Income taxes: credits: supplier diversity goals.

The Personal Income Tax Law and the Corporation Tax Law authorize various credits against the taxes imposed by those laws. Existing law requires any bill authorizing a new income tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements, as provided. This bill would require a taxpayer allowed a credit, which is enacted and becomes effective on or after January 1, 2018, against those taxes to meet supplier diversity goals by procuring supplies from business entities with certifications from certain entities, prior to claiming the credit in the first, 3rd, and 5th taxable years. The bill would exclude taxpayers who are individuals and specified small businesses from the supplier diversity goal requirement. Under the bill, for each taxable year that the supplier diversity goal is not fully met but the taxpayer has achieved a goal of at least 5% overall or at least 50% of its goal for the taxable year, whichever is greater, the percentage of the goal achieved would be the percentage of the tax credit awarded. The bill would require the Franchise Tax Board to audit compliance with these requirements and would require a taxpayer under audit to pay for the cost of the audit. The bill would also authorize the Franchise Tax Board to impose substantial penalties on taxpayers who are not compliant with these requirements.