Economic development: taxation: credits: exemption.

Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, and provides various exemptions from those taxes. Existing law exempts from those taxes, on and after July 1, 2014, and before January 1, 2019, the gross receipts from the sale of, and the storage, use, or other consumption of, qualified tangible personal property purchased by a qualified person for use primarily in manufacturing, processing, refining, fabricating, or recycling of property, as specified; qualified tangible personal property purchased for use by a contractor for specified purposes, as provided; and qualified tangible personal property purchased for use by a qualified person to be used primarily in research and development, as provided, and until January 1, 2021, the gross receipts from the sale of, and the storage, use, or other consumption of, qualified tangible personal property purchased by a qualified person for those purposes for use within a designated census tract or a former enterprise zone. Existing law specifies that this exemption does not apply to local sales and use taxes, transactions and use taxes, and specified state taxes from which revenues are deposited into the Local Public Safety Fund, the Education Protection Account, the Local Revenue Fund, the Fiscal Recovery Fund, or the Local Revenue Fund 2011. This bill would extend the application of the exemption from January 1, 2019, to July 1, 2022, and eliminate the requirement that, after January 1, 2019, the qualified tangible personal property purchased by a qualified person for those purposes for use within a designated census tract or a former enterprise zone. The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including hiring credits within the specified economic development areas, and a hiring credit for taxpayers, other than those allowed a credit with respect to operating in the specified economic development areas. This bill would, under both laws for taxable years beginning on or after January 1, 2014, and before January 1, 2021, revise the definitions of "qualified full-time employee," "qualified taxpayer," and "small business" for the credit against those taxes for portions of the wages paid by a taxpayer, engaged in a trade or business within a designated census tract, as defined, or an economic development area, to certain full-time employees who provide services for that taxpayer in connection with that trade or business. This bill would additionally expand the definition of "qualified wages" for qualified full-time employees within a designated pilot area, as provided. Existing law also allows a credit against tax under both laws for each taxable year beginning on or after January 1, 2014, and before January 1, 2025, in an amount as provided in a written agreement between the Governor's Office of Business and Economic Development and the taxpayer, agreed upon by the California Competes Tax Credit Committee, and based on specified factors, including the number of jobs the taxpayer will create or retain in the state and the amount of investment in the state by the taxpayer. Existing law limits the aggregate amount of credits allocated to taxpayers to a specified sum per fiscal year. This bill would make specifications regarding the fiscal year allocation under these provisions of credit amounts and the taxable years for which the allocated amounts may be claimed as a credit allowed to taxpayers. This bill would also restate the carryover period of certain tax credits that were amended by AB 93 of the 2013–14 Regular Session and the operation of existing law with respect to those carryover credits. This bill would make the operation of its modifications and revisions contingent on the enactment of AB 93 of the 2013–14 Regular Session, as specified. This bill would declare that it is to take effect immediately as an urgency statute.