AB 2377: Personal Income Tax Law and Corporation Tax Law: deductions: accelerated depreciation for new manufacturing operations.

The Personal Income Tax Law and the Corporation Tax Law, in conformity or modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by those laws, including a deduction for depreciation of certain property put into the service of a trade or business.

This bill, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, would provide for an accelerated depreciation deduction of 50% or 100%, as applicable, of the adjusted basis, as specified, of qualified property, as defined, put into service by a qualified taxpayer, as defined, during the taxable year. The bill would require a qualified taxpayer to place qualified property with an adjusted basis of at least $1,000,000 into service in the state during the taxable year in order to be eligible for the accelerated depreciation deduction. The bill would require the qualified taxpayer to certify under penalty of perjury that qualified property put into service during the taxable year will be primarily used in the state for at least 3 years. By expanding the crime of perjury, this bill would impose a state-mandated local program.

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

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

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would take effect immediately as a tax levy.