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<ns0:Description>
<ns0:Id>20250SB__066598AMD</ns0:Id>
<ns0:VersionNum>98</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-20</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2025-05-07</ns0:ActionDate>
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<ns0:LegislativeInfo>
<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>SB</ns0:MeasureType>
<ns0:MeasureNum>665</ns0:MeasureNum>
<ns0:MeasureState>AMD</ns0:MeasureState>
</ns0:LegislativeInfo>
<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Choi</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthors: Senators Alvarado-Gil and Ochoa Bogh)</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_OPPOSITE">(Coauthors: Assembly Members Alanis and Wallis)</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Choi</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Alvarado-Gil</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Ochoa Bogh</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Alanis</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Wallis</ns0:Name>
</ns0:Legislator>
</ns0:Authors>
<ns0:Title>An act to add and repeal Sections 17053.89 and 23683 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. </ns0:Title>
<ns0:RelatingClause>taxation, to take effect immediately, tax levy</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Personal Income Tax Law: Corporation Tax Law: credits: retail security measures.</ns0:Subject>
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<ns0:DigestText>
<html:p>The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.</html:p>
<html:p>This bill, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, would allow a credit against those taxes to a qualified taxpayer, as defined, for retail theft prevention measures, as specified. The bill would limit the credit allowed to a taxpayer to no more than $10,000 per taxable year.</html:p>
<html:p>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.</html:p>
<html:p>This bill also would include additional information required for any bill
authorizing a new tax expenditure.</html:p>
<html:p>This bill would take effect immediately as a tax levy.</html:p>
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<ns0:DigestKey>
<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
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<ns0:MeasureIndicators>
<ns0:ImmediateEffect>YES</ns0:ImmediateEffect>
<ns0:ImmediateEffectFlags>
<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>YES</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
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<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_2DD37850-E6F6-4FC8-9FE7-0D21E3EF3361">
<ns0:Num>SECTION 1.</ns0:Num>
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Section 17053.89 is added to the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
, to read:
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<ns0:Fragment>
<ns0:LawSection id="id_B2F25622-D2F5-4E0C-A66D-40DF62FD1625">
<ns0:Num>17053.89.</ns0:Num>
<ns0:LawSectionVersion id="id_542B3F6C-CF66-4392-B5E4-BADEAA16D2BD">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
For taxable years beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed as a credit against the “net tax,” as that term is defined in Section 17039, an amount equal to the qualified expenditures of a qualified taxpayer during the taxable year, not to exceed ten thousand dollars ($10,000).
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions shall apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Annual full-time equivalent employee” mean either of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
In the case
of a full-time employee paid hourly wages, “annual full-time equivalent” means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
In the case of a salaried full-time employee, “annual full-time equivalent” means the total number of weeks worked for the qualified taxpayer by the employee divided by 52.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Qualified expenditure” shall mean an expense paid or incurred by the qualified taxpayer that is directly related to retail theft prevention measures that exceed
the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
In the case of a
qualified taxpayer with 25 or fewer annual full-time equivalent employees, three hundred dollars ($300) at a retail location in the state.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
In the case of a qualified taxpayer with more than 25 annual full-time equivalent
employees, five hundred dollars ($500) at a retail location in the state.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Qualified taxpayer” shall mean a taxpayer that is primarily engaged in a retail trade, as described in Codes 441 to 459999, inclusive, of the North American Industry Classification System published by the United States Office of Management and Budget, 2022 edition.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Retail theft prevention measures” shall include, but not be limited to, the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Security cameras.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Perimeter security lighting.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Locking or hardening mechanisms.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Alarm systems.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Access control systems.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Exterior license plate reader technology.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
If any credit allowed by this section is claimed by the taxpayer, any deduction otherwise allowed under this part for that amount of the cost paid or incurred by the taxpayer which is eligible for the credit that is claimed shall be reduced by the amount of the credit allowed.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. 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 rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For purposes of complying with Section 41 as it pertains to the credit allowed pursuant to this section and Section 23683, the Legislature finds and declares the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The specific goal of the credit is to
support local retailers in their efforts to prevent theft.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The performance indicators for the Legislature to use in determining whether the credit achieves the stated goal shall be the number of taxpayers claiming the credit, and the total dollar amount of credits allowed.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
No later than April 1, 2028, and annually thereafter, the Franchise Tax Board shall submit a report to the
Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers claiming the credit, and the total dollar amount of credits allowed.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
This section shall remain operative only until December 1, 2030, and as of
that date is repealed.
</html:p>
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</ns0:BillSection>
<ns0:BillSection id="id_8D911C96-B107-4A8C-B496-5F49DF586322">
<ns0:Num>SEC. 2.</ns0:Num>
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Section 23683 is added to the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
, to read:
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<ns0:Fragment>
<ns0:LawSection id="id_0F2E0E45-824A-4BE3-B8DC-D0A0865F86A8">
<ns0:Num>23683.</ns0:Num>
<ns0:LawSectionVersion id="id_5E72F86C-88B4-40B7-A4B7-C7D2E928D0CF">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
For taxable years beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed as a credit against the “tax,” as that term is defined in Section 23036, an amount equal to the qualified expenditures of a qualified taxpayer during the taxable year, not to exceed ten thousand dollars ($10,000).
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions shall apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Annual full-time equivalent employee” mean either of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
In the case
of a full-time employee paid hourly wages, “annual full-time equivalent” means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
In the case of a salaried full-time employee, “annual full-time equivalent” means the total number of weeks worked for the qualified taxpayer by the employee divided by 52.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Qualified expenditure” shall mean an expense paid or incurred by the qualified taxpayer that is directly related to retail theft prevention measures
that exceed the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
In the case of a qualified taxpayer with 25 or fewer annual full-time equivalent
employees, three hundred dollars ($300) at a retail location in the state.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
In the case of a qualified taxpayer with more than annual full-time equivalent 25 employees, five hundred dollars ($500) at a retail location in the state.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Qualified taxpayer” shall mean a taxpayer that is primarily engaged in a retail trade, as
described in Codes 441 to 459999, inclusive, of the North American Industry Classification System published by the United States Office of Management and Budget, 2022 edition.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Retail theft prevention measures” shall include, but not be limited to, the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Security cameras.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Perimeter security lighting.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Locking or hardening mechanisms.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Alarm systems.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Access control systems.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Exterior license plate reader technology.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
If any credit allowed by this section is claimed by the taxpayer, any deduction otherwise allowed under this part for that amount of the cost paid or incurred by the taxpayer which is eligible for the credit that is claimed shall be reduced by the amount of the credit allowed.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. 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 rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this
section.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
This section shall remain operative only until December 1, 2030, and as of that date is repealed.
</html:p>
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<ns0:BillSection id="id_F382B4E4-EFBD-4D8F-B3C9-F56ABCAFD8E1">
<ns0:Num>SEC. 3.</ns0:Num>
<ns0:Content>
<html:p>This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.</html:p>
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