Personal Income Tax Law: Corporation Tax Law: credits: cleanup costs.

Assembly Member Nguyen's tax credit proposal responds to shifting patterns in unauthorized encampments following the U.S. Supreme Court's 2024 Grants Pass decision, offering California businesses financial relief for cleanup costs through 2031. The measure creates parallel credits under personal income and corporation tax laws for expenses related to removing encampments, illegal dumping, and abandoned property from private business premises.

Qualified expenditures under the program encompass waste removal, property sanitization, temporary security measures, damage repairs, and preventive installations. To claim the credit, business owners and lessees must document property conditions before cleanup and provide detailed contractor invoices, certifying under penalty of perjury that expenses directly relate to qualifying activities. The Franchise Tax Board holds authority to implement regulations and prevent improper claims through emergency rulemaking procedures.

The legislation mandates annual reporting beginning December 2027 on credit utilization and total amounts allowed. These reports will track the number of participating taxpayers and aggregate credit values to assess program outcomes. The credits remain available for taxable years from January 2026 through December 2031, at which point both code sections sunset unless extended by subsequent legislation.