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Business Taxes Law Guide – Revision 2022
 

Sales And Use Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 1. Sales and Use Taxes
Chapter 7. Overpayments and Refunds

Article 1. Claim for Refund

Section 6902.10


6902.10. Small business hiring credit II, application. (a) Unless the context otherwise requires, the definitions set forth in Sections 17053.71 and 23628 govern the construction of this section.

(b) A qualified small business employer shall submit an application to the department in a form and manner prescribed by the department for a tentative credit reservation amount for the small business hiring tax credit allowed to a qualified small business employer pursuant to Section 17053.71 or 23628, or both.

(c) The application shall include all of the following:

(1) The net increase in qualified employees, as determined pursuant to subdivision (c) of Section 17053.71 or subdivision (c) of Section 23628.

(2) (A) If the credit will be applied under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), or both.

(B) If the qualified small business employer makes an irrevocable election to apply the credit against qualified sales and use taxes pursuant to Section 6902.9 in lieu of claiming the credit allowed by Section 17053.71 or 23628. An election under this subparagraph shall be allowed only for a qualified small business employer with an active seller’s permit or active certificate of registration-use tax. The election shall not be amended by the qualified small business employer or converted entity.

(3) If the applicant makes the election to apply the credit against qualified sales and use taxes as described in subparagraph (B) of paragraph 2, the qualified small business employer’s active seller’s permit number or active certificate of registration-use tax number.

(4) Valid state employer identification number of the qualified small business employer.

(5) Any other information and documentation as deemed necessary by the department.

(d) (1) Qualified small business employers shall submit, and the department shall accept, applications for tentative credit reservation amounts during the period beginning November 1, 2021, and ending November 30, 2021, or an earlier date determined by the department when the maximum cumulative total allocation limit in subdivision (e) is reached.

(2) Applications shall not be accepted by the department after November 30, 2021, or any other date determined by the department.

(3) The date and time an application is received shall be determined by the department. The determination of the department with respect to the date and time an application is received shall not be reviewed in any administrative or judicial proceeding.

(e) (1) The aggregate amount of credit that may be allocated pursuant to Sections 6902.9, 17053.71, and 23628 shall not exceed the cumulative total of seventy million dollars ($70,000,000) plus any amount of credit not allocated, and not required to be allocated, pursuant to subdivision (e) of Section 6902.8.

(2) The department shall allocate a tentative credit reservation to qualified small business employers on a first-come-first-served basis. For each application received, the total amount of credit available for allocation shall be reduced by an amount equal to the allocated tentative credit reservation amount.

(3) The tentative credit reservation amount per qualified small business employer shall be equal to the amount calculated pursuant to subparagraph (A) minus the amount calculated pursuant to subparagraph (B).

(A) The amount, not exceeding one hundred fifty thousand dollars ($150,000), that is equal to the net increase in qualified employees, as reported on the application, multiplied by one thousand dollars ($1,000).

(B) If the qualified small business employer received a tentative credit reservation amount pursuant to Section 6902.8, either of the following:

(i) For a qualified small business employer that made an irrevocable election pursuant to Section 6902.8 to apply the credit against qualified sales and use taxes pursuant to Section 6902.7, the credit amounts allocated to the qualified small business employer pursuant to Sections 6902.7 and 6902.8.

(ii) For a qualified small business employer that elected to apply the credit under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), or both, the tentative credit reservation amount received by the qualified small business employer pursuant to Section 6902.8.

(4) The department shall, within 30 days of receiving the application, notify the applicant of the tentative credit reservation amount. The amount allocated shall not constitute a determination by the department with respect to any of the requirements of this section or eligibility for the credit authorized by Section 6902.9, 17053.71, or 23628.

(5) The department shall periodically provide on its website the aggregate allocated tentative credit reservation amount under Sections 6902.9, 17053.71, and 23628 and the remaining credit amount available for allocation.

(6) The department may revise, on or before March 30, 2022, a qualified small business employer’s election to apply a credit against qualified sales and use taxes and instead apply the credit to taxes administered pursuant to Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001), or both, if the qualified small business employer’s seller’s permit or certificate of registration-use tax has been suspended, revoked, canceled, or closed.

(7) (A) The department shall cancel or reduce a qualified small business employer’s tentative credit reservation amount if the qualified small business employer fails to provide application information or documentation required by subdivision (c) to the department within 15 calendar days after the department requests the information.

(B) Notwithstanding subparagraph (A), the department may reduce a qualified small business employer’s tentative credit reservation amount for clerical errors or upon request by the applicant.

(8) (A) Tentative credit reservation amounts that become available on and after December 1, 2021, and before April 1, 2022, shall be made available to qualified small business employers and converted entities that applied for a tentative credit reservation amount pursuant to subdivision (a) but did not receive a tentative credit reservation amount because the aggregate amount of tentative credit reservations applied for pursuant to Sections 6902.9, 17053.71, and 23628 exceeded the cumulative total described in paragraph (1).

(B) Tentative credit reservation amounts made available pursuant to subparagraph (A) shall be made available to qualified small business employers and converted entities on a first-come-first-served basis based on the order in which the application was received.

(f) Notwithstanding Section 7056, the department shall provide the Franchise Tax Board, in the form and manner agreed upon by the department and the Franchise Tax Board, any and all information provided by each applicant pursuant to subdivision (c) and any other information deemed necessary by the department and the Franchise Tax Board to administer and enforce this section and Sections 17053.71 and 23268.

(g) The department may prescribe, adopt, and enforce emergency regulations as necessary to implement, administer, and enforce its duties under this section. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption.

History—Added by Stats. 2021, Ch. 82 (AB 150), in effect July 16, 2021.