SB 665 California Senate · 2025-2026 Regular Session

Personal Income Tax Law: Corporation Tax Law: credits: retail security measures.

Summary

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, would allow a credit against those taxes to a qualified taxpayer, as defined, for retail theft prevention measures, as specified. The bill would limit the credit allowed to a taxpayer to no more than $10,000 per taxable year. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill also would include additional information required for any bill authorizing a new tax expenditure. This bill would take effect immediately as a tax levy.

Issues: ✓ Budget & Taxes

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 20, 2025 Last action Feb 2, 2026

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What changed between versions

02/20/25 - Introduced → 05/07/25 - Amended Senate · 4 edits · May 7, 2025

MODERATE

The Senate amendment to SB 665 makes three substantive changes to the retail theft prevention tax credit: it replaces the simple employee count with a more precise 'annual full-time equivalent' calculation that accounts for part-time workers, adds a seven-year carryover provision for unused credits, and inserts an additional interim reporting deadline of April 1, 2028. These changes make the credit more accessible to businesses with mixed full-time and part-time workforces and ensure small retailers who cannot use the full credit in one year are not left without a benefit.

DEFINITION

A new definition of 'annual full-time equivalent employee' is added to both the personal income tax and corporation tax sections. Hourly employees are counted as hours worked (capped at 2,000) divided by 2,000; salaried employees are counted as weeks worked divided by 52.

ELIGIBILITY

The employee threshold for determining the per-location expenditure floor ($300 vs $500) now uses 'annual full-time equivalent employees' instead of a simple headcount. This means a business with, say, 40 part-time workers each working half-time would count as 20 FTEs and qualify for the lower $300 threshold rather than the higher $500 threshold.

FISCAL

A new carryover provision allows any portion of the credit that exceeds the taxpayer's net tax in a given year to be carried forward and applied against net tax in the following year and up to seven succeeding years until exhausted. This applies to both the personal income tax credit (Section 17053.89) and the corporation tax credit (Section 23683).

TIMELINE

The Franchise Tax Board reporting deadline is changed from 'No later than December 1, 2026, and annually thereafter' to 'No later than December 1, 2026, April 1, 2028, and annually thereafter,' adding an interim report due in spring 2028.

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Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

May 14, 2025

Committee

May 14 set for first hearing. Failed passage in committee. (Ayes 1. Noes 4. Page 1083.) Reconsideration granted.

upper

May 7, 2025

Upper · Passed

From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.

upper

Mar 5, 2025

Committee

Referred to Com. on REV. & TAX.

upper

Feb 20, 2025

Introduced

Introduced. Read first time. To Com. on RLS. for assignment. To print.

upper

1 primary · 4 co-sponsors