SB 414, as introduced, Knight. Income taxes: credits: qualified employees.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would, under both laws, for taxable years beginning on or after January 1, 2013, allow a credit to a qualified employer, as defined, in an amount equal to 50% of the tuition reimbursed to, and either 5% or 10% of the qualified wages paid to, a qualified employee working in qualified industry, as defined to include the manufacture of aerospace or defense hardware or software, aerospace maintenance, aerospace repair and overhaul, parts supply to the aerospace industry, provision of services and support relating to the aerospace industry, research and development of aerospace technology and systems, and the education and training of aerospace personnel, as provided.
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 17053.81 is added to the Revenue and
2Taxation Code, to read:
(a) (1) For each taxable year beginning on or after
2January 1, 2013, there shall be allowed to a qualified employer a
3credit against the “net tax,” as defined in Section 17039, in an
4amount equal to 50 percent, subject to paragraph (2), of the tuition
5reimbursed to a qualified employee by a qualified employer.
6(2) For each taxable year in which the credit is allowed, the
7credit amount shall not exceed 50 percent, per qualified employee,
8of the average annual tuition paid by a qualified employee that
9received an undergraduate or graduate degree at the University of
10California or the California State University. For purposes of this
11subdivision, “tuition” shall not include the cost of books, fees, or
12room and board.
13(3) The credit shall be allowed only for the first four years of
14employment of the qualified employee by the qualified employer.
15(b) For purposes of this section:
16(1) “Full-time” means either:
17(A) The employee is paid wages subject to Division 6
18(commencing with Section 13000) of the Unemployment Insurance
19Code for not less than an average of 35 hours per week.
20(B) The employee is salaried and was paid compensation during
21the taxable year for full-time employment, within the meaning of
22Section 515 of the Labor Code.
23(2) “Qualified employee” means a person who is employed by,
24or contracts with, the qualified employer in a
full-time position in
25the state within one year of being awarded an undergraduate or
26graduate degree from an engineering program accredited by the
27Engineering Accreditation Commission of the Accreditation Board
28for Engineering and Technology, offered by the University of
29California, the California State University, or a private college or
30university that is accredited by a national accrediting body, for
31work in a qualified industry and who was not employed by any
32qualified employer for work in a qualified industry prior to his or
33her current employment or contract.
34(3) “Qualified employer” means a person or entity who is
35engaged in a trade or business in a qualified industry.
36(4) “Qualified industry” means the manufacture of aerospace
37or defense hardware or software, aerospace maintenance, aerospace
38repair and overhaul, parts supply to the aerospace industry,
39provision of services
and support relating to the aerospace industry,
P3 1research and development of aerospace technology and systems,
2and the education and training of aerospace personnel.
3(c) In the case where the credit allowed by this section exceeds
4the “net tax,” the excess may be carried over to reduce the “net
5tax” in the following year, and succeeding years if necessary, until
6the credit is exhausted.
7(d) (1) The Franchise Tax Board may prescribe rules,
8guidelines, or procedures necessary or appropriate to carry out the
9purposes of this section.
10(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
11Division 3 of Title 2 of the Government Code does not apply to
12any standard, criterion, procedure, determination, rule, notice, or
13guideline established or issued by the Franchise Tax Board
14pursuant to this
section.
Section 17053.82 is added to the Revenue and Taxation
16Code, to read:
(a) (1) For each taxable year beginning on or after
18January 1, 2013, there shall be allowed to a qualified employer as
19a credit against the “net tax,” as defined in Section 17039, an
20amount as specified in paragraph (2) per each qualified employee
21employed during the taxable year by the qualified employer.
22(2) (A) Ten percent of the qualified wages of the qualified
23employee if he or she received an undergraduate or graduate degree
24from a public or private college or university located in this state.
25(B) Five percent of the qualified wages of the qualified employee
26if he or she received an undergraduate or graduate degree from a
27public
or private college or university located outside of this state.
28(C) The maximum amount of credit allowed pursuant to this
29section is twelve thousand five hundred dollars ($12,500) per
30qualified employee per taxable year.
31(3) The credit shall be allowed only for the first five years of
32employment of the qualified employee by the qualified employer.
33(b) For purposes of this section:
34(1) “Full-time” means either:
35(A) The employee is paid wages subject to Division 6
36(commencing with Section 13000) of the Unemployment Insurance
37Code for not less than an average of 35 hours per week.
38(B) The employee is salaried and was paid
compensation during
39the taxable year for full-time employment, within the meaning of
40Section 515 of the Labor Code.
P4 1(2) “Qualified employee” means a person who is employed by,
2or contracts with, the qualified employer in a full-time position in
3the state within one year of being awarded an undergraduate or
4graduate degree from a program that has been accredited by the
5Engineering Accreditation Commission of the Accreditation Board
6for Engineering and Technology offered by a public or private
7college or university accredited by a national accrediting body,
8for work in a qualified industry and who was not employed by any
9qualified employer for work in a qualified industry prior to his or
10her current employment or contract.
11(3) “Qualified employer” means a person or entity who is
12engaged in a trade or business in a qualified industry.
13(4) “Qualified industry” means the manufacture of aerospace
14or defense hardware or software, aerospace maintenance, aerospace
15repair and overhaul, parts supply to the aerospace industry,
16provision of services and support relating to the aerospace industry,
17research and development of aerospace technology and systems,
18and the education and training of aerospace personnel.
19(5) “Qualified wages” means wages subject to withholding tax
20pursuant to Division 6 (commencing with Section 13000) of the
21Unemployment Insurance Code paid to employee, salary, or other
22remuneration. “Qualified wages” shall not include
23employer-provided retirement, medical or health care benefits,
24reimbursement for travel, meals, lodging, or any other expense.
25(c) In the case where the credit allowed by this section exceeds
26the “net tax,” the excess may be
carried over to reduce the “net
27tax” in the following year, and succeeding years if necessary, until
28the credit is exhausted.
29(d) (1) The Franchise Tax Board may prescribe rules,
30guidelines, or procedures necessary or appropriate to carry out the
31purposes of this section.
32(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
33Division 3 of Title 2 of the Government Code does not apply to
34any standard, criterion, procedure, determination, rule, notice, or
35guideline established or issued by the Franchise Tax Board
36pursuant to this section.
Section 23623.1 is added to the Revenue and Taxation
38Code, to read:
(a) (1) For each taxable year beginning on or after
40January 1, 2013, there shall be allowed to a qualified employer a
P5 1credit against the “tax,” as defined in Section 23036, in an amount
2equal to 50 percent, subject to paragraph (2), of the tuition
3reimbursed to a qualified employee by a qualified employer.
4(2) For each taxable year in which the credit is allowed, the
5credit amount shall not exceed 50 percent, per qualified employee,
6of the average annual tuition paid by a qualified employee that
7received an undergraduate or graduate degree at the University of
8California or the California State University. For purposes of this
9subdivision, “tuition” shall not include the cost of books, fees, or
10room and board.
11(3) The credit shall be allowed only for the first four years of
12employment of the qualified employee by the qualified employer.
13(b) For purposes of this section:
14(1) “Full-time” means either:
15(A) The employee is paid wages subject to Division 6
16(commencing with Section 13000) of the Unemployment Insurance
17Code for not less than an average of 35 hours per week.
18(B) The employee is salaried and was paid compensation during
19the taxable year for full-time employment, within the meaning of
20Section 515 of the Labor Code.
21(2) “Qualified employee” means a person who is employed by,
22or contracts with, the qualified employer in a
full-time position in
23the state within one year of being awarded an undergraduate or
24graduate degree from an engineering program accredited by the
25Engineering Accreditation Commission of the Accreditation Board
26for Engineering and Technology, offered by the University of
27California, the California State University, or a private college or
28university that is accredited by a national accrediting body, for
29work in a qualified industry and who was not employed by any
30qualified employer for work in a qualified industry prior to his or
31her current employment or contract.
32(3) “Qualified employer” means a person or entity who is
33engaged in a trade or business in a qualified industry.
34(4) “Qualified industry” means the manufacture of aerospace
35or defense hardware or software, aerospace maintenance, aerospace
36repair and overhaul, parts supply to the aerospace industry,
37provision of services
and support relating to the aerospace industry,
38research and development of aerospace technology and systems,
39and the education and training of aerospace personnel.
P6 1(c) In the case where the credit allowed by this section exceeds
2the “tax,” the excess may be carried over to reduce the “tax” in
3the following year, and succeeding years if necessary, until the
4credit is exhausted.
5(d) (1) The Franchise Tax Board may prescribe rules,
6guidelines, or procedures necessary or appropriate to carry out the
7purposes of this section.
8(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
9Division 3 of Title 2 of the Government Code does not apply to
10any standard, criterion, procedure, determination, rule, notice, or
11guideline established or issued by the Franchise Tax Board
12pursuant to this
section.
Section 23623.2 is added to the Revenue and Taxation
14Code, to read:
(a) (1) For each taxable year beginning on or after
16January 1, 2013, there shall be allowed to a qualified employer as
17a credit against the “tax,” as defined in Section 23036, an amount
18as specified in paragraph (2) per each qualified employee employed
19during the taxable year by the qualified employer.
20(2) (A) Ten percent of the qualified wages of the qualified
21employee if he or she received an undergraduate or graduate degree
22from a public or private college or university located in this state.
23(B) Five percent of the qualified wages of the qualified employee
24if he or she received an undergraduate or graduate degree from a
25public or
private college or university located outside of this state.
26(C) The maximum amount of credit allowed pursuant to this
27section is twelve thousand five hundred dollars ($12,500) per
28qualified employee per taxable year.
29(3) The credit shall be allowed only for the first five years of
30employment of the qualified employee by the qualified employer.
31(b) For purposes of this section:
32(1) “Full-time” means either:
33(A) The employee is paid wages subject to Division 6
34(commencing with Section 13000) of the Unemployment Insurance
35Code for not less than an average of 35 hours per week.
36(B) The employee is salaried and was paid
compensation during
37the taxable year for full-time employment, within the meaning of
38Section 515 of the Labor Code.
39(2) “Qualified employee” means a person who is employed by,
40or contracts with, the qualified employer in a full-time position in
P7 1the state within one year of being awarded an undergraduate or
2graduate degree from a program that has been accredited by the
3Engineering Accreditation Commission of the Accreditation Board
4for Engineering and Technology offered by a public or private
5college or university accredited by a national accrediting body,
6for work in a qualified industry and who was not employed by any
7qualified employer for work in a qualified industry prior to his or
8her current employment or contract.
9(3) “Qualified employer” means a person or entity who is
10engaged in a trade or business in a qualified industry.
11(4) “Qualified industry” means the manufacture of aerospace
12or defense hardware or software, aerospace maintenance, aerospace
13repair and overhaul, parts supply to the aerospace industry,
14provision of services and support relating to the aerospace industry,
15research and development of aerospace technology and systems,
16and the education and training of aerospace personnel.
17(5) “Qualified wages” means wages subject to withholding tax
18pursuant to Division 6 (commencing with Section 13000) of the
19Unemployment Insurance Code paid to employee, salary, or other
20remuneration. “Qualified wages” shall not include
21employer-provided retirement, medical or health care benefits,
22reimbursement for travel, meals, lodging, or any other expense.
23(c) In the case where the credit allowed by this section exceeds
24the “net tax,” the excess may be
carried over to reduce the “net
25tax” in the following year, and succeeding years if necessary, until
26the credit is exhausted.
27(d) (1) The Franchise Tax Board may prescribe rules,
28guidelines, or procedures necessary or appropriate to carry out the
29purposes of this section.
30(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
31Division 3 of Title 2 of the Government Code does not apply to
32any standard, criterion, procedure, determination, rule, notice, or
33guideline established or issued by the Franchise Tax Board
34pursuant to this section.
This act provides for a tax levy within the meaning of
36Article IV of the Constitution and shall go into immediate effect.
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