BILL NUMBER: SB 1272INTRODUCED BILL TEXT INTRODUCED BY Senator Runner FEBRUARY 18, 2016 An act to add and repeal Sections 17053.50 and 23650 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST SB 1272, as introduced, Runner. Income taxes: credit: small business employee savings plan. The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill would allow, for taxable years beginning on or after January 1, 2016, and before January 1, 2021, a tax credit under both laws in an amount equal to 50% of the qualified taxpayer's contributions to a qualified employee savings plan, 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 17053.50 is added to the Revenue and Taxation Code, to read: 17053.50. (a) For taxable years beginning on or after January 1, 2016, and before January 1, 2021, there shall be allowed to a qualified taxpayer a credit against the "net tax," as defined in Section 17039, in an amount equal to 50 percent of the qualified taxpayer's contributions to a qualified employee savings plan, not to exceed two thousand dollars ($2,000) per employee per taxable year. (b) For purposes of this section: (1) "Qualified employee savings plan" means an employee savings plan where at least half of the recipient employees earn less than forty thousand dollars ($40,000) in wages received from the qualified taxpayer per taxable year. (2) "Qualified taxpayer" means a taxpayer that is a small business as defined in Section 14837 of the Government Code. (c) This section shall remain in effect only until December 1, 2021, and as of that date is repealed. SEC. 2. Section 23650 is added to the Revenue and Taxation Code, to read: 23650. (a) For taxable years beginning on or after January 1, 2016, and before January 1, 2021, there shall be allowed to a qualified taxpayer a credit against the "net tax," as defined in Section 17039, in an amount equal to 50 percent of the qualified taxpayer's contributions to a qualified employee savings plan, not to exceed two thousand dollars ($2,000) per employee per taxable year. (b) For purposes of this section: (1) "Qualified employee savings plan" means an employee savings plan where at least half of the recipient employees earn less than forty thousand dollars ($40,000) in wages received from the qualified taxpayer per taxable year. (2) "Qualified taxpayer" means a taxpayer that is a small business as defined in Section 14837 of the Government Code. (c) This section shall remain in effect only until December 1, 2021, and as of that date is repealed. SEC. 3. (a) In accordance with Section 41 of the Revenue and Taxation Code, the purpose of the credit allowed by Sections 17053.50 and 23650 of the Revenue and Taxation Code, as added by Sections 1 and 2 of this act is to promote savings for employees, especially young and low-income workers who have no savings and no retirement options other than Social Security. To measure whether the credit achieves its intended purpose, on or before January 1, 2018, and each January 1 thereafter, the Franchise Tax Board shall annually prepare a written report to the Legislature of the following: (1) The percentage of employees under 30 years of age who are receiving matching funds. (2) The percentage of employees earning less than forty thousand dollars ($40,000) per annum who are receiving matching funds. (b) A report submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code. SEC. 4. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.