Senate BillNo. 1272


Introduced by Senator Runner

February 18, 2016


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 1272, as introduced, Runner. Income taxes: credit: small business employee savings plan.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.

This bill would allow, for taxable years beginning on or after January 1, 2016, and before January 1, 2021, a tax credit under both laws in an amount equal to 50% of the qualified taxpayer’s contributions to a qualified employee savings plan, 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:

P1    1

SECTION 1.  

Section 17053.50 is added to the Revenue and
2Taxation Code
, to read:

3

17053.50.  

(a) For taxable years beginning on or after January
41, 2016, and before January 1, 2021, there shall be allowed to a
5qualified taxpayer a credit against the “net tax,” as defined in
6Section 17039, in an amount equal to 50 percent of the qualified
7taxpayer’s contributions to a qualified employee savings plan, not
P2    1to exceed two thousand dollars ($2,000) per employee per taxable
2year.

3(b) For purposes of this section:

4(1) “Qualified employee savings plan” means an employee
5savings plan where at least half of the recipient employees earn
6less than forty thousand dollars ($40,000) in wages received from
7the qualified taxpayer per taxable year.

8(2) “Qualified taxpayer” means a taxpayer that is a small
9business as defined in Section 14837 of the Government Code.

10(c) This section shall remain in effect only until December 1,
112021, and as of that date is repealed.

12

SEC. 2.  

Section 23650 is added to the Revenue and Taxation
13Code
, to read:

14

23650.  

(a) For taxable years beginning on or after January 1,
152016, and before January 1, 2021, there shall be allowed to a
16qualified taxpayer a credit against the “net tax,” as defined in
17Section 17039, in an amount equal to 50 percent of the qualified
18taxpayer’s contributions to a qualified employee savings plan, not
19to exceed two thousand dollars ($2,000) per employee per taxable
20year.

21(b) For purposes of this section:

22(1) “Qualified employee savings plan” means an employee
23savings plan where at least half of the recipient employees earn
24less than forty thousand dollars ($40,000) in wages received from
25the qualified taxpayer per taxable year.

26(2) “Qualified taxpayer” means a taxpayer that is a small
27business as defined in Section 14837 of the Government Code.

28(c) This section shall remain in effect only until December 1,
292021, and as of that date is repealed.

30

SEC. 3.  

(a) In accordance with Section 41 of the Revenue and
31Taxation Code, the purpose of the credit allowed by Sections
3217053.50 and 23650 of the Revenue and Taxation Code, as added
33by Sections 1 and 2 of this act is to promote savings for employees,
34especially young and low-income workers who have no savings
35and no retirement options other than Social Security. To measure
36whether the credit achieves its intended purpose, on or before
37January 1, 2018, and each January 1 thereafter, the Franchise Tax
38Board shall annually prepare a written report to the Legislature of
39the following:

P3    1(1) The percentage of employees under 30 years of age who are
2receiving matching funds.

3(2) The percentage of employees earning less than forty
4thousand dollars ($40,000) per annum who are receiving matching
5funds.

6(b) A report submitted pursuant to subdivision (a) shall be
7submitted in compliance with Section 9795 of the Government
8Code.

9

SEC. 4.  

This act provides for a tax levy within the meaning of
10Article IV of the Constitution and shall go into immediate effect.



O

    99