BILL NUMBER: AB 1735AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 4, 2010 INTRODUCED BY Assembly Member Harkey ( Coauthors: Assembly Members Anderson, Jeffries, Miller, Silva, and Villines ) FEBRUARY 4, 2010 An act to add Sections 17053.13 and 23623.2 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST AB 1735, as amended, Harkey. Income tax credits: education and training. The Personal Income Tax Law and the Corporation Tax Law authorize various credits against the taxes imposed by those laws. This bill would, for each taxable year beginning on or after January 1, 2010, allow a credit under both laws in an amount equal to 50% of the amount of costs paid or incurred in connection with additional education and training for purposes of career advancement or retention, as specified. 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. This act shall be known and may be cited as the Back to School Tax Credit. SEC. 2. Section 17053.13 is added to the Revenue and Taxation Code, to read: 17053.13. (a) There shall be allowed as a credit against the "net tax," as defined in Section 17039, an amount equal to 50 percent of the costs paid or incurred by the taxpayer during the taxable year for education and training. (b) For purposes of this section "education and training" means both of the following: (1) Education or training provided to the taxpayer's employees to maintain or improve a skill required for the taxpayer's trade or business. (2) Education and training provided to the taxpayer in order to comply with the express requirements imposed by the taxpayer's employer or by laws or regulations as a condition of the taxpayer's retention of an established employment relationship, status, or rate of compensation. (c) In the case where the credit allowed by this section exceeds the"next"net tax," the excess may be carried over to reduce the"next"net tax" in the following year, and succeeding years if necessary, until the credit is exhausted. (d) No deduction shall be allowed to a taxpayer for the amount of qualified expenses for which a credit is allowed to that taxpayer under this section. SEC. 3. Section 23623.2 is added to the Revenue and Taxation Code, to read: 23623.2. (a) There shall be allowed as a credit against the "tax," as defined in Section 23036, an amount equal to 50 percent of the costs paid or incurred by the taxpayer during the taxable year for the education and training. (b) For purposes of this section "education and training" means both of the following: (1) Education or training provided to the taxpayer's employees to maintain or improve a skill required for the taxpayer's trade or business. (2) Education and training provided to the taxpayer in order to comply with the express requirements imposed by the taxpayer's employer or by laws or regulations as a condition of the taxpayer's retention of an established employment relationship, status, or rate of compensation. (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 years if necessary, until the credit is exhausted. (d) No deduction shall be allowed to a taxpayer for the amount of qualified expenses for which a credit is allowed to that taxpayer under this section. SEC. 4. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.