CA SB1239

Exempts from sales and use taxes effective January 1, 2011 tangible personal property purchased by qualified manufacturers for use in manufacturing, processing, refining, fabricating, or recycling, and property used primarily in qualified research.

Increases the research and development tax credit from 15% to 20% for both personal income and corporation taxes, and conforms the alternative incremental credit to federal law for taxable years beginning January 1, 2010 and later.

Expands the employee hiring credit to apply to all taxpayers (not just those with 20 or fewer employees) for wages paid to qualified employees such as CalWORKs recipients, parolees, veterans, and individuals receiving unemployment benefits, allowing 25-40% credits on up to $6,000 per employee wages.

Reduces the applicable recovery period for property depreciation to one-half the period authorized by federal law for property placed in service on or after January 1, 2010.

Extends net operating loss carryback provisions starting in 2015 to five preceding years (from two years) and allows 100% carryback for losses in taxable years beginning January 1, 2012 and later, and excludes capital asset gains from gross income.