AB 150

Bill Subjects

Abstract

(1) (A) Existing sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law provides various exemptions from those taxes, including, until July 1, 2023, an exemption for the sale of, or the storage, use, or other consumption of, diapers for infants, toddlers, and children and menstrual hygiene products, as defined. In compliance with a state constitutional requirement, existing law requires the Department of Finance, beginning on May 15, 2020, to estimate the total dollar amount of revenue that would have been credited to the Local Revenue Fund 2011 for a fiscal year if not otherwise exempted under the sales and use tax exemptions for diapers for infants, toddlers, and children and menstrual hygiene products and requires the Controller to transfer that amount from the General Fund to the Local Revenue Fund 2011, a continuously appropriated fund, no later than June 30 of each fiscal year. This bill would indefinitely extend the sales and use tax exemptions for the sale of, or the storage, use, or other consumption of, diapers for infants, toddlers, and children and menstrual hygiene products. By extending the above-described transfers of estimated total dollar amount of revenues that would have been credited to the Local Revenue Fund 2011 by the Controller from the General Fund to the Local Revenue Fund 2011, a continuously appropriated fund, the bill would make an appropriation. The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws. Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions. This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made for purposes of that section, and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill as required by that section. (B) Existing law requires the Legislative Analyst's Office, on or before July 1, 2022, to submit specified reports to the Assembly Committee on Revenue and Taxation and to the Senate Governance and Finance Committee relating to the effectiveness of the sales and use tax exemptions for diapers for infants, toddlers, and children and menstrual hygiene products. This bill would repeal the requirement to submit those reports. (2) The Personal Income Tax Law and the Corporation Tax Law authorize a credit against the personal income and corporate income taxes for each taxable year beginning on or after January 1, 2020, and before January 1, 2021, to a qualified small business employer that receives a tentative credit reservation, in an amount equal to $1,000 for each net increase in qualified employees, not to exceed $100,000 for any qualified small business employer. Existing law authorizes a qualified small business employer that received a tentative credit reservation to irrevocably elect to apply the credit against qualified sales and use taxes imposed on the qualified small business employer in reporting periods commencing on January 1, 2021, and until April 30, 2026, as specified. Existing law requires a qualified small business employer to submit an application to the California Department of Tax and Fee Administration for a tentative credit reservation under these provisions that includes, among other things, whether the qualified small business employer is making the irrevocable election and requires the department to allocate the credit reservations on a first-come-first-served basis not to cumulatively exceed $100,000,000. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would authorize a credit against the personal income and corporate income taxes for each taxable year beginning on or after January 1, 2021, and before January 1, 2022, to a qualified small business employer that receives a tentative credit reservation, in an amount equal to $1,000 for each net increase in qualified employees, not to exceed $150,000 for any qualified small business employer. The bill would authorize a qualified small business employer that received a tentative credit reservation to irrevocably elect to apply the credit against qualified sales and use taxes imposed on the qualified small business employer in reporting periods commencing on January 1, 2022, and until April 30, 2027, as specified. The bill would require a qualified small business employer to submit an application to the California Department of Tax and Fee Administration for a tentative credit reservation under these provisions that includes, among other things, whether the qualified small business employer is making the irrevocable election. The bill would require the department to allocate the credit reservations on a first-come-first-served basis not to cumulatively exceed the amount equal to $70,000,000 plus any unallocated and available amount remaining from the existing credit described above. This bill would allow a credit under the Personal Income Tax Law and the Corporation Tax Law for each taxable year beginning on or after January 1, 2022, and before January 1, 2027, to a qualified taxpayer that employs an eligible individual during the taxable year, in an amount between $2,500 and $10,000 per eligible individual, not to exceed $30,000 per taxpayer per taxable year, depending on the amount of hours worked by the eligible individual, and subject to specified conditions and limitations. The bill would define various terms for purposes of the credit, including defining "eligible individual" as a person who is homeless and meets other specified requirements. The bill would require the qualified taxpayer to request a credit reservation from the Franchise Tax Board, as provided, to be eligible for the credit with respect to an eligible individual. The bill would limit the total aggregate amount of the credit that may be allocated by credit reservations per calendar year to all qualified taxpayers under both the Personal Income Tax Law and the Corporation Tax Law to $30,000,000, plus the unallocated credit amount, if any, from the preceding calendar year. The bill would require a continuum of care, as defined, or a community-based service provider that is connected to a specified local information system, to issue certifications to eligible individuals and eligible employers, so that they may be eligible for the credit. By increasing the duties of local continuum of care, the bill would impose a state-mandated local program. This bill would also include additional information with respect to the credits described above required for any bill authorizing a new tax expenditure. (3) The Personal Income Tax Law and the Corporation Tax Law allow a credit against the taxes imposed by those laws, for taxable years beginning on or after January 1, 2017, and before January 1, 2022, for qualified taxpayers in an amount equal to 15% of the qualified value of fresh fruits or vegetables and specified raw agricultural products or processed foods donated to a food bank. In accordance with specified requirements imposed on bills containing new tax expenditures, existing law requires the Franchise Tax Board to report to the Legislature on or before December 1, 2019, and each December 1 thereafter until January 1, 2021, regarding the utilization of those tax credits and requires specified data to be included in the report. This bill would extend the authorization for those tax credits to a taxable year beginning before January 1, 2027. The bill would extend the requirement of the reports until January 1, 2026. (4) The Personal Income Tax Law and the Corporation Tax Law allow a credit against the taxes imposed by those laws, for taxable years beginning on or after January 1, 2017, and before January 1, 2026, a credit for rehabilitation of certified historic structures, as defined, and, under the Personal Income Tax Law, for a qualified residence, as defined. Existing law requires any bill authorizing a new tax expenditure, as defined, to include exclusions from income, 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 extend the operative dates of the above described credit through taxable years beginning before January 1, 2027. The bill would include additional information required for any bill authorizing a new tax expenditure. (5) The Personal Income Tax Law and the Corporation Tax Law allow a credit (CalCompetes tax credit) against the taxes imposed under those laws, for each taxable year beginning on and after January 1, 2014, and before January 1, 2030, in an amount as provided in a written agreement between the Governor's Office of Business and Economic Development and the taxpayer, approved by the California Competes Tax Credit Committee, and based on specified factors, including the number of jobs the taxpayer will create or retain in the state and the amount of investment in the state by the taxpayer. 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 increase the aggregate amount of credit that may be allocated under the CalCompetes tax credit for the 2021–22 fiscal year to $290,000,000. The bill would also make nonsubstantive changes to remove obsolete provisions of law. The bill also would include additional information required for any bill authorizing a new income tax credit. (6) The Personal Income Tax Law, in modified conformity with federal law, generally imposes a tax on the income of residents in the state, as specified, and allows various credits against the taxes imposed by that law. The Personal Income Tax Law also imposes an annual tax on every limited partnership, limited liability partnership, and limited liability company doing business in this state, as specified, in an amount equal to the minimum franchise tax. The Corporation Tax Law imposes an annual tax on "S" corporations at a rate of 1.5% of its net income, or if greater, the minimum franchise tax, as specified. Existing law requires any bill introduced on or after January 1, 2020, authorizing certain tax expenditures, as defined, to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would enact the Small Business Relief Act which, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, would authorize a partnership or "S" corporation that meets certain other requirements to elect to pay an elective tax at a rate based on its net income, as specified, for the taxable year. The bill would repeal the act on December 1, 2026, or make inoperative and repeal the act on an earlier date if a specified federal law is repealed. The bill would authorize the Franchise Tax Board to adopt regulations to implement the elective tax and exempt those regulations from the rulemaking provisions of the Administrative Procedure Act. The bill, for taxable years beginning on or after January 1, 2021, and before January 1, 2026, would allow a credit against the personal income tax to a taxpayer, other than a partnership, that is a partner, shareholder, or member of an entity that elects to pay the elective tax authorized by the bill, in an amount equal to a specified percentage of the partner's, shareholder's, or member's pro rata share or distributive share, as applicable, of income subject to the elective tax paid by the entity. The bill would also provide findings to comply with the additional information requirement for any bill authorizing a new tax expenditure. (7) Existing law establishes the State Department of Health Care Services within the California Health and Human Services Agency. Existing law sets forth the department's powers and duties relating to, among other things, public health, licensing and certification of certain health facilities, and the state Medi-Cal program. The Personal Income Tax Law, beginning on or after January 1, 2015, in modified conformity with federal income tax laws, allows an earned income tax credit, the California Earned Income Tax Credit (CalEITC) , against personal income tax and a payment from the Tax Relief and Refund Account for an allowable credit in excess of tax liability to an eligible individual that is equal to that portion of the earned income tax credit allowed by federal law as determined by the earned income tax credit adjustment factor, as specified. Existing law provides that it is a misdemeanor for the Franchise Tax Board or specified state employees to disclose or make known any information in a return, report, or document filed under income tax laws, but authorizes the Franchise Tax Board to disclose this information to specified agencies for specified purposes. Existing law makes any unwarranted disclosure or use of the information by those agencies a misdemeanor. This bill would require the State Department of Health Care Services to exchange data with the Franchise Tax Board upon request, including sufficient identifying information to allow the department and the board to assess the extent to which the department and the board can identify individuals enrolled in Medi-Cal who may be eligible for the CalEITC and the federal Earned Income Tax Credit. The bill would require the data provided to remain confidential and be used only for specified purposes related to increasing the number of eligible claims for the CalEITC and the federal Earned Income Tax Credit. (8) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. (9) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.