AB 2625: Corporation taxes: minimum franchise tax: annual tax: microbusiness.

Existing law imposes an annual minimum franchise tax, 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 exempts a corporation that incorporates or qualifies to do business in this state from the payment of the minimum franchise tax in its first taxable year.

Existing law imposes an annual tax in an amount equal to the minimum franchise tax on every limited partnership, limited liability company, and limited liability partnership that is doing business in this state or that has filed or registered with the Secretary of State.

The minimum franchise tax imposed on a corporation, and the annual tax imposed on a limited liability company, must be paid by the 15th day of the 4th month of the taxable year. The annual tax imposed on a limited partnership or on a limited liability partnership, partnership must be paid by the original due date of the partnership return.

This bill, for taxable years beginning on or after January 1, 2017, and on or before January 1, 2020, would reduce that minimum franchise tax of a new microbusiness, as defined, to specified amounts, in the 2nd, 3rd, 4th, and 5th taxable years, amounts for the taxable years immediately following its first taxable year that begin on or before January 1, 2020, for a corporation that is a new microbusiness, or that annual tax, for each of the first 5 initial taxable years of its existence, existence that begin on or before January 1, 2020, for a limited liability company, limited partnership, or limited liability partnership that is a new microbusiness, as defined. as specified.

This bill would take effect immediately as a tax levy.