BILL NUMBER: AB 2617	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Tran

                        FEBRUARY 19, 2010

   An act to add Sections 17053.81 and 23625 to the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2617, as introduced, Tran. Income taxes: credit: new jobs.
   The Personal Income Tax Law and the Corporate Tax Law authorize
various credits against the taxes imposed by those laws.
   This bill would, for taxable years beginning on or after January
1, 2010, allow a credit against those taxes in an amount equal to 15%
of the wages paid or incurred during the taxable year to a qualified
taxpayer commencing to do business on or after 2010, 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 1.  Section 17053.81 is added to the Revenue and Taxation
Code, to read:
   17053.81.  (a) For taxable years beginning on or after January 1,
2010, there shall be allowed as a credit against the "net tax," as
defined in Section 17039, an amount equal to 15 percent of the wages
paid or incurred during the taxable year to a qualified taxpayer
first commencing to do business on or after 2010.
   (b) For purposes of this section:
   (1) "Qualified full-time employee" means:
   (A) A qualified employee who was paid qualified wages by the
taxpayer for services of not less than an average of 35 hours per
week.
   (B) A qualified employee who was a salaried employee and was paid
compensation during the applicable taxable year for full-time
employment, within the meaning of Section 515 of the Labor Code, by
the taxpayer.
   (2) "Annual full-time equivalent" means either of the following:
   (A) In the case of a full-time employee paid hourly qualified
wages, "annual full-time equivalent" means the total number of hours
worked during the applicable taxable year for the taxpayer by the
employee (not to exceed 2,000 hours per employee) divided by 2,000.
   (B) In the case of a salaried full-time employee, "annual
full-time equivalent" means the total number of weeks worked during
the applicable taxable year for the taxpayer by the employee divided
by 52.
   (3) "Qualified wages" means wages subject to Division 6
(commencing with Section 13000) of the Unemployment Insurance Code.
   (c) Any deduction otherwise allowed under this part for qualified
wages shall not be reduced by the amount of the credit allowed under
this section.
   (d) For purposes of this section, all employees of the trades or
businesses that are treated as related under either Section 267, 318,
or 707 of the Internal Revenue Code shall be treated as employed by
a single taxpayer.
   (e) 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 years if necessary, until the
credit has been exhausted.
  SEC. 2.  Section 23625 is added to the Revenue and Taxation Code,
to read:
   23625.  (a) For taxable years beginning on or after January 1,
2010, there shall be allowed as a credit against the "tax," as
defined in Section 23036, an amount equal to 15 percent of the wages
paid or incurred during the taxable year to a qualified taxpayer
first commencing to do business on or after 2010.
   (b) For purposes of this section:
   (1) "Qualified full-time employee" means:
   (A) A qualified employee who was paid qualified wages during the
taxable year by the taxpayer for services of not less than an average
of 35 hours per week.
   (B) A qualified employee who was a salaried employee and was paid
compensation during the taxable year for full-time employment, within
the meaning of Section 515 of the Labor Code, by the taxpayer.
   (2) "Annual full-time equivalent" means either of the following:
   (A) In the case of a full-time employee paid hourly qualified
wages, "annual full-time equivalent" means the total number of hours
worked for the taxpayer by the employee (not to exceed 2,000 hours
per employee) divided by 2,000.
   (B) In the case of a salaried full-time employee, "annual
full-time equivalent" means the total number of weeks worked for the
taxpayer by the employee divided by 52.
   (3) "Qualified wages" means wages subject to Division 6
(commencing with Section 13000) of the Unemployment Insurance Code.
   (c) Any deduction otherwise allowed under this part for qualified
wages shall not be reduced by the amount of the credit allowed under
this section.
   (d) For purposes of this section, all employees of the trades or
businesses that are treated as related under either Section 267, 318,
or 707 of the Internal Revenue Code shall be treated as employed by
a single taxpayer.
   (e) 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 years if necessary, until the credit
has been 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.