Income taxes: credit: apprentices.
The primary impact of AB 361 is its proposal to enhance workforce training in the state by providing fiscal incentives to employers who engage apprentices. By reducing the net tax burden for businesses that train apprentices, the bill encourages more companies to participate in apprenticeship programs approved by the Division of Apprenticeship Standards. This initiative is expected to bolster the local economy and contribute to the growth of a skilled workforce, meeting both current and future labor demands in various industries.
Assembly Bill 361, introduced by Assembly Member Cervantes, aims to incentivize the training of apprentices through a tax credit system in California. Specified under Sections 17053.11 and 23667 of the Revenue and Taxation Code, the bill establishes a credit of $1,000 per registered apprentice employed by a taxpayer for more than seven months during a taxable year. The maximum allowable credit per taxable year is capped at $10,000 for each taxpayer and is applicable for taxable years starting on or after January 1, 2018, and before January 1, 2023. Notably, this bill takes effect immediately and is categorized as a tax levy.
The sentiment surrounding AB 361 appears largely supportive among legislators and industry stakeholders who view the bill as a positive move towards strengthening the state's workforce development. Supporters argue that providing tax credits will motivate employers to invest in training new workers, directly addressing skills shortages in critical sectors. However, some concerns may remain among those who question the sufficiency of oversight in such programs and the effectiveness of tax incentives in ensuring quality training.
While there appears to be broad support for the objectives of AB 361, potential points of contention could arise regarding how effectively the bill is implemented and the criteria for qualifying apprenticeships. Critics may express caution regarding the actual impact on business behavior and whether the credits will translate into meaningful job creation and skills development. Additionally, there may be concerns about the temporary nature of the tax credits, set to expire on December 1, 2023, which could limit the long-term planning abilities of participating businesses.