Bill Text: CA AB1818 | 2011-2012 | Regular Session | Amended

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Bill Title: Income taxes: credit: patent licensing.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2012-08-16 - In committee: Set, second hearing. Held under submission. [AB1818 Detail]

Download: California-2011-AB1818-Amended.html

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BILL NUMBER: AB 1818	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 17, 2012
	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Members Perea and Beall

                        FEBRUARY 21, 2012

   An act to add Sections 17053.99 and 23699 to the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1818, as amended, Perea. Income taxes: credit: patent
licensing.
   The Personal Income Tax Law and the Corporation Tax Law allow
various credits against the taxes imposed by those laws.
   This bill would, under the Personal Income Tax Law and the
Corporation Tax Law, for taxable years beginning on or after January
1, 2012, allow a credit against those taxes in an amount equal to
 ____%  15%  of the qualified royalties, as
defined, paid by a qualified taxpayer, as defined.
   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.  Section 17053.99 is added to the Revenue and Taxation
Code, to read:
   17053.99.  (a) For each taxable year beginning on or after January
1, 2012, there shall be allowed to a qualified taxpayer as a credit
against the "net tax," as defined in Section 17039, an amount equal
to  ____   15  percent of the qualified
royalties paid by the qualified taxpayer during the taxable year.
   (b) For purposes of this section: 
   (1) "Commercialize" means the process in which a taxpayer is a
licensee of a qualified patent and uses the patent in connection
with, or incorporates the patent into, intellectual property or
tangible personal property in the manner described, with respect to
which a qualified patent is used directly or indirectly in connection
with the manufacturing, production, growing, or extraction process
with respect to such property, or is incorporated into such property
and such incorporation serves a significant commercial purpose. 

   (1) 
    (2)  "Qualified patent" means a patent owned by the
University of California for an invention where the research and
development for that invention was funded, in whole or in part, by
amounts eligible for the credit under Section 17052.12 or 23609. 

   (3) "Qualified research" has the same meaning as set forth in
Section 41(d) of the Internal Revenue Code, as modified by Section
17052.12.  
   (2) 
    (4)  "Qualified royalties" means any royalties paid by a
qualified taxpayer for the use of a qualified patent through a
license agreement with the University of California or another
entity. 
   (3) 
    (5)  "Qualified taxpayer" means a taxpayer that paid
qualified royalties during the taxable year and commercializes, 
for at least five consecutive years  within the state, the
licensed patent for which qualified royalties were paid during the
taxable year.
   (c) 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 succeeding  eight  years if
necessary, until the credit is exhausted.
  SEC. 2.  Section 23699 is added to the Revenue and Taxation Code,
to read:
   23699.  (a) For each taxable year beginning on or after January 1,
2012, there shall be allowed to a qualified taxpayer as a credit
against the "tax," as defined in Section 23036, an amount equal to
 ____   15  percent of the qualified amount
paid by the qualified taxpayer during the taxable year.
   (b) For purposes of this section: 
   (1) "Commercialize" means the process in which a taxpayer is a
licensee of a qualified patent and uses the patent in connection
with, or incorporates the patent into, intellectual property or
tangible personal property in the manner described, with respect to
which a qualified patent is used directly or indirectly in connection
with the manufacturing, production, growing, or extraction process
with respect to such property, or is incorporated into such property
and such incorporation serves a significant commercial purpose. 

   (1) 
    (2)  "Qualified patent" means a patent owned by the
University of California for an invention where the research and
development for that invention was funded, in whole or in part, by
amounts eligible for the credit under Section 17052.12 or 23609. 

   (3) "Qualified research" has the same meaning as set forth in
Section 41(d) of the Internal Revenue Code, as modified by Section
23609.  
   (2) 
    (3)  "Qualified royalties" means any royalties paid by a
qualified taxpayer for the use of a qualified patent through a
license agreement with the University of California or another
entity. 
   (3) 
    (4)  "Qualified taxpayer" means a taxpayer that paid
qualified royalties during the taxable year and commercializes, 
for at least five consecutive years  within the state, the
licensed patent for which qualified royalties were paid during the
taxable year.
   (c) 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 succeeding  eight  years if necessary,
until the credit is exhausted.
  SEC. 3.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.