AB 103 is the budget trailer bill that would implement the Governor’s tax proposals including major changes to the Enterprise Zone program introduced in his May Revise. New amendments to the bill are in print today and include some technical changes to what we saw back in May. As was indicated in budget subcommittee hearings, further modifications proposed by the Labor Federation have been incorporated into the bill.
I was able to identify three new proposals in the bill that are all to the detriment of employers who might want to take advantage of the modified program:
1. The bill requires that businesses claiming the new credit will be required to provide FTB with unspecified information under penalty of perjury to demonstrate compliance.
2. The bill says that for purposes of determining if the taxpayer meets the increase in full-time jobs requirement, this will be calculated for each Enterprise Zone separately.
3. There is a new requirement that if a business moves into an Enterprise Zone and over a 24-month period before beginning business operations in the zone, the businesses statewide, non-zone net employment is reduced, they will not be eligible to receive a hiring credit. For larger businesses that operate in a variety of locations, this will make the newly proposed credit even more difficult to access.