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California Assembly Bill AB976

California 2025-2026 Regular Session

California Assembly Bill AB976 Compare Versions

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1-Amended IN Assembly April 28, 2025 Amended IN Assembly March 14, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 976Introduced by Assembly Member vila FarasFebruary 20, 2025An act to add and repeal Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTAB 976, as amended, vila Faras. Personal Income Tax Law: Corporation Tax Law: California Retail Security Tax Credit.The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to a business operating in a disadvantaged community, as described, with total gross annual receipts of no greater than $5,000,000, with 25 or fewer employees in an amount equal to the taxpayers qualified retail theft prevention measure expenses at retail locations in the state, not to exceed $4,000 per taxable year, and subject to a credit reservation by the California Tax Credit Allocation Committee, Franchise Tax Board, as specified. The bill would limit the total amount of tax credits allocated per taxable year to $10,000,000.Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, 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 include findings and reporting requirements in compliance with this requirement.This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. The credits allowed by Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, as added by this act, shall be known, and may be cited, as the California Retail Security Tax Credit. SEC. 2. Section 17053.77 is added to the Revenue and Taxation Code, to read:17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.SEC. 3. Section 23621.5 is added to the Revenue and Taxation Code, to read:23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.SEC. 4. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
1+Amended IN Assembly March 14, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 976Introduced by Assembly Member vila FarasFebruary 20, 2025An act to add and repeal Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTAB 976, as amended, vila Faras. Personal Income Tax Law: Corporation Tax Law: California Retail Security Tax Credit.The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to a business with 50 operating in a disadvantaged community, as described, with total gross annual receipts of no greater than $5,000,000, with 25 or fewer employees in an amount equal to the taxpayers qualified retail theft prevention measure expenses at retail locations in the state, not to exceed $4,000 per taxable year, and subject to a credit reservation by the California Tax Credit Allocation Committee, as specified. The bill would limit the total amount of tax credits allocated per taxable year to $10,000,000.Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, 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 include findings and reporting requirements in compliance with this requirement.This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. The credits allowed by Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, as added by this act, shall be known, and may be cited, as the California Retail Security Tax Credit. SEC. 2. Section 17053.77 is added to the Revenue and Taxation Code, to read:17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.SEC. 3. Section 23621.5 is added to the Revenue and Taxation Code, to read:23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.SEC. 4. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
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3-Amended IN Assembly April 28, 2025 Amended IN Assembly March 14, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 976Introduced by Assembly Member vila FarasFebruary 20, 2025An act to add and repeal Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTAB 976, as amended, vila Faras. Personal Income Tax Law: Corporation Tax Law: California Retail Security Tax Credit.The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to a business operating in a disadvantaged community, as described, with total gross annual receipts of no greater than $5,000,000, with 25 or fewer employees in an amount equal to the taxpayers qualified retail theft prevention measure expenses at retail locations in the state, not to exceed $4,000 per taxable year, and subject to a credit reservation by the California Tax Credit Allocation Committee, Franchise Tax Board, as specified. The bill would limit the total amount of tax credits allocated per taxable year to $10,000,000.Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, 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 include findings and reporting requirements in compliance with this requirement.This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
3+ Amended IN Assembly March 14, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 976Introduced by Assembly Member vila FarasFebruary 20, 2025An act to add and repeal Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTAB 976, as amended, vila Faras. Personal Income Tax Law: Corporation Tax Law: California Retail Security Tax Credit.The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to a business with 50 operating in a disadvantaged community, as described, with total gross annual receipts of no greater than $5,000,000, with 25 or fewer employees in an amount equal to the taxpayers qualified retail theft prevention measure expenses at retail locations in the state, not to exceed $4,000 per taxable year, and subject to a credit reservation by the California Tax Credit Allocation Committee, as specified. The bill would limit the total amount of tax credits allocated per taxable year to $10,000,000.Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, 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 include findings and reporting requirements in compliance with this requirement.This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
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5-Amended IN Assembly April 28, 2025 Amended IN Assembly March 14, 2025
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7-Amended IN Assembly April 28, 2025
85 Amended IN Assembly March 14, 2025
96
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7+Amended IN Assembly March 14, 2025
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129 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
1310
1411 Assembly Bill
1512
1613 No. 976
1714
1815 Introduced by Assembly Member vila FarasFebruary 20, 2025
1916
2017 Introduced by Assembly Member vila Faras
2118 February 20, 2025
2219
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24-
2520 An act to add and repeal Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
2621
2722 LEGISLATIVE COUNSEL'S DIGEST
2823
2924 ## LEGISLATIVE COUNSEL'S DIGEST
3025
3126 AB 976, as amended, vila Faras. Personal Income Tax Law: Corporation Tax Law: California Retail Security Tax Credit.
3227
33-The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to a business operating in a disadvantaged community, as described, with total gross annual receipts of no greater than $5,000,000, with 25 or fewer employees in an amount equal to the taxpayers qualified retail theft prevention measure expenses at retail locations in the state, not to exceed $4,000 per taxable year, and subject to a credit reservation by the California Tax Credit Allocation Committee, Franchise Tax Board, as specified. The bill would limit the total amount of tax credits allocated per taxable year to $10,000,000.Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, 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 include findings and reporting requirements in compliance with this requirement.This bill would take effect immediately as a tax levy.
28+The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to a business with 50 operating in a disadvantaged community, as described, with total gross annual receipts of no greater than $5,000,000, with 25 or fewer employees in an amount equal to the taxpayers qualified retail theft prevention measure expenses at retail locations in the state, not to exceed $4,000 per taxable year, and subject to a credit reservation by the California Tax Credit Allocation Committee, as specified. The bill would limit the total amount of tax credits allocated per taxable year to $10,000,000.Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, 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 include findings and reporting requirements in compliance with this requirement.This bill would take effect immediately as a tax levy.
3429
3530 The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
3631
37-This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to a business operating in a disadvantaged community, as described, with total gross annual receipts of no greater than $5,000,000, with 25 or fewer employees in an amount equal to the taxpayers qualified retail theft prevention measure expenses at retail locations in the state, not to exceed $4,000 per taxable year, and subject to a credit reservation by the California Tax Credit Allocation Committee, Franchise Tax Board, as specified. The bill would limit the total amount of tax credits allocated per taxable year to $10,000,000.
32+This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to a business with 50 operating in a disadvantaged community, as described, with total gross annual receipts of no greater than $5,000,000, with 25 or fewer employees in an amount equal to the taxpayers qualified retail theft prevention measure expenses at retail locations in the state, not to exceed $4,000 per taxable year, and subject to a credit reservation by the California Tax Credit Allocation Committee, as specified. The bill would limit the total amount of tax credits allocated per taxable year to $10,000,000.
3833
3934 Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.
4035
4136 This bill would include findings and reporting requirements in compliance with this requirement.
4237
4338 This bill would take effect immediately as a tax levy.
4439
4540 ## Digest Key
4641
4742 ## Bill Text
4843
49-The people of the State of California do enact as follows:SECTION 1. The credits allowed by Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, as added by this act, shall be known, and may be cited, as the California Retail Security Tax Credit. SEC. 2. Section 17053.77 is added to the Revenue and Taxation Code, to read:17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.SEC. 3. Section 23621.5 is added to the Revenue and Taxation Code, to read:23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.SEC. 4. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
44+The people of the State of California do enact as follows:SECTION 1. The credits allowed by Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, as added by this act, shall be known, and may be cited, as the California Retail Security Tax Credit. SEC. 2. Section 17053.77 is added to the Revenue and Taxation Code, to read:17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.SEC. 3. Section 23621.5 is added to the Revenue and Taxation Code, to read:23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.SEC. 4. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
5045
5146 The people of the State of California do enact as follows:
5247
5348 ## The people of the State of California do enact as follows:
5449
5550 SECTION 1. The credits allowed by Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, as added by this act, shall be known, and may be cited, as the California Retail Security Tax Credit.
5651
5752 SECTION 1. The credits allowed by Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, as added by this act, shall be known, and may be cited, as the California Retail Security Tax Credit.
5853
5954 SECTION 1. The credits allowed by Sections 17053.77 and 23621.5 of the Revenue and Taxation Code, as added by this act, shall be known, and may be cited, as the California Retail Security Tax Credit.
6055
6156 ### SECTION 1.
6257
63-SEC. 2. Section 17053.77 is added to the Revenue and Taxation Code, to read:17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
58+SEC. 2. Section 17053.77 is added to the Revenue and Taxation Code, to read:17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
6459
6560 SEC. 2. Section 17053.77 is added to the Revenue and Taxation Code, to read:
6661
6762 ### SEC. 2.
6863
69-17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
64+17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
7065
71-17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
66+17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
7267
73-17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
68+17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5. (E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows: (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
69+
70+
7471
7572 17053.77. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the net tax, as defined in Section 17039, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.
76-
77-###### 17053.77.
7873
7974 (2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.
8075
8176 (b) For purposes of this section:
8277
8378 (1) Full-time equivalent employee shall be calculated as follows:
8479
8580 (A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.
8681
8782 (B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.
8883
8984 (C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.
9085
9186 (2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000), of any of the following equipment by the qualified taxpayer at a retail location in the state:
9287
9388 (A) Security cameras.
9489
9590 (B) Interior or exterior locking or hardening measures.
9691
9792 (C) Perimeter security lighting.
9893
9994 (D) Access control systems.
10095
10196 (E) Alarm systems.
10297
103-(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.
98+(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.
10499
105100 (c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 23621.5 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.
106101
107-(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.
102+(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.
108103
109-(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.
104+(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.
110105
111-(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:
106+(3) The California Tax Credit Allocation Committee shall do all of the following:
112107
113108 (A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.
114109
115110 (B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.
116111
117-(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.
112+(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.
118113
119114 (D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 23621.5.
120115
121-(E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.
116+(E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.
122117
123-(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.
118+(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.
124119
125120 (d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
126121
127122 (e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 23621.5, the Legislature finds and declares as follows:
128123
129124 (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.
130125
131126 (2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.
132127
133128 (3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 23621.5 for the most recent taxable year.
134129
135130 (f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
136131
137-SEC. 3. Section 23621.5 is added to the Revenue and Taxation Code, to read:23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
132+SEC. 3. Section 23621.5 is added to the Revenue and Taxation Code, to read:23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
138133
139134 SEC. 3. Section 23621.5 is added to the Revenue and Taxation Code, to read:
140135
141136 ### SEC. 3.
142137
143-23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
138+23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
144139
145-23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
140+23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
146141
147-23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
142+23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.(2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.(b) For purposes of this section:(1) Full-time equivalent employee shall be calculated as follows:(A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.(C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.(2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:(A) Security cameras.(B) Interior or exterior locking or hardening measures.(C) Perimeter security lighting.(D) Access control systems.(E) Alarm systems.(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.(c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.(3) The California Tax Credit Allocation Committee shall do all of the following:(A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.(B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.(D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.(E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.(e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:(1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.(2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.(3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.(f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
143+
144+
148145
149146 23621.5. (a) (1) For each taxable year beginning on or after January 1, 2026, and before January 1, 2028, there shall be allowed a credit against the tax, as defined in Section 23036, to a qualified taxpayer in an amount equal to the taxpayers qualified retail theft prevention measure expenses during the taxable year, subject to paragraph (2), that receives a tentative credit reservation pursuant to this section.
150-
151-###### 23621.5.
152147
153148 (2) The credit allowed by this section shall be equal to the amount received as a credit reservation pursuant to subdivision (c), not to exceed four thousand dollars ($4,000) per taxable year.
154149
155150 (b) For purposes of this section:
156151
157152 (1) Full-time equivalent employee shall be calculated as follows:
158153
159154 (A) An employee of a qualified taxpayer who works a minimum of 36 hours per week for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.
160155
161156 (B) An employee of the qualified taxpayer who works a minimum of 20 hours per week, but less than 36 hours per week, for each week the employee is employed by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one-half full-time equivalent employee.
162157
163158 (C) A salaried employee of the qualified taxpayer who was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer, at the qualified taxpayers retail location in the state, shall equal one full-time equivalent employee.
164159
165160 (2) Qualified retail theft prevention measure expenses means the purchase, that is incurred on or after the operative date of this section, in an amount of at least four thousand dollars ($4,000) of any of the following equipment by the qualified taxpayer at a retail location in the state:
166161
167162 (A) Security cameras.
168163
169164 (B) Interior or exterior locking or hardening measures.
170165
171166 (C) Perimeter security lighting.
172167
173168 (D) Access control systems.
174169
175170 (E) Alarm systems.
176171
177-(3) Qualified taxpayer means a business operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, as of January 1, 2026, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.
172+(3) Qualified taxpayer means a business that employs 50 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state. operating in a disadvantaged community, as described in Section 39711 of the Health and Safety Code, with total gross annual receipts of no greater than five million dollars ($5,000,000) that employs 25 or fewer total full-time equivalent employees who are employed for at least 40 weeks within the prior taxable year at one or more retail locations in the state.
178173
179174 (c) (1) The total aggregate amount of the credit that may be allocated by credit reservations per taxable year to all qualified taxpayers pursuant to this section and Section 17053.77 shall not exceed ten million dollars ($10,000,000), plus the unallocated credit amount, if any, from the preceding taxable year.
180175
181-(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, Franchise Tax Board, in the form and manner prescribed by the committee. board.
176+(2) (A) To be eligible for the credit allowed by this section, a qualified taxpayer shall request a credit reservation from the California Tax Credit Allocation Committee, in the form and manner prescribed by the committee.
182177
183-(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee. Franchise Tax Board.
178+(B) To obtain a credit reservation, the qualified taxpayer shall provide all necessary information, as determined by the California Tax Credit Allocation Committee.
184179
185-(3) The California Tax Credit Allocation Committee Franchise Tax Board shall do all of the following:
180+(3) The California Tax Credit Allocation Committee shall do all of the following:
186181
187182 (A) On or before January 1, 2026, publish on its internet website the application form required to obtain a credit reservation.
188183
189184 (B) On or before March 15, 2026, approve credit reservations for taxable years beginning on or after January 1, 2026, and before January 1, 2027, with respect to qualified taxpayers who submit an application for a credit reservation on or before February 1, 2026.
190185
191-(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee Franchise Tax Board shall reduce the amount of credit on a proportional basis.
186+(C) If credit reservation request amounts received on or before February 1, 2026, exceed the amount in paragraph (1), the California Tax Credit Allocation Committee shall reduce the amount of credit on a proportional basis.
192187
193188 (D) On or before March 15, 2026, or within 30 days of receipt of a credit reservation, whichever occurs later, notify qualified taxpayers of the credit reservation amount received pursuant to this section and Section 17053.77.
194189
195-(E) The California Tax Credit Allocation Committee Franchise Tax Board shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.
190+(E) The California Tax Credit Allocation Committee shall continue to accept and approve additional credit reservations received after February 1, 2026, for taxable years beginning on or after January 1, 2026, and before January 1, 2027, on a rolling basis until the annual cap specified in paragraph (1) is allocated.
196191
197-(4) The California Tax Credit Allocation Committee Franchise Tax Board shall repeat the process in paragraph (3) for the 2027 taxable year.
192+(4) The California Tax Credit Allocation Committee shall repeat the process in paragraph (3) for the 2027 taxable year.
198193
199194 (d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
200195
201196 (e) For purposes of complying with Section 41, as it applies to the credit allowed by this section and Section 17053.77, the Legislature finds and declares as follows:
202197
203198 (1) The specific goal, purpose, and objective of the retail security tax credit is to incentivize retail establishments to install security systems to protect their employees and deter theft.
204199
205200 (2) The performance indicator for the Legislature to use in determining if the security tax credit achieves its stated purpose is the number of qualified taxpayers allocated a tax credit pursuant to this section.
206201
207202 (3) No later than June 30, 2027, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax credit pursuant to this section and Section 17053.77 for the most recent taxable year.
208203
209204 (f) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.
210205
211206 SEC. 4. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
212207
213208 SEC. 4. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
214209
215210 SEC. 4. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
216211
217212 ### SEC. 4.