AB 205 Assembly Bill - CHAPTERED BILL NUMBER: AB 205 CHAPTERED BILL TEXT

CHAPTER 36
FILED WITH SECRETARY OF STATE JULY 5, 2001
APPROVED BY GOVERNOR JULY 4, 2001
PASSED THE ASSEMBLY JUNE 25, 2001
PASSED THE SENATE MAY 30, 2001
AMENDED IN SENATE MAY 22, 2001
AMENDED IN SENATE MAY 7, 2001
AMENDED IN ASSEMBLY APRIL 16, 2001
AMENDED IN ASSEMBLY MARCH 29, 2001

INTRODUCED BY Assembly Members Koretz and Cardenas (Coauthors: Assembly Members Aroner, Correa, Negrete McLeod, Richman, and Washington) (Coauthors: Senators Johannessen and Kuehl)

FEBRUARY 9, 2001

An act to add Chapter 4 (commencing with Section 16300) to Part 1 of Division 7 of the Business and Professions Code, relating to business licensing.

LEGISLATIVE COUNSEL'S DIGEST

AB 205, Koretz. Business licenses and fees: employment relationship.

Existing law authorizes cities, including chartered cities, in the exercise of their police power and for the purpose of regulation, to license any kind of business not prohibited by law transacted and carried on within the limits of their jurisdictions, and to fix the rates of the license fee and provide for its collection, according to specified criteria.

This bill would prohibit any city, including a charter city, city and county, or county, from requiring an employee to obtain a business license or home business occupation permit for, or imposing a business tax or registration fee based on income earned for services performed for an employer by the employee in an employment relationship, as specified.

This bill would become operative only if AB 63 is enacted and becomes effective on or before January 1, 2002.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Chapter 4 (commencing with Section 16300) is added to Part 1 of Division 7 of the Business and Professions Code, to read:

CHAPTER 4. EMPLOYMENT ACTIVITIES

16300. (a) Notwithstanding any other provision of this part, Chapter 1.5 (commencing with Section 7284) of Part 1.7 of Division 2 of the Revenue and Taxation Code, or Chapter 3 (commencing with Section 37100) of Part 2 of Division 3 of Title 4 of the Government Code, no city, including a charter city, city and county, or county may require an employee to obtain a business license or home business occupation permit for, or impose a business tax or registration fee based on income earned for services performed for an employer by the employee in an employment relationship as determined by reference to the common law factors reflected in rulings or guidelines used by either the Internal Revenue Service or the Franchise Tax Board. When there is a dispute between a city, city and county, or county and a taxpayer, the manner in which a taxpayer reports or reported income to the Franchise Tax Board or the Internal Revenue Service shall create a presumption regarding whether the taxpayer performed services for an employer as an employee, or operated a business entity. For purposes of this section, "income" includes income paid currently or deferred and income that is fixed or contingent.

(b) Nothing in this section shall be interpreted to limit the authority of a city, city and county, or county to adopt and enforce zoning, health and safety ordinances, or regulations that define and limit activities that are permissible within its jurisdiction for the purposes of health, safety, welfare, and the provisions of applicable noise ordinances.