SB 1357

  • California Senate Bill
  • 2019-2020 Regular Session
  • Introduced in Senate Feb 21, 2020
  • Senate
  • Assembly
  • Governor

Income tax credits: research and development: California Competes Tax Credit: sales and use taxes: refund.

Abstract

The Personal Income Tax Law and the Corporation Tax Law allows various credits against the taxes imposed by those laws, including (1) in modified conformity to a credit allowed by federal income tax laws, a credit under both laws in an amount equal to 15% of the excess of qualified research expenses for the taxable year over the base amount, as defined, and, for purposes of the Corporation Tax Law, 24% of the basic research payments, as defined, (research and development income tax credit) and (2) a 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 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 (Cal Competes income tax credit) . Existing state 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 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. This bill would permit a qualified person who has paid qualified sales tax reimbursement to a retailer on the sale of tangible personal property sold at retail in this state or has paid qualified use tax 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, in lieu of claiming the research and development income tax credit or the Cal Competes income tax credit under the Personal Income Tax Law or the Corporation Tax Law, to file a claim for a refund equal to the amount of the credit, as specified. The bill would define qualified sales tax reimbursement and qualified use tax to include state sales and use taxes and those local sales and use taxes imposed pursuant to, or in accordance with, the Bradley-Burns Uniform Local Sales and Use Tax Law and the Transactions and Use Tax Law. The bill would require that a claim for refund be accompanied by proof of payment by the qualified person of the sales tax reimbursement or the use tax and would require any person who claims a refund to make an irrevocable election to waive the equivalent amount of research and development income tax credit or Cal Competes income tax credit for which a refund is made. The bill would require the California Department of Tax and Fee Administration to provide an annual listing to the Franchise Tax Board of the qualified persons who, during the year, have made a claim for refund and an irrevocable election and the amount of the refund issued to each qualified person pursuant to the bill. The bill would provide that any refunds made by the department pursuant to a claim for refund under the bill is payable from the General Fund, upon appropriation by the Legislature.

Bill Sponsors (1)

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Actions


Mar 12, 2020

Senate

Referred to Com. on GOV. & F.

  • Referral-Committee
Com. on GOV. & F.

Feb 24, 2020

Senate

From printer. May be acted upon on or after March 25.

Senate

Read first time.

Feb 21, 2020

Senate

Introduced. To Com. on RLS. for assignment. To print.

Bill Text

Bill Text Versions Format
SB1357 HTML
02/21/20 - Introduced PDF

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