Cal. RTC § 23036.4 — California Code / Code rtc / Division 2 / Part 11 / Chapter 1 / Article 2 / Section 23036.4
Section 23036.4
Status: in_force

(a) Notwithstanding any provision of this part or Part 10.2 (commencing with Section 18401) to the contrary, except as provided in subdivision (d), for taxpayers not required to be included in a combined report under Section 25101 or 25110, or taxpayers not authorized to be included in a combined report under Section 25101.15, for each taxable year beginning on or after January 1, 2024, and before January 1, 2030, the total of all credits otherwise allowable under any provision of Chapter 3.5 (commencing with Section 23604), including the carryover of any credit under a former provision of that chapter, for the taxable year shall not reduce the “tax,” as defined in Section 23036, by more than five million dollars ($5,000,000).

(b) Notwithstanding any provision of this part or Part 10.2 (commencing with Section 18401) to the contrary, except as provided in subdivision (d), for taxpayers required to be included in a combined report under Section 25101 or 25110, or taxpayers authorized to be included in a combined report under Section 25101.15, for each taxable year beginning on or after January 1, 2024, and before January 1, 2030, the total of all credits otherwise allowable under any provision of Chapter 3.5 (commencing with Section 23604), including the carryover of any credit under a former provision of that chapter, by all members of the combined report shall not reduce the aggregate amount of “tax,” as defined in Section 23036, of all members of the combined report by more than five million dollars ($5,000,000).

(c) Any amounts included in an election pursuant to Section 6902.5, relating to an irrevocable election to apply credit amounts under Section 17053.85, 17053.95, 17053.98, 17053.98.1, 23685, 23695, 23698, or 23698.1 against qualified sales and use tax, as defined in Section 6902.5, are not included in the five million dollar ($5,000,000) limitation set forth in subdivision (a) or (b).

(d) The limitation under subdivision (a) or (b) shall not apply to the credit allowed by Section 23610.5 (relating to credit for low-income housing).

(e) Any annual refundable credit amount included in an election pursuant to Section 23036.5 is not included in the limitation set forth in subdivision (a) or (b).

(f) Notwithstanding the operative date in subdivision (a), for taxable years beginning on or after January 1, 2027, if an election is made pursuant to subdivision (k) of Section 23698.1, both the credit allowed against the “tax” under clause (i) of subparagraph (A) of paragraph (3) of subdivision (k) of Section 23698.1 and the annual refundable amount calculated under subdivision (k) of Section 23698.1 shall not be included in the limitation set forth in subdivisions (a) and (b).

(g) The amount of any credit otherwise allowable for the taxable year under Section 23036 that is not allowed due to the application of this section shall remain a credit carryover amount under this part.

(h) The carryover period for any credit that is not allowed due to the application of this section shall be increased by the number of taxable years the credit or any portion thereof was not allowed.

(i) For taxpayers that make the election under subdivision (k) of Section 23698.1, any amount of refundable credits pursuant to that subdivision over the five-million-dollar ($5,000,000) limitation under this section shall be allowed in the first taxable year beginning on or after January 1, 2027.

(j) If a taxpayer makes the election under both Section 23036.5 and subdivision (k) of Section 23698.1 with respect to the credit amount under Section 23698.1, the total amount of credit allowed pursuant to both elections shall not exceed the credit amount allowed under subdivision (a) of Section 23698.1.

(k) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.

(l) The amendments made to this section by the act adding this subdivision shall be operative for taxable years beginning on or after January 1, 2027.