Bill Text: CA AB259 | 2021-2022 | Regular Session | Amended

California Assembly Bill 259 (Prior Session Legislation)

Bill Title: Protecting Our Restaurants Tax Credit.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2022-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB259 Detail]

Download: California-2021-AB259-Amended.html

Amended IN Assembly March 08, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 259

Introduced by Assembly Member Davies

January 15, 2021

An act to add and repeal ~~Section~~ Sections 17054.32 and 23632 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

AB 259, as amended, Davies. Protecting Our Restaurants Tax Credit.

The Personal Income Tax Law and the Corporation Tax Law ~~allows~~ allow various credits against the tax imposed by that law. Existing law requires any bill authorizing a new tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.

This bill would allow a credit under the Personal Income Tax Law for taxable years beginning on or after January 1, 2020, and before January 1, 2021, to a qualified taxpayer, as defined, in an amount equal to 50% of the annual fee paid or incurred by the qualified taxpayer for an alcohol license for a qualified establishment during that taxable year. The bill would also allow a credit under the Corporation Tax Law for taxable years beginning on or after January 1, 2020, ~~but~~ and before January 1, ~~2022,~~ 2021, to a qualified taxpayer, as defined, in an amount equal to 50% of the annual fee paid or incurred by an owner or operator of the qualified taxpayer for an alcohol license, as defined, during that taxable year. The bill would include additional information required for any bill authorizing a new ~~income~~ tax credit. The bill would also make related findings and declarations.

This bill would take effect immediately as a tax levy.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

This act shall be known, and may be cited, as the Protecting Our Restaurants Tax Credit.

SEC. 2.

The Legislature finds and declares both of the following:

(a) Restaurants have faced a significant financial burden as a result of local ordinances closing businesses due to the COVID-19 pandemic.

(b) Financial assistance must be provided to reduce the number of restaurants that must permanently close because of a lack of profit and wages earned as a result of fewer customers.

SEC. 3.

Section 17054.32 is added to the Revenue and Taxation Code, to read:

17054.32.
(a) For taxable years beginning on or after January 1, 2020, and before January 1, 2021, there shall be allowed a credit against the “net tax,” as defined by Section 17039, an amount equal to 50 percent of the annual fee paid or incurred by a qualified taxpayer for an alcohol license for a qualified establishment during that taxable year.
(b) For purposes of this section, both of the following definitions apply:
(1) “Alcohol license” means a Type 41 or Type 47 license, as described in paragraphs (31) and (37), respectively, of subdivision (b) of Section 23320 of the Business and Professions Code.
(2) “Qualified establishment” means an establishment that has received an alcohol license.
(3) “Qualified taxpayer” means a taxpayer that owns or operates a qualified establishment.
(c) This credit shall be in lieu of any other deduction that the qualified taxpayer may otherwise claim pursuant to this part with respect to the costs paid or incurred by a taxpayer for an alcohol license or permit fee.
(d) This section shall remain in effect only until December 1, 2022, and as of that date is repealed.

SEC. 3.SEC. 4.

Section 23632 is added to the Revenue and Taxation Code, to read:

23632.

(a) For taxable years beginning on or after January 1, 2020, ~~but~~ and before January 1, ~~2022,~~ 2021, there shall be allowed a credit against the “tax,” as defined by Section 23036, an amount equal to 50 percent of the annual fee paid or incurred by an owner or operator of the qualified taxpayer for an alcohol license during that taxable year.

(b) For purposes of this section, both of the following definitions apply:

(1) “Alcohol license” means a Type 41 or Type 47 license, as described in paragraphs (31) and (37), respectively, of subdivision (b) of Section 23320 of the Business and Professions Code.

(2) “Qualified taxpayer” means an establishment that has received an alcohol license.

(c) This credit shall be in lieu of any other deduction that the qualified taxpayer may otherwise claim pursuant to this part with respect to the costs paid or incurred by a taxpayer for an alcohol license or permit fee.

(d) This section shall remain in effect only until December 1, 2022, and as of that date is repealed.

SEC. 4.SEC. 5.

For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Sections 17054.32 and 23632 of the Revenue and Taxation Code as added and repealed by this act (hereafter “the ~~credit”),~~ credits”), the Legislature finds and declares as follows:

(a) The specific goals, purposes, and objectives that the ~~credit~~ credits will achieve are as follows:

(1) To relieve part of the significant financial burden that restaurants have faced as a result of local ordinances closing businesses due to the COVID-19 pandemic.

(2) To reduce the number of restaurants that must permanently close because of a lack of profit and wages earned due to fewer customers.

(b) Detailed performance indicators for the Legislature to use in determining whether the ~~credit meets~~ credits meet those goals, purposes, and objectives shall be the number of taxpayers receiving the ~~credit.~~ credits.

(c) The Legislative Analyst shall collaborate with the Franchise Tax Board to review the effectiveness of the credit and shall publish its findings by December 1, ~~2023.~~ 2022. The review shall include, but is not limited to, an analysis of the demand for the ~~credit~~ credits and the economic impact of the credit.

(d) The data collection requirements for determining whether the ~~credit is~~ credits are meeting, failing to meet, or exceeding those specific goals, purposes, and objectives are as follows:

(1) To assist the Legislature in determining whether the ~~credit meets~~ credits meet the goals, purposes, and objectives specified in subdivision (a), and in carrying out their duties under subdivision (c), the Legislative Analyst may request information from the Franchise Tax Board.

(2) (A) The Franchise Tax Board shall provide any data requested by the Legislative Analyst pursuant to this subdivision.

(B) The disclosure provisions of this paragraph shall be treated as an exception to Section 19542 under Article 2 (commencing with 19542) of Chapter 7 of Part 10.2 of Division 2 of the Revenue and Taxation Code.