CA SB1391

Requires taxpayers claiming business tax incentives to report annually on original tax returns the number of full-time, part-time, and temporary employees employed in California for taxable years beginning January 1, 2011 or later.

Imposes recapture of business tax incentives added by statute after January 1, 2011 if a taxpayer experiences a net decrease in full-time equivalent employees during a five-year recapture period.

Calculates recapture amount by multiplying total incentive received by a fraction comparing net employee decrease to cumulative employee increase, with interest charged at the rate established by Section 19521.

Exempts taxpayers with 25 or fewer employees and net business income under $500,000 from recapture requirements.

Applies recapture provisions to both personal income tax (Section 17060) and corporation tax (Section 23603), with special rules for transferred business tax incentives requiring seller disclosure to buyer and tax board.