BILL NUMBER: SB 640 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 12, 2011
AMENDED IN SENATE APRIL 27, 2011
INTRODUCED BY Senator Runner
FEBRUARY 18, 2011
An act to add and repeal Sections 17053.50 and 23650 of the
Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 640, as amended, Runner. Income and corporation taxes: tax
credit: employment.
The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws.
This bill would, until a specified date
the last day of the calendar quarter within which the Franchise Tax
Board estimates it will receive returns
claiming credits that cumulatively total $50,000,000 , under
both laws, provide a tax credit, in an amount as specified, to a
qualified taxpayer for each qualified employee, as defined,
who actively received unemployment insurance benefits for 6 months
immediately prior to the time the qualified taxpayer hires
the qualified employee. This bill would define a "qualified
taxpayer" to mean a taxpayer that, as of the last day of the
preceding taxable year, employed a total of 50 or fewer employees.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be cited, as the
California Employment Recovery Act of 2011.
SEC. 2. Section 17053.50 is added to the Revenue and Taxation
Code, to read:
17053.50. (a) For taxable years beginning on or after January 1,
2011, there shall be allowed as a credit against the "net tax," as
defined in Section 17039, a qualified amount for each qualified
employee employed by the a qualified
taxpayer in a qualified job during the taxable year.
(b) For purposes of this section, the following definitions apply:
(1) (A) "Qualified amount" shall be equal to the sum of five
hundred dollars ($500) per month for each qualified employee employed
by the a qualified taxpayer in a
qualified job, multiplied by the number of consecutive calendar
months that the a qualified taxpayer
employs the qualified employee in a qualified job, but not to exceed
12 consecutive calendar months. Where a qualified employee has worked
at least two weeks in a month for the a
qualified taxpayer and earned a gross salary of at least seven
hundred fifty dollars ($750), the 12 consecutive calendar month
limitation may include two two-week pay periods. The qualified amount
for a two-week pay period shall be two hundred fifty dollars ($250).
(B) The aggregate qualified amount allowed for any qualified
employee shall not exceed six thousand dollars ($6,000).
(2) "Qualified employee" means any person who actively received
unemployment insurance benefits for not less than six months
immediately prior to the time he or she was hired for the first time
by the a qualified taxpayer for a
qualified job.
(3) "Qualified job" means a nonseasonal, full-time employment
position within the State of California that would qualify the
employee for benefits under the Unemployment Insurance Code, not
including any benefits received under Section 1279.5 of the
Unemployment Insurance Code, and result in a gross salary of not less
than one thousand five hundred dollars ($1,500) in any month in
which the a qualified taxpayer seeks to
apply the credit authorized by this section.
(4) "Qualified taxpayer" means a taxpayer that, as of the last day
of the preceding taxable year, employed a total of 50 or fewer
employees.
(c) The credit allowed by this section shall be in lieu of any
other credit that the a qualified
taxpayer may otherwise claim pursuant to this part with respect to a
qualified employee.
(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 year, and the five succeeding years if necessary,
until the credit is exhausted.
(e) This section shall remain in effect only until January 1 of
the calendar year after the full calendar year in which California's
average unemployment rate falls below 10 percent, and as of that
January 1 is repealed.
(e) (1) (A) A credit under this section and Section 23650 shall be
allowed only if it is claimed on timely filed original returns
received by the Franchise Tax Board on or before the cutoff date
established by the Franchise Tax Board.
(B) For purposes of this paragraph, the cutoff date shall be the
last day of the calendar quarter within which the Franchise Tax Board
estimates it will have received timely filed original returns
claiming credits under this section and Section 23650 that
cumulatively total fifty million dollars ($50,000,000) for all
taxable years.
(2) The date a return is received shall be determined by the
Franchise Tax Board.
(3) (A) The determinations of the Franchise Tax Board with respect
to the cutoff date, 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.
(B) Any disallowance of a credit claimed due to a determination
under this subdivision, including the application of the limitation
specified in paragraph (1), shall be treated as a mathematical error
appearing on the return. Any amount of tax resulting from such
disallowance may be assessed by the Franchise Tax Board in the same
manner as provided by Section 19051.
(4) The Franchise Tax Board shall periodically provide notice on
its Internet Web site with respect to the amount of credit under this
section and Section 23650 claimed on timely filed original returns
received by the Franchise Tax Board.
(f) The qualified taxpayer shall include with the timely filed
original return in a form and manner to be prescribed by the
Franchise Tax Board the title of the qualified job and the amount of
wages subject to Division 6 (commencing with Section 13000) of the
Unemployment Insurance Code paid by the qualified taxpayer to the
qualified employee.
(g) (1) The Franchise Tax Board may prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes of
this section, including any guidelines regarding the limitation on
total credits allowable under this section and Section 23650 and
guidelines necessary to prevent the avoidance of the purposes of this
section through split-ups, shell corporations, partnerships, tiered
ownership structures, or otherwise.
(2) 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 pursuant
to this section.
(h) This section shall remain in effect only until December 1 of
the calendar year after the year of the cutoff date, and as of that
December 1 is repealed.
SEC. 3. Section 23650 is added to the Revenue and Taxation Code,
to read:
23650. (a) For taxable years beginning on or after January 1,
2011, there shall be allowed as a credit against the "tax," as
defined in Section 23036, a qualified amount for each qualified
employee employed by the a qualified
taxpayer in a qualified job during the taxable year.
(b) For purposes of this section, the following definitions apply:
(1) (A) "Qualified amount" shall be equal to the sum of five
hundred dollars ($500) per month for each qualified employee employed
by the a qualified taxpayer in a
qualified job, multiplied by the number of consecutive calendar
months that the a qualified taxpayer
employs the qualified employee in a qualified job, but not to exceed
12 consecutive calendar months. Where a qualified employee has worked
at least two weeks in a month for the a
qualified taxpayer and earned a gross salary of at least seven
hundred fifty dollars ($750), the 12 consecutive calendar month
limitation may include two two-week pay periods. The qualified amount
for a two-week pay period shall be two hundred fifty dollars ($250).
(B) The aggregate qualified amount allowed for any qualified
employee shall not exceed six thousand dollars ($6,000).
(2) "Qualified employee" means any person who actively received
unemployment insurance benefits for at least
not less than six months immediately prior to the time he or
she was hired for the first time by the a
qualified taxpayer for a qualified job.
(3) "Qualified job" means a nonseasonal, full-time employment
position within the State of California that would qualify the
employee for benefits under the Unemployment Insurance Code, not
including any benefits received under Section 1279.5 of the
Unemployment Insurance Code, and result in a gross salary of not less
than one thousand five hundred dollars ($1,500) in any month in
which the a qualified taxpayer seeks to
apply the credit authorized by this section.
(4) "Qualified taxpayer" means a taxpayer that, as of the last day
of the preceding taxable year, employed a total of 50 or fewer
employees.
(c) The credit allowed by this section shall be in lieu of any
other credit that the a qualified
taxpayer may otherwise claim pursuant to this part with respect to a
qualified employee.
(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 year, and the five succeeding years if necessary, until the
credit is exhausted.
(e) This section shall remain in effect only until January 1 of
the calendar year after the full calendar year in which California's
average unemployment rate falls below 10 percent, and as of that
January 1 is repealed.
(e) (1) (A) A credit under this section and Section 17053.50 shall
be allowed only if it is claimed on timely filed original returns
received by the Franchise Tax Board on or before the cutoff date
established by the Franchise Tax Board.
(B) For purposes of this paragraph, the cutoff date shall be the
last day of the calendar quarter within which the Franchise Tax Board
estimates it will have received timely filed original returns
claiming credits under this section and Section 17053.50 that
cumulatively total fifty million dollars ($50,000,000) for all
taxable years.
(2) The date a return is received shall be determined by the
Franchise Tax Board.
(3) (A) The determinations of the Franchise Tax Board with respect
to the cutoff date, 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.
(B) Any disallowance of a credit claimed due to a determination
under this subdivision, including the application of the limitation
specified in paragraph (1), shall be treated as a mathematical error
appearing on the return. Any amount of tax resulting from such
disallowance may be assessed by the Franchise Tax Board in the same
manner as provided by Section 19051.
(4) The Franchise Tax Board shall periodically provide notice on
its Internet Web site with respect to the amount of credit under this
section and Section 17053.50 claimed on timely filed original
returns received by the Franchise Tax Board.
(f) The qualified taxpayer shall include with the timely filed
original return in a form and manner to be prescribed by the
Franchise Tax Board the title of the qualified job and the amount of
wages subject to Division 6 (commencing with Section 13000) of the
Unemployment Insurance Code paid by the qualified taxpayer to the
qualified employee.
(g) (1) The Franchise Tax Board may prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes of
this section, including any guidelines regarding the limitation on
total credits allowable under this section and Section 17053.50 and
guidelines necessary to prevent the avoidance of the purposes of this
section through split-ups, shell corporations, partnerships, tiered
ownership structures, or otherwise.
(2) 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 pursuant
to this section.
(h) This section shall remain in effect only until December 1 of
the calendar year after the year of the cutoff date, and as of that
December 1 is repealed.
SEC. 4. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.