Bill Text: CA AB2640 | 2009-2010 | Regular Session | Amended
Bill Title: Income taxes: credits: sales tax on qualified property:
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-11-30 - From committee without further action. [AB2640 Detail]
Download: California-2009-AB2640-Amended.html
BILL NUMBER: AB 2640 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 18, 2010
AMENDED IN ASSEMBLY APRIL 8, 2010
INTRODUCED BY Assembly Member Arambula
FEBRUARY 19, 2010
An act to amend Section 17149 of, and to add Sections
17053.49 and 23649 to, add and repeal Sections
17053.49, 17148, and 23649 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2640, as amended, Arambula. Income taxes: subsidized
parking: credits: sales tax on qualified
property : exclusion: qualified parking .
The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws.
This bill would, under both laws, provide for a credit in a
specified amount of the sales and use taxes paid by a qualified
taxpayer for qualified property placed in service within this state,
for taxable years beginning on or after January 1, 2010
2011, and before January 1, 2016 .
The Personal Income Tax Law provides and
the Corporation Tax Law, in conformity with federal income tax law,
provide an exclusion from gross income for
compensation or the fair market value of any benefit, except salary
or wages, that is received by an employee from an employer for the
use of various transportation methods or arrangements
specified transportation benefits provided to employees by
employers , including free or subsidized
qualified parking.
This bill would, for taxable years beginning on or after January
1, 2010 2011, and before January 1, 2016
, remove the exclusion from gross income for free or
subsidized qualified parking.
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 17053.49 is added to the Revenue and Taxation
Code, to read:
17053.49. (a) (1) For each taxable year beginning on or after
January 1, 2010 2011, and before January 1,
2016 , there shall be allowed to a qualified taxpayer as a
credit against the "net tax," as defined in Section 17039, an amount
as described in paragraph (2) for qualified property that is placed
in service in this state.
(2) The amount of credit allowed by this section shall be the
percentage full amount of the total
sales tax reimbursement or use tax paid on a purchase or purchases of
qualified property, the revenues of which are deposited in the
General Fund.
(b) For purposes of this section:
(1) "Primarily" means 50 percent or more of a taxpayer's business
consists of any line of business as described in paragraph (3).
(1)
(2) "Qualified property" means any property that is
Section 1245 property, as defined in Section 1245(a)(3) of the
Internal Revenue Code.
(2)
(3) "Qualified taxpayer" means a purchaser
taxpayer primarily engaged in any of those lines
of business described in properly classified
under Codes 311111 to 339999, inclusive, of the North American
Industrial Industry Classification
System (NAICS) Manual published by the United States Office of
Management and Budget, 2007 edition.
(c) No credit, no further credit in any subsequent year, and no
credit carryover shall be allowed with respect to the qualified
property to any qualified taxpayer beginning in the year in which
that qualified property for which a credit was allowed under this
section is disposed of or removed from this state within one year of
the date of purchase.
(c) A qualified taxpayer shall notify the Franchise Tax Board
within 30 days after the qualified property is removed from the state
or is disposed of to an unrelated party in the same taxable year. No
credit shall be allowed under this section if the qualified property
is removed from the state or is disposed of to an unrelated party in
the same taxable year or the first taxable year following the
taxable year in which the qualified property is first placed in
service in this state. If any qualified property for which a credit
is allowed pursuant to this section is thereafter removed from this
state or disposed of to an unrelated party within one year from the
date the qualified property is first placed in service in this state,
the amount of the credit allowed by this section for that qualified
property shall be recaptured by adding that credit amount to the "net
tax" of the qualified taxpayer for the taxable year in which the
qualified property is disposed of or removed.
(d) 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 the succeeding eight years,
until the credit is exhausted.
(e) (1) Credit under this section and Section 23649 shall be
allowed on or before the cutoff date established by the Franchise Tax
Board and shall be granted on a first-come-first-served basis.
(2) For the first taxable calendar year in which this credit is in
effect, the cutoff date shall be the last day of the calendar
quarter within which the Franchise Tax Board estimates that the
aggregate revenue increase generated from the amendments made to
Section 17149 by the act adding this section has reached the baseline
amount. For purposes of this subparagraph, "baseline amount" means
one hundred million dollars ($100,000,000).
(3) For each subsequent taxable year, the cutoff date shall be the
last day of the calendar quarter within which the Franchise Tax
Board estimates that the baseline amount has been reached, or that
amount is adjusted each calendar year to reflect the rate of
inflation or deflation from the previous date that the baseline
amount was established, as measured by the Consumer Price Index or
other method of measuring the rate of inflation or deflation which
the Franchise Tax Board determines is reliable and generally
accepted.
(e) The credit under this section shall be allowed only for the
taxable year in which the qualified property is placed in service in
this state.
(f) The credit allowed by this section shall be in lieu of any
other credit or deduction that the taxpayer may otherwise claim
pursuant to this part with respect to sales tax reimbursement or use
tax paid on a purchase or purchases of qualified property.
(g) To reserve a credit allocation, the qualified taxpayer shall
send an application to provide satisfactory substantiation in the
form and manner proscribed by the Franchise Tax Board, that the
taxpayer is eligible for a credit allocation pursuant this section.
The taxpayer shall attach to the application the documents that the
Franchise Tax Board determines to be necessary to substantiate the
amount of sales and use taxes paid and the date that the qualified
property was placed in service in this state. Upon the receipt of the
application, the Franchise Tax Board shall notify the qualified
taxpayer that the Franchise Tax Board has reserved the credit for the
taxpayer, pending receipt of a timely filed tax return for the
taxable year.
(h) (1) (A) The total amount of credit that may be allocated
pursuant to this section and Section 23649 shall not exceed one
hundred million dollars ($100,000,000), hereafter the "baseline
amount."
(B) For each taxable year beginning on or after January 1, 2012,
the Franchise Tax Board shall recompute the baseline amount. That
computation shall be made as follows:
(i) The Department of Industrial Relations shall transmit annually
to the Franchise Tax Board the percentage change in the California
Consumer Price Index for all items from June of the prior calendar
year to June of the current calendar year, no later than August 1 of
the current calendar year.
(ii) The Franchise Tax Board shall do both of the following:
(I) Compute an inflation adjustment factor by adding 100 percent
to the percentage change figure that is furnished pursuant to clause
(i) and dividing the result by 100.
(II) Multiply the preceding taxable year baseline amount by the
inflation adjustment factor determined in subclause (I) and round off
the resulting products to the nearest one dollar ($1).
(2) Once the credits allocated for qualified property exceed the
limit established in paragraph (1), the Franchise Tax Board shall
establish a wait list for subsequently received reservations, with an
order of priority based on the date reservation was received by the
Franchise Tax Board. The Franchise Tax Board shall notify taxpayers
on the wait list no later than December 31 of the taxable year for
which the credit was applied as to whether they have been allocated a
credit and the amount allocated.
(i) (1) Upon receipt of the information described in subdivision
(g), the Franchise Tax Board shall allocate the credit to the
taxpayer on a first-come-first-served basis.
(2) (A) Except as provided in subparagraph (B), the qualified
taxpayer shall claim the credit on a timely filed original return.
(B) Qualified taxpayers on the wait list, as described in
paragraph (2) of subdivision (h), that are allocated a credit may
claim the credit on an amended income tax return for that taxable
year.
(3) The date the information described in subdivision (g) is
received shall be determined by the Franchise Tax Board.
(j) The Franchise Tax Board may prescribe, by forms, instructions,
published notices, or regulations, any requirements necessary for
the efficient administration of this section.
(k) This section shall remain in effect until December 1, 2016,
and as of that date is repealed.
SEC. 2. Section 17148 is added to the
Revenue and Taxation Code , to read:
17148. (a) For taxable years beginning on or after January 1,
2011, and before January 1, 2016, Section 132(f)(1)(C) of the
Internal Revenue Code, relating to exclusion from income for
qualified parking, shall not apply.
(b) This section shall remain in effect until December 1, 2016,
and as of that date is repealed.
SEC. 2. Section 17149 of the Revenue and
Taxation Code is amended to read:
17149. (a) Gross income does not include compensation or the fair
market value of any other benefit, except salary or wages, received
by an employee from an employer for participation in any ridesharing
arrangement in California, including those specified in subdivision
(b).
(b) For purposes of this section, compensation or the fair market
value of any other benefit received for participation in a
ridesharing arrangement in California includes compensation or other
benefit received for:
(1) Commuting in a vanpool.
(2) Commuting in a private commuter bus or buspool.
(3) A transit pass for use by the employee or his or her
dependents, other than transit passes for use by elementary and
secondary school students who are dependents of the employee.
(4) Commuting in a subscription taxipool.
(5) Commuting in a carpool.
(6) An employee's bicycling to or from his or her place of
employment.
(7) Commuting by ferry.
(8) The use of an alternative transportation method, other than a
method otherwise specified in this subdivision, that reduces the use
of a motor vehicle by a single occupant to travel to or from that
individual's place of employment.
(9) Travel to or from a telecommuting facility.
(c) For purposes of this section:
(1) "Vanpool" means seven or more persons commuting on a daily
basis to and from work by means of a vehicle with a seating
arrangement designed to carry 7 to 15 adults, including the driver,
that is used to transport those persons who commute to and from work
on a regular basis.
(2) "Transit pass" means any purchase of transit rides that
entitles the holder to any number of transit rides to and from the
workplace, whether at a discount rate or the base fare rate.
(3) "Transit" means transportation service for use by the general
public that utilizes buses, railcars, or ferries with a seating
capacity of 16 or more persons.
(4) "Subscription taxipool" means a type of service in which
employers or groups of employees contract with a public or private
taxi operator to provide daily commuter service for a group of
preassembled subscribers on a prepaid or daily fare basis following a
relatively fixed route and schedule tailored to meet the needs of
the subscribers.
(5) "Ridesharing arrangement" means the transportation of persons
in a motor vehicle where that transportation is incidental to another
purpose of the driver. The term includes ridesharing arrangements
known as carpools, vanpools, and buspools.
(6) "Carpool" means two or more persons commuting on a daily basis
to and from work by means of a vehicle with a seating arrangement
designed to carry less than seven adults, including the driver.
(7) "Buspool" means 16 or more persons commuting on a daily basis
to and from work by means of a vehicle with a seating arrangement
designed to carry more than 15 adult passengers.
(8) "Private commuter bus" means a highway vehicle which meets all
of the following criteria:
(A) Has a seating capacity of at least seven adults, including the
driver.
(B) At least 50 percent of the mileage of which can be reasonably
expected to be used for the purpose of transporting employees to and
from work.
(C) Is acquired by the taxpayer on or after the date of enactment
of this section.
(D) With respect to which the taxpayer makes an election under
this paragraph on his or her return for the taxable year in which the
vehicle is placed in service.
(9) "Alternative commute program" means any alternative
transportation method or program the purpose of which is to reduce
the use of a motor vehicle by a single occupant to travel to and from
that individual's place of employment.
(d) The amendments made to this section by the act adding this
subdivision shall apply to taxable years beginning on or after
January 1, 2010.
SEC. 3. Section 23649 is added to the Revenue and Taxation Code,
to read:
23649. (a) (1) For each taxable year beginning on or after
January 1, 2010 2011, and before January 1,
2016 , there shall be allowed to a qualified taxpayer as a
credit against the "tax," as defined in Section 23036, an amount as
described in paragraph (2) for qualified property that is placed in
service in this state.
(2) The amount of credit allowed by this section shall be the
percentage full amount of the total
sales tax reimbursement or use tax paid on a purchase or purchases of
qualified property, the revenues of which are deposited in the
General Fund.
(b) For purposes of this section:
(1) "Primarily" means 50 percent or more of a taxpayer's business
consists of any line of business as described in paragraph (3).
(1)
(2) "Qualified property" means any property that is
Section 1245 property, as defined in Section 1245(a)(3) of the
Internal Revenue Code.
(2)
(3) "Qualified taxpayer" means a purchaser
taxpayer primarily engaged in any of those lines
of business described in properly classified
under Codes 311111 to 339999, inclusive, of the North American
Industrial Industry Classification
System (NAICS) Manual published by the United States Office of
Management and Budget, 2007 edition.
(c) No credit, no further credit in any subsequent year, and no
credit carryover shall be allowed with respect to the qualified
property to any qualified taxpayer beginning in the year in which
that qualified property for which a credit was allowed under this
section is disposed of or removed from this state within one year of
the date of purchase.
(c) A qualified taxpayer shall notify the Franchise Tax Board
within 30 days after the qualified property is removed from the state
or is disposed of to an unrelated party in the same taxable year. No
credit shall be allowed under this section if the qualified property
is removed from the state or is disposed of to an unrelated party in
the same taxable year or the first taxable year following the
taxable year in which the qualified property is first placed in
service in this state. If any qualified property for which a credit
is allowed pursuant to this section is thereafter removed from this
state or disposed of to an unrelated party within one year from the
date the qualified property is first placed in service in this state,
the amount of the credit allowed by this section for that qualified
property shall be recaptured by adding that credit amount to the "tax"
of the qualified taxpayer for the taxable year in which the
qualified property is disposed of or removed.
(d) 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 the succeeding eight years, until the
credit is exhausted.
(e) (1) Credit under this section and Section 17053.49 shall be
allowed on or before the cutoff date established by the Franchise Tax
Board and shall be granted on a first-come-first-served basis.
(2) For the first taxable calendar year in which this credit is in
effect, the cutoff date shall be the last day of the calendar
quarter within which the Franchise Tax Board estimates that the
aggregate revenue increase generated from the amendments made to
Section 17149 by the act adding this section has reached the baseline
amount. For purposes of this subparagraph, "baseline amount" means
one hundred million dollars ($100,000,000).
(3) For each subsequent taxable year, the cutoff date shall be the
last day of the calendar quarter within which the Franchise Tax
Board estimates that the baseline amount has been reached, or that
amount is adjusted each calendar year to reflect the rate of
inflation or deflation from the previous date that the baseline
amount was established, as measured by the Consumer Price Index or
other method of measuring the rate of inflation or deflation which
the Franchise Tax Board determines is reliable and generally
accepted.
(e) The credit under this section shall be allowed only for the
taxable year in which the qualified property is placed in service in
this state.
(f) The credit allowed by this section shall be in lieu of any
other credit or deduction that the taxpayer may otherwise claim
pursuant to this part with respect to sales tax reimbursement or use
tax paid on a purchase or purchases of qualified property.
(g) To reserve a credit allocation, the qualified taxpayer shall
send an application to provide satisfactory substantiation in the
form and manner proscribed by the Franchise Tax Board, that the
taxpayer is eligible for a credit allocation pursuant this section.
The taxpayer shall attach to the application the documents that the
Franchise Tax Board determines to be necessary to substantiate the
amount of sales and use taxes paid and the date that the qualified
property was placed in service in this state. Upon the receipt of the
application, the Franchise Tax Board shall notify the qualified
taxpayer that the Franchise Tax Board has reserved the credit for the
taxpayer, pending receipt of a timely filed tax return for the
taxable year.
(h) (1) (A) The total amount of credit that may be allocated
pursuant to this section and Section 17053.49 shall not exceed one
hundred million dollars ($100,000,000), hereafter the "baseline
amount."
(B) For each taxable year beginning on or after January 1, 2012,
the Franchise Tax Board shall recompute the baseline amount. That
computation shall be made as follows:
(i) The Department of Industrial Relations shall transmit annually
to the Franchise Tax Board the percentage change in the California
Consumer Price Index for all items from June of the prior calendar
year to June of the current calendar year, no later than August 1 of
the current calendar year.
(ii) The Franchise Tax Board shall do both of the following:
(I) Compute an inflation adjustment factor by adding 100 percent
to the percentage change figure that is furnished pursuant to clause
(i) and dividing the result by 100.
(II) Multiply the preceding taxable year baseline amount by the
inflation adjustment factor determined in subclause (I) and round off
the resulting products to the nearest one dollar ($1).
(2) Once the credits allocated for qualified property exceed the
limit established in paragraph (1), the Franchise Tax Board shall
establish a wait list for subsequently received reservations, with an
order of priority based on the date reservation was received by the
Franchise Tax Board. The Franchise Tax Board shall notify taxpayers
on the wait list no later than December 31 of the taxable year for
which the credit was applied as to whether they have been allocated a
credit and the amount allocated.
(i) (1) Upon receipt of the information described in subdivision
(g), the Franchise Tax Board shall allocate the credit to the
taxpayer on a first-come-first-served basis.
(2) (A) Except as provided in subparagraph (B), the qualified
taxpayer shall claim the credit on a timely filed original return.
(B) Qualified taxpayers on the wait list, as described in
paragraph (2) of subdivision (h), that are allocated a credit may
claim the credit on an amended income tax return for that taxable
year.
(3) The date the information described in subdivision (g) is
received shall be determined by the Franchise Tax Board.
(j) The Franchise Tax Board may prescribe, by forms, instructions,
published notices, or regulations, any requirements necessary for
the efficient administration of this section.
(k) This section shall remain in effect until December 1, 2016,
and as of that date is repealed.
SEC. 4. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
