Bill Text: CA SB1372 | 2013-2014 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Corporation taxes: tax rates: publicly held corporations: credits.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2014-08-28 - Read third time. Refused passage. (Ayes 18. Noes 17. Page 4953.) [SB1372 Detail]

Download: California-2013-SB1372-Introduced.html

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BILL NUMBER: SB 1372	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senators DeSaulnier and Hancock

                        FEBRUARY 21, 2014

   An act to amend Section 17151 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1372, as introduced, DeSaulnier. Personal income tax:
educational assistance credit.
   The Personal Income Tax Law provides for an exclusion from the
gross income of an employee for amounts paid or incurred by an
employer for educational assistance to the employee, as specified, up
to $5,250 during a calendar year.
   This bill would make technical, nonsubstantive changes to these
provisions.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17151 of the Revenue and Taxation Code is
amended to read:
   17151.  (a) Gross income of an employee does not include any
amounts, not exceeding an aggregate amount of five thousand two
hundred fifty dollars ($5,250) per calendar year, that is paid or
incurred by the employer for educational assistance to the employee
pursuant to an educational assistance program.
   (b) For purposes of this section, the following definitions shall
apply:
   (1) "Educational assistance" means the payment by an employer of
expenses incurred  by or on behalf of   by,
  or on behalf of,  an employee for the employee's
education, and includes, but is not limited to, payments for books,
supplies, equipment, tuition, and fees, and similar payments.
"Educational assistance" includes the provision by an employer of
courses of instruction for an employee, including the provision of
books, supplies, and equipment. "Educational assistance" does not
include any payment for, or the provision of, any of the following:
   (A) Any tools or supplies that may be retained by the employee
after completion of a course of instruction.
   (B) Any meals, lodging, or transportation.
   (C) Any course or education involving sports, games, or hobbies.
   (D) Any course or education taken at the graduate level of a kind
normally taken by an individual pursuing a program leading to a law,
business, medical, or other advanced academic or professional degree.
This subparagraph applies only to any course or education taken at
the graduate level beginning after June 30, 1996, and before January
1, 2000.
   (2) "Educational assistance program" means a separate written plan
of an employer for the exclusive benefit of his or her employees to
provide those employees with educational assistance. The program
shall meet the following requirements:
   (A) The program benefits employees who qualify under a
classification established by the employer and found by the Franchise
Tax Board not to be discriminatory in favor of employees who are
highly compensated employees (within the meaning of Section 414(q) of
the Internal Revenue Code) or their dependents. For purposes of this
subparagraph, there shall be excluded from consideration employees
who are not included in the program and who are included in a unit of
employees covered by an agreement that the Franchise Tax Board finds
to be a collective bargaining agreement between employee
representatives and one or more employers, if there is evidence that
educational assistance benefits were the subject of good faith
bargaining between the employee representatives and the employer or
employers.
   (B) Not more than 5 percent of the amounts paid or incurred by the
employer for educational assistance during the year may be provided
for the class of individuals who are owners (or their spouses or
dependents), each of whom, on any day of the year, owns more than 5
percent of the capital or profits interest in the employer.
   (C) The program does not provide eligible employees with a choice
between educational assistance and other remuneration includable in
gross income. For purposes of this section, the business practices of
the employer, as well as the written program, shall be taken into
account.
   (D) The program need not be funded.
   (E) Reasonable notification of the availability and terms of the
program is provided to eligible employees.
   (3) "Employee" includes self-employed individuals within the
meaning of Section 401(c)(1) of the Internal Revenue Code.
   (c) For purposes of this section:
   (1) Any individual who owns the entire interest in an
unincorporated trade or business shall be treated as his or her own
employee.
   (2) A partnership shall be treated as the employer of each partner
who is an employee within the meaning of paragraph (3) of
subdivision (b).
   (3) (A) An educational assistance program shall not be considered
to fail to meet any of the requirements of paragraph (2) of
subdivision (b) on the sole basis of either of the following:
   (i) Different utilization rates for the different types of
educational assistance made available under the program.
   (ii) Successful completion or attainment of a particular course
grade is required for or considered in determining reimbursement
under the program.
   (B) This section shall not be construed to affect the deduction or
inclusion in income of amounts that are paid or incurred or received
as reimbursement for educational expenses under Section 117, 162, or
212 of the Internal Revenue Code.
   (d)  No   A  deduction or credit shall
 not  be allowed to the employee with respect to any amount
that the employee excludes from income pursuant to this section.
   (e) Section 127 of the Internal Revenue Code shall not apply.
   (f) This section shall apply with respect to expenses relating to
courses beginning after June 30, 1996.