AB 778

Bill Subjects

Taxation Annual Tax Corporations Limited Liability Companies Minimum Franchise Tax Small Businesses

Abstract

Existing law imposes an annual minimum franchise tax of $800, except as provided, on every corporation incorporated in this state, qualified to transact intrastate business in this state, or doing business in this state. Existing law also imposes an annual tax in an amount equal to the minimum franchise tax on every limited partnership, limited liability partnership, and limited liability company doing business in this state, as specified. This bill, for taxable years beginning on or after January 1, 2023, would exempt corporations incorporated in this state from the minimum franchise tax until the first taxable year in which the corporation has gross receipts of $20,000. The bill would also exempt a limited partnership, limited liability partnership, and limited liability company from the annual tax until the first taxable year in which the business has gross receipts of $20,000. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements. The bill also would include additional information required for any bill authorizing a new income tax expenditure. This bill would take effect immediately as a tax levy.