AB 1278 by by Assembly member Jerry Hill seeks to restrict employers’ access to Enterprise Zone tax credits if they relocate to a zone from within California. The following is a new amendment that was just introduced that is even more restrictive to the taxpayer and is reflective of a policy change introduced by the Governor in his May budget revision:
(k) (1) Notwithstanding subdivision (a), if a taxpayer relocated to an enterprise zone from within the state during any taxable year beginning on or after January 1, 2011, the taxpayer shall be allowed a credit for the taxable year only with respect to qualified wages paid for each net increase in qualified employees, and only if the taxpayer makes each employee at the previous location or locations a written bona fide offer of employment at the new location.
(2) The net increase in employees of a taxpayer shall be determined as provided by this subdivision:
(A) The net increase in employees shall be determined by subtracting from the amount determined in subparagraph (C) the amouD.t determined in subparagraph (B).
(B) The total number ofemployees employed in the state in the preceding taxable year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year.
(C) The total number ofemployees employed in the state In the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year.