable year, as specified. The bill would allow the credit for only one battery storage system unit per each separate legal parcel of property for which the filing taxpayer has legal ownership in the state. The bill would require the Franchise Tax Board to allow the credit to taxpayers filing for the same legal parcel of property on a first-come-first-served basis, determined by the date the taxpayer’s timely filed original tax return is received by the Franchise Tax Board, except as provided. The bill would provide that the board’s determination as to the date a return is received and whether a return has been timely filed for purposes of the credit is not reviewable in any administrative or judicial proceeding.

Under the Personal Income Tax Law, this bill would allow the credit for only one battery storage system per each separate legal parcel of property in the state. Under the Corporation Tax Law, this bill would allow the credit for only one battery storage system per each separate legal parcel of property owned by the taxpayer in the state.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would also include additional information required for any bill authorizing a new tax expenditure.
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 17053.35 is added to the Revenue and Taxation Code, to read:

17053.35.
 (a) (1) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, there shall be allowed to a taxpayer a credit against the “net tax,” as defined in Section 17039, in an amount equal to the costs paid or incurred during the taxable year for the purchase of a battery storage system unit for a solar energy system that is installed for use on property the taxpayer owns in this state, subject to paragraph (2).
(2) (A) The amount of the credit allowed by this section shall be in an amount that is equal to 50 percent of the costs paid or incurred for the purchase of the battery storage system unit but shall not exceed five thousand dollars ($5,000) per each separate legal parcel per taxable year.
(B) A credit may be allowed under this section with respect to only one battery storage system unit per each separate legal parcel of property property, for which the filing taxpayer has legal ownership, in the state.
(b) (1) For purposes of this section, “solar energy system” means a photovoltaic solar collector or other photovoltaic solar energy device that has a primary purpose of providing for the collection and distribution of solar energy for the generation of electricity.
(2) For purposes of this section, costs paid or incurred for the purchase of a battery storage system unit do not include costs for installation of the battery storage system. system unit.
(c) A credit shall not be allowed to any taxpayer engaged in those lines of business described in Sector 22 of the North American Industry Classification System (NAICS) Manual published by the United States Office of Management and Budget, 2017 edition.
(d) A deduction shall be allowed under this part for amounts taken into account in the calculation of the credit allowed by this section.
(e) (1) The Franchise Tax Board shall allow the credit to taxpayers filing for the same legal parcel of property on a first-come-first-served basis, determined by the date the taxpayer’s timely filed original tax return is received by the Franchise Tax Board. If the returns of two or more taxpayers are received on the same day, the Franchise Tax Board shall allow the credit equally between the taxpayers based on the purchase of the battery storage system with the least costs paid or incurred by the taxpayer. The total amount of the credit allocated to the taxpayers pursuant to this subdivision, however, shall not exceed five thousand dollars ($5,000) per taxable year.
(2) For purposes of this subdivision, the date a return is received shall be determined by the Franchise Tax Board. The determination of the Franchise Tax Board as to the date a return is received and whether a return has been timely filed for purposes of this subdivision may not be reviewed in any administrative or judicial proceeding.
(3) Any disallowance of a credit claimed due to the limitations specified in this subdivision shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that disallowance may be assessed by the Franchise Tax Board in the same manner as provided in Section 19051.
(f) 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.
(g) This section shall remain in effect only until December 1, 2026, and as of that date is repealed.

SEC. 2.

 Section 23652 is added to the Revenue and Taxation Code, to read:

23652.
 (a) (1) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, there shall be allowed to a taxpayer a credit against the “tax,” as defined in Section 23036, in an amount equal to the costs paid or incurred during the taxable year for the purchase of a battery storage system unit for a solar energy system that is installed for use on property the taxpayer owns in this state, subject to paragraph (2).
(2) (A) The amount of the credit allowed by this section shall be in an amount that is equal to 50 percent of the costs paid or incurred for the purchase of the battery storage system unit but shall not exceed five thousand dollars ($5,000) per each separate legal parcel per taxable year.
(B) A credit may be allowed under this section with respect to only one battery storage system unit per each separate legal parcel of property owned by the taxpayer property, for which the filing taxpayer has legal ownership, in the state.
(b) (1) For purposes of this section, “solar energy system” means a photovoltaic solar collector or other photovoltaic solar energy device that has a primary purpose of providing for the collection and distribution of solar energy for the generation of electricity.
(2) For purposes of this section, costs paid or incurred for the purchase of a battery storage system unit do not include costs for installation of the battery storage system. system unit.
(c) A credit shall not be allowed to any taxpayer engaged in those lines of business described in Sector 22 of the North American Industry Classification System (NAICS) Manual published by the United States Office of Management and Budget, 2017 edition.
(d) A deduction shall be allowed under this part for amounts taken into account in the calculation of the credit allowed by this section.
(e) (1) The Franchise Tax Board shall allow the credit to taxpayers filing for the same legal parcel of property on a first-come-first-served basis, determined by the date the taxpayer’s timely filed original tax return is received by the Franchise Tax Board. If the returns of two or more taxpayers are received on the same day, the Franchise Tax Board shall allow the credit equally between the taxpayers based on the purchase of the battery storage system with the least costs paid or incurred by the taxpayer. The total amount of the credit allocated to the taxpayers pursuant to this subdivision, however, shall not exceed five thousand dollars ($5,000) per taxable year.
(2) For purposes of this subdivision, the date a return is received shall be determined by the Franchise Tax Board. The determination of the Franchise Tax Board as to the date a return is received and whether a return has been timely filed for purposes of this subdivision may not be reviewed in any administrative or judicial proceeding.
(3) Any disallowance of a credit claimed due to the limitations specified in this subdivision shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that disallowance may be assessed by the Franchise Tax Board in the same manner as provided in Section 19051.
(f) 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 year.
(g) This section shall remain in effect only until December 1, 2026, and as of that date is repealed.

SEC. 3.

 For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to the tax credits allowed by Sections 17053.35 and 23652 of the Revenue and Taxation Code, as added by this act, hereafter “the credits,” the Legislature finds and declares all of the following:
(a) The specific goal, purpose, and objective of the credits is to encourage individuals to reduce their carbon footprint through the use of solar energy and related battery storage systems. system units.
(b) The effectiveness of the credits shall be measured by the number of taxpayers claiming the credits.
(c) The data collection requirements are as follows:
(1) The Legislative Analyst’s Office shall prepare and submit a report to the Legislature, on or before December 1, 2023, and December 1, 2025, and in compliance with Section 9795 of the Government Code, on the effectiveness of the credits. The report shall include information on the number of taxpayers claiming the credits and total amount of the credits provided. The Legislative Analyst may request information from the Franchise Tax Board for the purposes of this subdivision.
(2) Notwithstanding Section 19542 of the Revenue and Taxation Code, the Franchise Tax Board shall provide any data requested by the Legislative Analyst’s Office pursuant to this subdivision, as allowed pursuant to the Revenue and Taxation Code.

SEC. 4.

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