SB 665

SB665:v98#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill

No. 665

An act to add and repeal Sections 17053.89 and 23683 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

SB 665, as amended, Choi. Personal Income Tax Law: Corporation Tax Law: credits: retail security measures.

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, 2025, and before January 1, 2030, would allow a credit against those taxes to a qualified taxpayer, as defined, for retail theft prevention measures, as specified. The bill would limit the credit allowed to a taxpayer to no more than $10,000 per taxable year.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill also would include additional information required for any bill authorizing a new tax expenditure.

This bill would take effect immediately as a tax levy.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 17053.89 is added to the Revenue and Taxation Code, to read:

17053.89.

(a) For taxable years beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed as a credit against the “net tax,” as that term is defined in Section 17039, an amount equal to the qualified expenditures of a qualified taxpayer during the taxable year, not to exceed ten thousand dollars ($10,000).

(b) For purposes of this section, the following definitions shall apply:

(1) “Annual full-time equivalent employee” mean either of the following:(A) In the case of a full-time employee paid hourly wages, “annual full-time equivalent” means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000.(B) In the case of a salaried full-time employee, “annual full-time equivalent” means the total number of weeks worked for the qualified taxpayer by the employee divided by 52.

(1)

(2) “Qualified expenditure” shall mean an expense paid or incurred by the qualified taxpayer that is directly related to retail theft prevention measures that exceed the following:

(A) In the case of a qualified taxpayer with 25 or fewer annual full-time equivalent employees, three hundred dollars ($300) at a retail location in the state.

(B) In the case of a qualified taxpayer with more than 25 annual full-time equivalent employees, five hundred dollars ($500) at a retail location in the state.

(2)

(3) “Qualified taxpayer” shall mean a taxpayer that is primarily engaged in a retail trade, as described in Codes 441 to 459999, inclusive, of the North American Industry Classification System published by the United States Office of Management and Budget, 2022 edition.

(3)

(4) “Retail theft prevention measures” shall include, but not be limited to, the following:

(A)Security officers registered under the Private Security Services Act (Chapter 11.5 (commencing with Section 7580) of Division 3 of the Business and Professions Code).

(B)

(A) Security cameras.

(C)

(B) Perimeter security lighting.

(D)

(C) Locking or hardening mechanisms.

(E)

(D) Alarm systems.

(F)

(E) Access control systems.

(G)

(F) Exterior license plate reader technology.

(c) If any credit allowed by this section is claimed by the taxpayer, any deduction otherwise allowed under this part for that amount of the cost paid or incurred by the taxpayer which is eligible for the credit that is claimed shall be reduced by the amount of the credit allowed.

(d) (1)The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.

(2)The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section, including any regulations to prevent improper claims from being filed and to provide adequate substantiation of expenditures.

(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding seven years, if necessary, until the credit is exhausted.

(e)

(f) (1) For purposes of complying with Section 41 as it pertains to the credit allowed pursuant to this section and Section 23683, the Legislature finds and declares the following:

(A) The specific goal of the credit is to support local retailers in their efforts to prevent theft.

(B) The performance indicators for the Legislature to use in determining whether the credit achieves the stated goal shall be the number of taxpayers claiming the credit, and the total dollar value amount of credits allowed.

(2) (A) No later than December 1, 2026, April 1, 2028, and annually thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers claiming the credit, and the total dollar value amount of credits allowed.

(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.

(f)

(g) This section shall remain operative only until December 1, 2030, and as of that date is repealed.

SEC. 2.

Section 23683 is added to the Revenue and Taxation Code, to read:

23683.

(a) For taxable years beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed as a credit against the “tax,” as that term is defined in Section 23036, an amount equal to the qualified expenditures of a qualified taxpayer during the taxable year, not to exceed ten thousand dollars ($10,000).

(b) For purposes of this section, the following definitions shall apply:

(1) “Annual full-time equivalent employee” mean either of the following:(A) In the case of a full-time employee paid hourly wages, “annual full-time equivalent” means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000.(B) In the case of a salaried full-time employee, “annual full-time equivalent” means the total number of weeks worked for the qualified taxpayer by the employee divided by 52.

(1)

(2) “Qualified expenditure” shall mean an expense paid or incurred by the qualified taxpayer that is directly related to retail theft prevention measures that exceed the following:

(A) In the case of a qualified taxpayer with 25 or fewer annual full-time equivalent employees, three hundred dollars ($300) at a retail location in the state.

(B) In the case of a qualified taxpayer with more than annual full-time equivalent 25 employees, five hundred dollars ($500) at a retail location in the state.

(2)

(3) “Qualified taxpayer” shall mean a taxpayer that is primarily engaged in a retail trade, as described in Codes 441 to 459999, inclusive, of the North American Industry Classification System published by the United States Office of Management and Budget, 2022 edition.

(3)

(4) “Retail theft prevention measures” shall include, but not be limited to, the following:

(A)Security officers registered under the Private Security Services Act (Chapter 11.5 (commencing with Section 7580) of Division 3 of the Business and Professions Code).

(B)

(A) Security cameras.

(C)

(B) Perimeter security lighting.

(D)

(C) Locking or hardening mechanisms.

(E)

(D) Alarm systems.

(F)

(E) Access control systems.

(G)

(F) Exterior license plate reader technology.

(c) If any credit allowed by this section is claimed by the taxpayer, any deduction otherwise allowed under this part for that amount of the cost paid or incurred by the taxpayer which is eligible for the credit that is claimed shall be reduced by the amount of the credit allowed.

(d) (1)The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.

(2)The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section, including any regulations to prevent improper claims from being filed and to provide adequate substantiation of expenditures.

(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding seven years, if necessary, until the credit is exhausted.

(e)

(f) This section shall remain operative only until December 1, 2030, and as of that date is repealed.

SEC. 3.

This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.