Laws, Regulations and Annotations
Business Taxes Law Guide – Revision 2023
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
6902.9. Small business hiring credit II. (a) For purposes of this section:
(1) "Converted entity" means a qualified small business employer that changed its business form to a different entity type and continues its operation.
(2) "Credit amount" means an amount equal to the credit amount that would otherwise be allowed to a qualified small business employer pursuant to Section 17053.71 or 23628 but for the irrevocable election made pursuant to Section 6902.10.
(3) "Qualified sales or use taxes" means sales and use taxes imposed by Part 1 (commencing with Section 6001) and Section 35 of Article XIII of the California Constitution, local sales and use taxes imposed in accordance with the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)), and local transactions and use taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)).
(4) “Qualified small business employer” has the same meaning as defined in Section 17053.71 or 23628.
(b) The department shall allow a qualified small business employer that received a tentative credit reservation pursuant to Section 6902.8 and that made an irrevocable election pursuant to Section 6902.8 to apply the small business hiring credit amount against qualified sales and use taxes imposed on the qualified small business employer, as follows:
(1) For monthly filers, the credit shall apply to amounts due and payable for the month commencing on March 1, 2022, ending on March 31, 2022, and due on April 30, 2022.
(2) For quarterly filers, the credit shall apply to amounts due and payable for the quarter commencing on January 1, 2022, ending on March 31, 2022, and due on April 30, 2022, including prepayments for the quarter required pursuant to Article 1.1 (commencing with Section 6470) of Chapter 5.
(3) For annual filers, fiscal year filers, or a qualified small business employer or converted entity on any other reporting basis, the credit shall apply to amounts due and payable on the first return due on or after April 30, 2022.
(c) Any excess credit shall be carried over and shall not be refunded as follows:
(1) If the credit amount exceeds the sales and use taxes due and payable, as described in subdivision (b), the department shall apply the excess credit against amounts due and payable for periods following those described in subdivision (b) on returns due and filed on or before April 30, 2027, including prepayments required pursuant to Article 1.1 (commencing with Section 6470) of Chapter 5.
(2) Any remaining excess credit amount after April 30, 2027, shall not be refunded and shall be forfeited.
(d) A qualified small business employer that becomes a converted entity subsequent to making the election to apply the credit against qualified sales and use taxes pursuant to Section 6902.10 may transfer any small business hiring credit and excess credit amounts to the converted entity and apply those amounts against the qualified sales and use taxes of the converted entity as specified in subdivisions (b) and (c).
(e) Interest shall not be paid on an amount credited pursuant to subdivision (b), (c), or (d).
(f) Section 6961 shall apply to a credit, or part thereof, that is erroneously allowed pursuant to this section.
(g) Notwithstanding Section 7056, the department shall provide information to the Franchise Tax Board, in a form and manner agreed upon by the department and the Franchise Tax Board, regarding both of the following:
(1) The qualified small business employers and converted entities that have been assigned a credit allowed under Sections 17053.71 and 23628 and have made an irrevocable election pursuant to Section 6902.10.
(2) The credit amount claimed by each qualified small business employer and converted entity.
(h) (1) Notwithstanding Section 13018 of the Unemployment Insurance Code, the Employment Development Department shall, upon request, provide the department in the form and manner agreed upon by the department and the Employment Development Department, any and all information deemed necessary by the department to administer and enforce this section and Section 6902.10.
(2) The department may share information provided pursuant to this subdivision with the Franchise Tax Board, upon request, as necessary to administer and enforce Sections 17053.71 and 23628.
(i) 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.