Personal Income Tax Law: Corporation Tax Law: California Retail Security Tax Credit.

Assembly Member Ávila Farías proposes a targeted tax credit program to help small retailers in disadvantaged communities invest in security equipment. The California Retail Security Tax Credit would provide up to $4,000 annually to qualifying businesses that purchase theft prevention measures like security cameras, alarm systems, and access controls.

The program limits eligibility to businesses operating in disadvantaged communities with annual gross receipts under $5 million and 25 or fewer full-time equivalent employees. Qualifying purchases must total at least $4,000 and can include security cameras, locking mechanisms, perimeter lighting, access control systems, and alarm systems. The total annual allocation across all recipients cannot exceed $10 million.

To obtain the credit, businesses must secure advance approval through a reservation system managed by the California Tax Credit Allocation Committee. The committee will begin accepting applications in early 2026, with initial approvals issued by March 15, 2026. If requests exceed the annual cap, credits will be reduced proportionally among applicants. The program applies to tax years 2026 and 2027, with provisions expiring December 1, 2027.

The Franchise Tax Board must report annually on program participation starting June 2027. The bill's findings indicate the credit aims to protect retail employees and deter theft, with effectiveness measured by the number of businesses utilizing the program.