| 1 | 1 | | CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Assembly Bill No. 2306Introduced by Assembly Member MelendezFebruary 14, 2020 An act to amend Sections 23151 and 23153 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTAB 2306, as introduced, Melendez. Corporation tax: minimum franchise tax.The Corporation Tax Law imposes upon a corporation doing business in this state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income for that taxable year, but not less than the minimum franchise tax of $800, as specified.This bill, for taxable years beginning on and after January 1, 2020, would repeal the minimum franchise tax imposed upon a corporation doing business in the state. This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 23151 of the Revenue and Taxation Code is amended to read:23151. (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153.(b) For calendar or fiscal years ending after June 30, 1973, the rate of tax shall be 9 percent instead of 7.6 percent as provided by subdivision (a).(c) For calendar or fiscal years ending in 1980 to 1986, inclusive, the rate of tax shall be 9.6 percent.(d) For calendar or fiscal years ending in 1987 to 1996, inclusive, and for any income year beginning before January 1, 1997, the tax rate shall be 9.3 percent.(e) For any income year beginning on or after January 1, 1997, and before the income year identified in subparagraph (A) of paragraph (1) of subdivision (f), January 1, 2000, the tax rate shall be 8.84 percent. The change in rate provided in this subdivision shall be made without proration otherwise required by Section 24251.(f) (1) For the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be the sum of both of the following:(A) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the next preceding income year, but not less than the minimum tax specified in Section 23153.(B) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, but not less than the minimum tax specified in Section 23153.(2) Except as provided in paragraph (1), for taxable years beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year, but not less than the minimum tax specified in Section 23153.(g) For taxable years beginning on or after January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year.SEC. 2. Section 23153 of the Revenue and Taxation Code is amended to read:23153. (a) Every corporation described in subdivision (b) shall be subject to the minimum franchise tax specified in subdivision (d) from the earlier of the date of incorporation, qualification, or commencing to do business within this state, until the effective date of dissolution or withdrawal as provided in Section 23331 or, if later, the date the corporation ceases to do business within the limits of this state.(b) Unless (1) For taxable years beginning before January 1, 2020, unless expressly exempted by this part or the California Constitution, subdivision (a) shall apply to each of the following:(1)(A) Every corporation that is incorporated under the laws of this state.(2)(B) Every corporation that is qualified to transact intrastate business in this state pursuant to Chapter 21 (commencing with Section 2100) of Division 1 of Title 1 of the Corporations Code.(3)(C) Every corporation that is doing business in this state.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state. All other entities subject to a tax in an amount that is in an amount equal to the minimum franchise tax shall continue to be subject to that annual tax.(c) The following entities are not subject to the minimum franchise tax specified in this section:(1) Credit unions.(2) Nonprofit cooperative associations organized pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code that have been issued the certificate of the board of supervisors prepared pursuant to Section 54042 of the Food and Agricultural Code. The association shall be exempt from the minimum franchise tax for five consecutive taxable years, commencing with the first taxable year for which the certificate is issued pursuant to subdivision (b) of Section 54042 of the Food and Agricultural Code. This paragraph only applies to nonprofit cooperative associations organized on or after January 1, 1994.(d) (1) Except as provided in paragraph (2), paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, corporations subject to the minimum franchise tax under subdivision (b) shall pay annually to the state a minimum franchise tax of eight hundred dollars ($800).(2) The For taxable years beginning before January 1, 2020, the minimum franchise tax shall be twenty-five dollars ($25) for each of the following:(A) A corporation formed under the laws of this state whose principal business when formed was gold mining, which is inactive and has not done business within the limits of the state since 1950.(B) A corporation formed under the laws of this state whose principal business when formed was quicksilver mining, which is inactive and has not done business within the limits of the state since 1971, or has been inactive for a period of 24 consecutive months or more.(3) For purposes of paragraph (2), a corporation shall not be considered to have done business if it engages in business other than mining.(e) Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 1999, and before January 1, 2000, every qualified new corporation shall pay annually to the state a minimum franchise tax of five hundred dollars ($500) for the second taxable year. This subdivision shall apply to any corporation that is a qualified new corporation and is incorporated on or after January 1, 1999, and before January 1, 2000.(1) The determination of the gross receipts of a corporation, for purposes of this subdivision, shall be made by including the gross receipts of each member of the commonly controlled group, as defined in Section 25105, of which the corporation is a member.(2) Gross receipts, less returns and allowances reportable to this state, means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness income, as defined in subdivision (d) of Section 25120.(3) Qualified new corporation means a corporation that is incorporated under the laws of this state or has qualified to transact intrastate business in this state, that begins business operations at or after the time of its incorporation and that reasonably estimates that it will have gross receipts, less returns and allowances, reportable to this state for the taxable year of one million dollars ($1,000,000) or less. Qualified new corporation does not include any corporation that began business operations as a sole proprietorship, a partnership, or any other form of business entity prior to its incorporation. This subdivision shall not apply to any corporation that reorganizes solely for the purpose of reducing its minimum franchise tax.(4) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, or to the formation of any subsidiary corporation, to the extent applicable.(5) For any taxable year beginning on or after January 1, 1999, and before January 1, 2000, if a corporation has qualified to pay five hundred dollars ($500) for the second taxable year under this subdivision, but in its second taxable year, the corporations gross receipts, as determined under paragraphs (1) and (2), exceed one million dollars ($1,000,000), an additional tax in the amount equal to three hundred dollars ($300) for the second taxable year shall be due and payable by the corporation on the due date of its return, without regard to extension, for that year.(f) (1) Notwithstanding subdivision (a), every corporation that incorporates or qualifies to do business in this state on or after January 1, 2000, and before January 1, 2020, shall not be subject to the minimum franchise tax for its first taxable year. Every corporation that incorporates or qualifies to do business in this state on or after January 1, 2020, shall not be subject to the minimum franchise tax.(2) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, and qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, to the extent applicable.(3) This subdivision shall not apply to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax.(g) (1) Notwithstanding subdivision (a), a domestic corporation, as defined in Section 167 of the Corporations Code, that files a certificate of dissolution in the office of the Secretary of State pursuant to subdivision (b) of Section 1905 of the Corporations Code, prior to its amendment by the act amending this subdivision, and that does not thereafter do business shall not be subject to the minimum franchise tax for taxable years beginning on or after the date of that filing.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state or to a corporation that files a certificate of dissolution, as specified in paragraph (1).(h) The minimum franchise tax imposed by paragraph (1) of subdivision (d) shall not be increased by the Legislature by more than 10 percent during any calendar year.(i)(1)Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 2020, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the minimum franchise tax for any taxable year the owner is deployed and the corporation operates at a loss or ceases operation.(2)The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this subdivision, including a definition for ceases operation.(3)For the purposes of this subdivision, all of the following definitions apply:(A)Deployed means being called to active duty or active service during a period when a Presidential Executive order specifies that the United States is engaged in combat or homeland defense. Deployed does not include either of the following:(i)Temporary duty for the sole purpose of training or processing.(ii)A permanent change of station.(B)Operates at a loss means negative net income as defined in Section 24341.(C)Small business means a corporation with total income from all sources derived from, or attributable to, the state of two hundred fifty thousand dollars ($250,000) or less.(4)This subdivision shall become inoperative for taxable years beginning on or after January 1, 2030.SEC. 3. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect. |
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| 3 | 3 | | CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Assembly Bill No. 2306Introduced by Assembly Member MelendezFebruary 14, 2020 An act to amend Sections 23151 and 23153 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTAB 2306, as introduced, Melendez. Corporation tax: minimum franchise tax.The Corporation Tax Law imposes upon a corporation doing business in this state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income for that taxable year, but not less than the minimum franchise tax of $800, as specified.This bill, for taxable years beginning on and after January 1, 2020, would repeal the minimum franchise tax imposed upon a corporation doing business in the state. This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO |
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| 9 | 9 | | CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION |
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| 11 | 11 | | Assembly Bill |
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| 13 | 13 | | No. 2306 |
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| 15 | 15 | | Introduced by Assembly Member MelendezFebruary 14, 2020 |
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| 17 | 17 | | Introduced by Assembly Member Melendez |
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| 18 | 18 | | February 14, 2020 |
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| 20 | 20 | | An act to amend Sections 23151 and 23153 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. |
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| 22 | 22 | | LEGISLATIVE COUNSEL'S DIGEST |
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| 24 | 24 | | ## LEGISLATIVE COUNSEL'S DIGEST |
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| 25 | 25 | | |
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| 26 | 26 | | AB 2306, as introduced, Melendez. Corporation tax: minimum franchise tax. |
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| 28 | 28 | | The Corporation Tax Law imposes upon a corporation doing business in this state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income for that taxable year, but not less than the minimum franchise tax of $800, as specified.This bill, for taxable years beginning on and after January 1, 2020, would repeal the minimum franchise tax imposed upon a corporation doing business in the state. This bill would take effect immediately as a tax levy. |
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| 30 | 30 | | The Corporation Tax Law imposes upon a corporation doing business in this state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income for that taxable year, but not less than the minimum franchise tax of $800, as specified. |
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| 32 | 32 | | This bill, for taxable years beginning on and after January 1, 2020, would repeal the minimum franchise tax imposed upon a corporation doing business in the state. |
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| 34 | 34 | | This bill would take effect immediately as a tax levy. |
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| 36 | 36 | | ## Digest Key |
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| 38 | 38 | | ## Bill Text |
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| 40 | 40 | | The people of the State of California do enact as follows:SECTION 1. Section 23151 of the Revenue and Taxation Code is amended to read:23151. (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153.(b) For calendar or fiscal years ending after June 30, 1973, the rate of tax shall be 9 percent instead of 7.6 percent as provided by subdivision (a).(c) For calendar or fiscal years ending in 1980 to 1986, inclusive, the rate of tax shall be 9.6 percent.(d) For calendar or fiscal years ending in 1987 to 1996, inclusive, and for any income year beginning before January 1, 1997, the tax rate shall be 9.3 percent.(e) For any income year beginning on or after January 1, 1997, and before the income year identified in subparagraph (A) of paragraph (1) of subdivision (f), January 1, 2000, the tax rate shall be 8.84 percent. The change in rate provided in this subdivision shall be made without proration otherwise required by Section 24251.(f) (1) For the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be the sum of both of the following:(A) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the next preceding income year, but not less than the minimum tax specified in Section 23153.(B) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, but not less than the minimum tax specified in Section 23153.(2) Except as provided in paragraph (1), for taxable years beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year, but not less than the minimum tax specified in Section 23153.(g) For taxable years beginning on or after January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year.SEC. 2. Section 23153 of the Revenue and Taxation Code is amended to read:23153. (a) Every corporation described in subdivision (b) shall be subject to the minimum franchise tax specified in subdivision (d) from the earlier of the date of incorporation, qualification, or commencing to do business within this state, until the effective date of dissolution or withdrawal as provided in Section 23331 or, if later, the date the corporation ceases to do business within the limits of this state.(b) Unless (1) For taxable years beginning before January 1, 2020, unless expressly exempted by this part or the California Constitution, subdivision (a) shall apply to each of the following:(1)(A) Every corporation that is incorporated under the laws of this state.(2)(B) Every corporation that is qualified to transact intrastate business in this state pursuant to Chapter 21 (commencing with Section 2100) of Division 1 of Title 1 of the Corporations Code.(3)(C) Every corporation that is doing business in this state.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state. All other entities subject to a tax in an amount that is in an amount equal to the minimum franchise tax shall continue to be subject to that annual tax.(c) The following entities are not subject to the minimum franchise tax specified in this section:(1) Credit unions.(2) Nonprofit cooperative associations organized pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code that have been issued the certificate of the board of supervisors prepared pursuant to Section 54042 of the Food and Agricultural Code. The association shall be exempt from the minimum franchise tax for five consecutive taxable years, commencing with the first taxable year for which the certificate is issued pursuant to subdivision (b) of Section 54042 of the Food and Agricultural Code. This paragraph only applies to nonprofit cooperative associations organized on or after January 1, 1994.(d) (1) Except as provided in paragraph (2), paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, corporations subject to the minimum franchise tax under subdivision (b) shall pay annually to the state a minimum franchise tax of eight hundred dollars ($800).(2) The For taxable years beginning before January 1, 2020, the minimum franchise tax shall be twenty-five dollars ($25) for each of the following:(A) A corporation formed under the laws of this state whose principal business when formed was gold mining, which is inactive and has not done business within the limits of the state since 1950.(B) A corporation formed under the laws of this state whose principal business when formed was quicksilver mining, which is inactive and has not done business within the limits of the state since 1971, or has been inactive for a period of 24 consecutive months or more.(3) For purposes of paragraph (2), a corporation shall not be considered to have done business if it engages in business other than mining.(e) Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 1999, and before January 1, 2000, every qualified new corporation shall pay annually to the state a minimum franchise tax of five hundred dollars ($500) for the second taxable year. This subdivision shall apply to any corporation that is a qualified new corporation and is incorporated on or after January 1, 1999, and before January 1, 2000.(1) The determination of the gross receipts of a corporation, for purposes of this subdivision, shall be made by including the gross receipts of each member of the commonly controlled group, as defined in Section 25105, of which the corporation is a member.(2) Gross receipts, less returns and allowances reportable to this state, means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness income, as defined in subdivision (d) of Section 25120.(3) Qualified new corporation means a corporation that is incorporated under the laws of this state or has qualified to transact intrastate business in this state, that begins business operations at or after the time of its incorporation and that reasonably estimates that it will have gross receipts, less returns and allowances, reportable to this state for the taxable year of one million dollars ($1,000,000) or less. Qualified new corporation does not include any corporation that began business operations as a sole proprietorship, a partnership, or any other form of business entity prior to its incorporation. This subdivision shall not apply to any corporation that reorganizes solely for the purpose of reducing its minimum franchise tax.(4) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, or to the formation of any subsidiary corporation, to the extent applicable.(5) For any taxable year beginning on or after January 1, 1999, and before January 1, 2000, if a corporation has qualified to pay five hundred dollars ($500) for the second taxable year under this subdivision, but in its second taxable year, the corporations gross receipts, as determined under paragraphs (1) and (2), exceed one million dollars ($1,000,000), an additional tax in the amount equal to three hundred dollars ($300) for the second taxable year shall be due and payable by the corporation on the due date of its return, without regard to extension, for that year.(f) (1) Notwithstanding subdivision (a), every corporation that incorporates or qualifies to do business in this state on or after January 1, 2000, and before January 1, 2020, shall not be subject to the minimum franchise tax for its first taxable year. Every corporation that incorporates or qualifies to do business in this state on or after January 1, 2020, shall not be subject to the minimum franchise tax.(2) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, and qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, to the extent applicable.(3) This subdivision shall not apply to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax.(g) (1) Notwithstanding subdivision (a), a domestic corporation, as defined in Section 167 of the Corporations Code, that files a certificate of dissolution in the office of the Secretary of State pursuant to subdivision (b) of Section 1905 of the Corporations Code, prior to its amendment by the act amending this subdivision, and that does not thereafter do business shall not be subject to the minimum franchise tax for taxable years beginning on or after the date of that filing.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state or to a corporation that files a certificate of dissolution, as specified in paragraph (1).(h) The minimum franchise tax imposed by paragraph (1) of subdivision (d) shall not be increased by the Legislature by more than 10 percent during any calendar year.(i)(1)Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 2020, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the minimum franchise tax for any taxable year the owner is deployed and the corporation operates at a loss or ceases operation.(2)The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this subdivision, including a definition for ceases operation.(3)For the purposes of this subdivision, all of the following definitions apply:(A)Deployed means being called to active duty or active service during a period when a Presidential Executive order specifies that the United States is engaged in combat or homeland defense. Deployed does not include either of the following:(i)Temporary duty for the sole purpose of training or processing.(ii)A permanent change of station.(B)Operates at a loss means negative net income as defined in Section 24341.(C)Small business means a corporation with total income from all sources derived from, or attributable to, the state of two hundred fifty thousand dollars ($250,000) or less.(4)This subdivision shall become inoperative for taxable years beginning on or after January 1, 2030.SEC. 3. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect. |
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| 42 | 42 | | The people of the State of California do enact as follows: |
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| 44 | 44 | | ## The people of the State of California do enact as follows: |
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| 46 | 46 | | SECTION 1. Section 23151 of the Revenue and Taxation Code is amended to read:23151. (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153.(b) For calendar or fiscal years ending after June 30, 1973, the rate of tax shall be 9 percent instead of 7.6 percent as provided by subdivision (a).(c) For calendar or fiscal years ending in 1980 to 1986, inclusive, the rate of tax shall be 9.6 percent.(d) For calendar or fiscal years ending in 1987 to 1996, inclusive, and for any income year beginning before January 1, 1997, the tax rate shall be 9.3 percent.(e) For any income year beginning on or after January 1, 1997, and before the income year identified in subparagraph (A) of paragraph (1) of subdivision (f), January 1, 2000, the tax rate shall be 8.84 percent. The change in rate provided in this subdivision shall be made without proration otherwise required by Section 24251.(f) (1) For the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be the sum of both of the following:(A) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the next preceding income year, but not less than the minimum tax specified in Section 23153.(B) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, but not less than the minimum tax specified in Section 23153.(2) Except as provided in paragraph (1), for taxable years beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year, but not less than the minimum tax specified in Section 23153.(g) For taxable years beginning on or after January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year. |
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| 48 | 48 | | SECTION 1. Section 23151 of the Revenue and Taxation Code is amended to read: |
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| 50 | 50 | | ### SECTION 1. |
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| 52 | 52 | | 23151. (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153.(b) For calendar or fiscal years ending after June 30, 1973, the rate of tax shall be 9 percent instead of 7.6 percent as provided by subdivision (a).(c) For calendar or fiscal years ending in 1980 to 1986, inclusive, the rate of tax shall be 9.6 percent.(d) For calendar or fiscal years ending in 1987 to 1996, inclusive, and for any income year beginning before January 1, 1997, the tax rate shall be 9.3 percent.(e) For any income year beginning on or after January 1, 1997, and before the income year identified in subparagraph (A) of paragraph (1) of subdivision (f), January 1, 2000, the tax rate shall be 8.84 percent. The change in rate provided in this subdivision shall be made without proration otherwise required by Section 24251.(f) (1) For the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be the sum of both of the following:(A) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the next preceding income year, but not less than the minimum tax specified in Section 23153.(B) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, but not less than the minimum tax specified in Section 23153.(2) Except as provided in paragraph (1), for taxable years beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year, but not less than the minimum tax specified in Section 23153.(g) For taxable years beginning on or after January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year. |
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| 53 | 53 | | |
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| 54 | 54 | | 23151. (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153.(b) For calendar or fiscal years ending after June 30, 1973, the rate of tax shall be 9 percent instead of 7.6 percent as provided by subdivision (a).(c) For calendar or fiscal years ending in 1980 to 1986, inclusive, the rate of tax shall be 9.6 percent.(d) For calendar or fiscal years ending in 1987 to 1996, inclusive, and for any income year beginning before January 1, 1997, the tax rate shall be 9.3 percent.(e) For any income year beginning on or after January 1, 1997, and before the income year identified in subparagraph (A) of paragraph (1) of subdivision (f), January 1, 2000, the tax rate shall be 8.84 percent. The change in rate provided in this subdivision shall be made without proration otherwise required by Section 24251.(f) (1) For the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be the sum of both of the following:(A) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the next preceding income year, but not less than the minimum tax specified in Section 23153.(B) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, but not less than the minimum tax specified in Section 23153.(2) Except as provided in paragraph (1), for taxable years beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year, but not less than the minimum tax specified in Section 23153.(g) For taxable years beginning on or after January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year. |
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| 55 | 55 | | |
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| 56 | 56 | | 23151. (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153.(b) For calendar or fiscal years ending after June 30, 1973, the rate of tax shall be 9 percent instead of 7.6 percent as provided by subdivision (a).(c) For calendar or fiscal years ending in 1980 to 1986, inclusive, the rate of tax shall be 9.6 percent.(d) For calendar or fiscal years ending in 1987 to 1996, inclusive, and for any income year beginning before January 1, 1997, the tax rate shall be 9.3 percent.(e) For any income year beginning on or after January 1, 1997, and before the income year identified in subparagraph (A) of paragraph (1) of subdivision (f), January 1, 2000, the tax rate shall be 8.84 percent. The change in rate provided in this subdivision shall be made without proration otherwise required by Section 24251.(f) (1) For the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be the sum of both of the following:(A) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the next preceding income year, but not less than the minimum tax specified in Section 23153.(B) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, but not less than the minimum tax specified in Section 23153.(2) Except as provided in paragraph (1), for taxable years beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year, but not less than the minimum tax specified in Section 23153.(g) For taxable years beginning on or after January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year. |
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| 57 | 57 | | |
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| 58 | 58 | | |
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| 59 | 59 | | |
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| 60 | 60 | | 23151. (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153. |
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| 61 | 61 | | |
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| 62 | 62 | | (b) For calendar or fiscal years ending after June 30, 1973, the rate of tax shall be 9 percent instead of 7.6 percent as provided by subdivision (a). |
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| 63 | 63 | | |
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| 64 | 64 | | (c) For calendar or fiscal years ending in 1980 to 1986, inclusive, the rate of tax shall be 9.6 percent. |
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| 65 | 65 | | |
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| 66 | 66 | | (d) For calendar or fiscal years ending in 1987 to 1996, inclusive, and for any income year beginning before January 1, 1997, the tax rate shall be 9.3 percent. |
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| 67 | 67 | | |
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| 68 | 68 | | (e) For any income year beginning on or after January 1, 1997, and before the income year identified in subparagraph (A) of paragraph (1) of subdivision (f), January 1, 2000, the tax rate shall be 8.84 percent. The change in rate provided in this subdivision shall be made without proration otherwise required by Section 24251. |
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| 69 | 69 | | |
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| 70 | 70 | | (f) (1) For the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be the sum of both of the following: |
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| 71 | 71 | | |
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| 72 | 72 | | (A) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the next preceding income year, but not less than the minimum tax specified in Section 23153. |
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| 73 | 73 | | |
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| 74 | 74 | | (B) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the first taxable year beginning on or after January 1, 2000, and before January 1, 2020, but not less than the minimum tax specified in Section 23153. |
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| 75 | 75 | | |
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| 76 | 76 | | (2) Except as provided in paragraph (1), for taxable years beginning on or after January 1, 2000, and before January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year, but not less than the minimum tax specified in Section 23153. |
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| 77 | 77 | | |
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| 78 | 78 | | (g) For taxable years beginning on or after January 1, 2020, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year. |
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| 79 | 79 | | |
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| 80 | 80 | | SEC. 2. Section 23153 of the Revenue and Taxation Code is amended to read:23153. (a) Every corporation described in subdivision (b) shall be subject to the minimum franchise tax specified in subdivision (d) from the earlier of the date of incorporation, qualification, or commencing to do business within this state, until the effective date of dissolution or withdrawal as provided in Section 23331 or, if later, the date the corporation ceases to do business within the limits of this state.(b) Unless (1) For taxable years beginning before January 1, 2020, unless expressly exempted by this part or the California Constitution, subdivision (a) shall apply to each of the following:(1)(A) Every corporation that is incorporated under the laws of this state.(2)(B) Every corporation that is qualified to transact intrastate business in this state pursuant to Chapter 21 (commencing with Section 2100) of Division 1 of Title 1 of the Corporations Code.(3)(C) Every corporation that is doing business in this state.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state. All other entities subject to a tax in an amount that is in an amount equal to the minimum franchise tax shall continue to be subject to that annual tax.(c) The following entities are not subject to the minimum franchise tax specified in this section:(1) Credit unions.(2) Nonprofit cooperative associations organized pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code that have been issued the certificate of the board of supervisors prepared pursuant to Section 54042 of the Food and Agricultural Code. The association shall be exempt from the minimum franchise tax for five consecutive taxable years, commencing with the first taxable year for which the certificate is issued pursuant to subdivision (b) of Section 54042 of the Food and Agricultural Code. This paragraph only applies to nonprofit cooperative associations organized on or after January 1, 1994.(d) (1) Except as provided in paragraph (2), paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, corporations subject to the minimum franchise tax under subdivision (b) shall pay annually to the state a minimum franchise tax of eight hundred dollars ($800).(2) The For taxable years beginning before January 1, 2020, the minimum franchise tax shall be twenty-five dollars ($25) for each of the following:(A) A corporation formed under the laws of this state whose principal business when formed was gold mining, which is inactive and has not done business within the limits of the state since 1950.(B) A corporation formed under the laws of this state whose principal business when formed was quicksilver mining, which is inactive and has not done business within the limits of the state since 1971, or has been inactive for a period of 24 consecutive months or more.(3) For purposes of paragraph (2), a corporation shall not be considered to have done business if it engages in business other than mining.(e) Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 1999, and before January 1, 2000, every qualified new corporation shall pay annually to the state a minimum franchise tax of five hundred dollars ($500) for the second taxable year. This subdivision shall apply to any corporation that is a qualified new corporation and is incorporated on or after January 1, 1999, and before January 1, 2000.(1) The determination of the gross receipts of a corporation, for purposes of this subdivision, shall be made by including the gross receipts of each member of the commonly controlled group, as defined in Section 25105, of which the corporation is a member.(2) Gross receipts, less returns and allowances reportable to this state, means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness income, as defined in subdivision (d) of Section 25120.(3) Qualified new corporation means a corporation that is incorporated under the laws of this state or has qualified to transact intrastate business in this state, that begins business operations at or after the time of its incorporation and that reasonably estimates that it will have gross receipts, less returns and allowances, reportable to this state for the taxable year of one million dollars ($1,000,000) or less. Qualified new corporation does not include any corporation that began business operations as a sole proprietorship, a partnership, or any other form of business entity prior to its incorporation. This subdivision shall not apply to any corporation that reorganizes solely for the purpose of reducing its minimum franchise tax.(4) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, or to the formation of any subsidiary corporation, to the extent applicable.(5) For any taxable year beginning on or after January 1, 1999, and before January 1, 2000, if a corporation has qualified to pay five hundred dollars ($500) for the second taxable year under this subdivision, but in its second taxable year, the corporations gross receipts, as determined under paragraphs (1) and (2), exceed one million dollars ($1,000,000), an additional tax in the amount equal to three hundred dollars ($300) for the second taxable year shall be due and payable by the corporation on the due date of its return, without regard to extension, for that year.(f) (1) Notwithstanding subdivision (a), every corporation that incorporates or qualifies to do business in this state on or after January 1, 2000, and before January 1, 2020, shall not be subject to the minimum franchise tax for its first taxable year. Every corporation that incorporates or qualifies to do business in this state on or after January 1, 2020, shall not be subject to the minimum franchise tax.(2) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, and qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, to the extent applicable.(3) This subdivision shall not apply to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax.(g) (1) Notwithstanding subdivision (a), a domestic corporation, as defined in Section 167 of the Corporations Code, that files a certificate of dissolution in the office of the Secretary of State pursuant to subdivision (b) of Section 1905 of the Corporations Code, prior to its amendment by the act amending this subdivision, and that does not thereafter do business shall not be subject to the minimum franchise tax for taxable years beginning on or after the date of that filing.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state or to a corporation that files a certificate of dissolution, as specified in paragraph (1).(h) The minimum franchise tax imposed by paragraph (1) of subdivision (d) shall not be increased by the Legislature by more than 10 percent during any calendar year.(i)(1)Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 2020, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the minimum franchise tax for any taxable year the owner is deployed and the corporation operates at a loss or ceases operation.(2)The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this subdivision, including a definition for ceases operation.(3)For the purposes of this subdivision, all of the following definitions apply:(A)Deployed means being called to active duty or active service during a period when a Presidential Executive order specifies that the United States is engaged in combat or homeland defense. Deployed does not include either of the following:(i)Temporary duty for the sole purpose of training or processing.(ii)A permanent change of station.(B)Operates at a loss means negative net income as defined in Section 24341.(C)Small business means a corporation with total income from all sources derived from, or attributable to, the state of two hundred fifty thousand dollars ($250,000) or less.(4)This subdivision shall become inoperative for taxable years beginning on or after January 1, 2030. |
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| 81 | 81 | | |
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| 82 | 82 | | SEC. 2. Section 23153 of the Revenue and Taxation Code is amended to read: |
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| 83 | 83 | | |
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| 84 | 84 | | ### SEC. 2. |
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| 85 | 85 | | |
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| 86 | 86 | | 23153. (a) Every corporation described in subdivision (b) shall be subject to the minimum franchise tax specified in subdivision (d) from the earlier of the date of incorporation, qualification, or commencing to do business within this state, until the effective date of dissolution or withdrawal as provided in Section 23331 or, if later, the date the corporation ceases to do business within the limits of this state.(b) Unless (1) For taxable years beginning before January 1, 2020, unless expressly exempted by this part or the California Constitution, subdivision (a) shall apply to each of the following:(1)(A) Every corporation that is incorporated under the laws of this state.(2)(B) Every corporation that is qualified to transact intrastate business in this state pursuant to Chapter 21 (commencing with Section 2100) of Division 1 of Title 1 of the Corporations Code.(3)(C) Every corporation that is doing business in this state.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state. All other entities subject to a tax in an amount that is in an amount equal to the minimum franchise tax shall continue to be subject to that annual tax.(c) The following entities are not subject to the minimum franchise tax specified in this section:(1) Credit unions.(2) Nonprofit cooperative associations organized pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code that have been issued the certificate of the board of supervisors prepared pursuant to Section 54042 of the Food and Agricultural Code. The association shall be exempt from the minimum franchise tax for five consecutive taxable years, commencing with the first taxable year for which the certificate is issued pursuant to subdivision (b) of Section 54042 of the Food and Agricultural Code. This paragraph only applies to nonprofit cooperative associations organized on or after January 1, 1994.(d) (1) Except as provided in paragraph (2), paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, corporations subject to the minimum franchise tax under subdivision (b) shall pay annually to the state a minimum franchise tax of eight hundred dollars ($800).(2) The For taxable years beginning before January 1, 2020, the minimum franchise tax shall be twenty-five dollars ($25) for each of the following:(A) A corporation formed under the laws of this state whose principal business when formed was gold mining, which is inactive and has not done business within the limits of the state since 1950.(B) A corporation formed under the laws of this state whose principal business when formed was quicksilver mining, which is inactive and has not done business within the limits of the state since 1971, or has been inactive for a period of 24 consecutive months or more.(3) For purposes of paragraph (2), a corporation shall not be considered to have done business if it engages in business other than mining.(e) Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 1999, and before January 1, 2000, every qualified new corporation shall pay annually to the state a minimum franchise tax of five hundred dollars ($500) for the second taxable year. This subdivision shall apply to any corporation that is a qualified new corporation and is incorporated on or after January 1, 1999, and before January 1, 2000.(1) The determination of the gross receipts of a corporation, for purposes of this subdivision, shall be made by including the gross receipts of each member of the commonly controlled group, as defined in Section 25105, of which the corporation is a member.(2) Gross receipts, less returns and allowances reportable to this state, means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness income, as defined in subdivision (d) of Section 25120.(3) Qualified new corporation means a corporation that is incorporated under the laws of this state or has qualified to transact intrastate business in this state, that begins business operations at or after the time of its incorporation and that reasonably estimates that it will have gross receipts, less returns and allowances, reportable to this state for the taxable year of one million dollars ($1,000,000) or less. Qualified new corporation does not include any corporation that began business operations as a sole proprietorship, a partnership, or any other form of business entity prior to its incorporation. This subdivision shall not apply to any corporation that reorganizes solely for the purpose of reducing its minimum franchise tax.(4) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, or to the formation of any subsidiary corporation, to the extent applicable.(5) For any taxable year beginning on or after January 1, 1999, and before January 1, 2000, if a corporation has qualified to pay five hundred dollars ($500) for the second taxable year under this subdivision, but in its second taxable year, the corporations gross receipts, as determined under paragraphs (1) and (2), exceed one million dollars ($1,000,000), an additional tax in the amount equal to three hundred dollars ($300) for the second taxable year shall be due and payable by the corporation on the due date of its return, without regard to extension, for that year.(f) (1) Notwithstanding subdivision (a), every corporation that incorporates or qualifies to do business in this state on or after January 1, 2000, and before January 1, 2020, shall not be subject to the minimum franchise tax for its first taxable year. Every corporation that incorporates or qualifies to do business in this state on or after January 1, 2020, shall not be subject to the minimum franchise tax.(2) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, and qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, to the extent applicable.(3) This subdivision shall not apply to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax.(g) (1) Notwithstanding subdivision (a), a domestic corporation, as defined in Section 167 of the Corporations Code, that files a certificate of dissolution in the office of the Secretary of State pursuant to subdivision (b) of Section 1905 of the Corporations Code, prior to its amendment by the act amending this subdivision, and that does not thereafter do business shall not be subject to the minimum franchise tax for taxable years beginning on or after the date of that filing.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state or to a corporation that files a certificate of dissolution, as specified in paragraph (1).(h) The minimum franchise tax imposed by paragraph (1) of subdivision (d) shall not be increased by the Legislature by more than 10 percent during any calendar year.(i)(1)Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 2020, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the minimum franchise tax for any taxable year the owner is deployed and the corporation operates at a loss or ceases operation.(2)The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this subdivision, including a definition for ceases operation.(3)For the purposes of this subdivision, all of the following definitions apply:(A)Deployed means being called to active duty or active service during a period when a Presidential Executive order specifies that the United States is engaged in combat or homeland defense. Deployed does not include either of the following:(i)Temporary duty for the sole purpose of training or processing.(ii)A permanent change of station.(B)Operates at a loss means negative net income as defined in Section 24341.(C)Small business means a corporation with total income from all sources derived from, or attributable to, the state of two hundred fifty thousand dollars ($250,000) or less.(4)This subdivision shall become inoperative for taxable years beginning on or after January 1, 2030. |
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| 87 | 87 | | |
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| 88 | 88 | | 23153. (a) Every corporation described in subdivision (b) shall be subject to the minimum franchise tax specified in subdivision (d) from the earlier of the date of incorporation, qualification, or commencing to do business within this state, until the effective date of dissolution or withdrawal as provided in Section 23331 or, if later, the date the corporation ceases to do business within the limits of this state.(b) Unless (1) For taxable years beginning before January 1, 2020, unless expressly exempted by this part or the California Constitution, subdivision (a) shall apply to each of the following:(1)(A) Every corporation that is incorporated under the laws of this state.(2)(B) Every corporation that is qualified to transact intrastate business in this state pursuant to Chapter 21 (commencing with Section 2100) of Division 1 of Title 1 of the Corporations Code.(3)(C) Every corporation that is doing business in this state.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state. All other entities subject to a tax in an amount that is in an amount equal to the minimum franchise tax shall continue to be subject to that annual tax.(c) The following entities are not subject to the minimum franchise tax specified in this section:(1) Credit unions.(2) Nonprofit cooperative associations organized pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code that have been issued the certificate of the board of supervisors prepared pursuant to Section 54042 of the Food and Agricultural Code. The association shall be exempt from the minimum franchise tax for five consecutive taxable years, commencing with the first taxable year for which the certificate is issued pursuant to subdivision (b) of Section 54042 of the Food and Agricultural Code. This paragraph only applies to nonprofit cooperative associations organized on or after January 1, 1994.(d) (1) Except as provided in paragraph (2), paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, corporations subject to the minimum franchise tax under subdivision (b) shall pay annually to the state a minimum franchise tax of eight hundred dollars ($800).(2) The For taxable years beginning before January 1, 2020, the minimum franchise tax shall be twenty-five dollars ($25) for each of the following:(A) A corporation formed under the laws of this state whose principal business when formed was gold mining, which is inactive and has not done business within the limits of the state since 1950.(B) A corporation formed under the laws of this state whose principal business when formed was quicksilver mining, which is inactive and has not done business within the limits of the state since 1971, or has been inactive for a period of 24 consecutive months or more.(3) For purposes of paragraph (2), a corporation shall not be considered to have done business if it engages in business other than mining.(e) Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 1999, and before January 1, 2000, every qualified new corporation shall pay annually to the state a minimum franchise tax of five hundred dollars ($500) for the second taxable year. This subdivision shall apply to any corporation that is a qualified new corporation and is incorporated on or after January 1, 1999, and before January 1, 2000.(1) The determination of the gross receipts of a corporation, for purposes of this subdivision, shall be made by including the gross receipts of each member of the commonly controlled group, as defined in Section 25105, of which the corporation is a member.(2) Gross receipts, less returns and allowances reportable to this state, means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness income, as defined in subdivision (d) of Section 25120.(3) Qualified new corporation means a corporation that is incorporated under the laws of this state or has qualified to transact intrastate business in this state, that begins business operations at or after the time of its incorporation and that reasonably estimates that it will have gross receipts, less returns and allowances, reportable to this state for the taxable year of one million dollars ($1,000,000) or less. Qualified new corporation does not include any corporation that began business operations as a sole proprietorship, a partnership, or any other form of business entity prior to its incorporation. This subdivision shall not apply to any corporation that reorganizes solely for the purpose of reducing its minimum franchise tax.(4) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, or to the formation of any subsidiary corporation, to the extent applicable.(5) For any taxable year beginning on or after January 1, 1999, and before January 1, 2000, if a corporation has qualified to pay five hundred dollars ($500) for the second taxable year under this subdivision, but in its second taxable year, the corporations gross receipts, as determined under paragraphs (1) and (2), exceed one million dollars ($1,000,000), an additional tax in the amount equal to three hundred dollars ($300) for the second taxable year shall be due and payable by the corporation on the due date of its return, without regard to extension, for that year.(f) (1) Notwithstanding subdivision (a), every corporation that incorporates or qualifies to do business in this state on or after January 1, 2000, and before January 1, 2020, shall not be subject to the minimum franchise tax for its first taxable year. Every corporation that incorporates or qualifies to do business in this state on or after January 1, 2020, shall not be subject to the minimum franchise tax.(2) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, and qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, to the extent applicable.(3) This subdivision shall not apply to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax.(g) (1) Notwithstanding subdivision (a), a domestic corporation, as defined in Section 167 of the Corporations Code, that files a certificate of dissolution in the office of the Secretary of State pursuant to subdivision (b) of Section 1905 of the Corporations Code, prior to its amendment by the act amending this subdivision, and that does not thereafter do business shall not be subject to the minimum franchise tax for taxable years beginning on or after the date of that filing.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state or to a corporation that files a certificate of dissolution, as specified in paragraph (1).(h) The minimum franchise tax imposed by paragraph (1) of subdivision (d) shall not be increased by the Legislature by more than 10 percent during any calendar year.(i)(1)Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 2020, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the minimum franchise tax for any taxable year the owner is deployed and the corporation operates at a loss or ceases operation.(2)The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this subdivision, including a definition for ceases operation.(3)For the purposes of this subdivision, all of the following definitions apply:(A)Deployed means being called to active duty or active service during a period when a Presidential Executive order specifies that the United States is engaged in combat or homeland defense. Deployed does not include either of the following:(i)Temporary duty for the sole purpose of training or processing.(ii)A permanent change of station.(B)Operates at a loss means negative net income as defined in Section 24341.(C)Small business means a corporation with total income from all sources derived from, or attributable to, the state of two hundred fifty thousand dollars ($250,000) or less.(4)This subdivision shall become inoperative for taxable years beginning on or after January 1, 2030. |
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| 89 | 89 | | |
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| 90 | 90 | | 23153. (a) Every corporation described in subdivision (b) shall be subject to the minimum franchise tax specified in subdivision (d) from the earlier of the date of incorporation, qualification, or commencing to do business within this state, until the effective date of dissolution or withdrawal as provided in Section 23331 or, if later, the date the corporation ceases to do business within the limits of this state.(b) Unless (1) For taxable years beginning before January 1, 2020, unless expressly exempted by this part or the California Constitution, subdivision (a) shall apply to each of the following:(1)(A) Every corporation that is incorporated under the laws of this state.(2)(B) Every corporation that is qualified to transact intrastate business in this state pursuant to Chapter 21 (commencing with Section 2100) of Division 1 of Title 1 of the Corporations Code.(3)(C) Every corporation that is doing business in this state.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state. All other entities subject to a tax in an amount that is in an amount equal to the minimum franchise tax shall continue to be subject to that annual tax.(c) The following entities are not subject to the minimum franchise tax specified in this section:(1) Credit unions.(2) Nonprofit cooperative associations organized pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code that have been issued the certificate of the board of supervisors prepared pursuant to Section 54042 of the Food and Agricultural Code. The association shall be exempt from the minimum franchise tax for five consecutive taxable years, commencing with the first taxable year for which the certificate is issued pursuant to subdivision (b) of Section 54042 of the Food and Agricultural Code. This paragraph only applies to nonprofit cooperative associations organized on or after January 1, 1994.(d) (1) Except as provided in paragraph (2), paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, corporations subject to the minimum franchise tax under subdivision (b) shall pay annually to the state a minimum franchise tax of eight hundred dollars ($800).(2) The For taxable years beginning before January 1, 2020, the minimum franchise tax shall be twenty-five dollars ($25) for each of the following:(A) A corporation formed under the laws of this state whose principal business when formed was gold mining, which is inactive and has not done business within the limits of the state since 1950.(B) A corporation formed under the laws of this state whose principal business when formed was quicksilver mining, which is inactive and has not done business within the limits of the state since 1971, or has been inactive for a period of 24 consecutive months or more.(3) For purposes of paragraph (2), a corporation shall not be considered to have done business if it engages in business other than mining.(e) Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 1999, and before January 1, 2000, every qualified new corporation shall pay annually to the state a minimum franchise tax of five hundred dollars ($500) for the second taxable year. This subdivision shall apply to any corporation that is a qualified new corporation and is incorporated on or after January 1, 1999, and before January 1, 2000.(1) The determination of the gross receipts of a corporation, for purposes of this subdivision, shall be made by including the gross receipts of each member of the commonly controlled group, as defined in Section 25105, of which the corporation is a member.(2) Gross receipts, less returns and allowances reportable to this state, means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness income, as defined in subdivision (d) of Section 25120.(3) Qualified new corporation means a corporation that is incorporated under the laws of this state or has qualified to transact intrastate business in this state, that begins business operations at or after the time of its incorporation and that reasonably estimates that it will have gross receipts, less returns and allowances, reportable to this state for the taxable year of one million dollars ($1,000,000) or less. Qualified new corporation does not include any corporation that began business operations as a sole proprietorship, a partnership, or any other form of business entity prior to its incorporation. This subdivision shall not apply to any corporation that reorganizes solely for the purpose of reducing its minimum franchise tax.(4) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, or to the formation of any subsidiary corporation, to the extent applicable.(5) For any taxable year beginning on or after January 1, 1999, and before January 1, 2000, if a corporation has qualified to pay five hundred dollars ($500) for the second taxable year under this subdivision, but in its second taxable year, the corporations gross receipts, as determined under paragraphs (1) and (2), exceed one million dollars ($1,000,000), an additional tax in the amount equal to three hundred dollars ($300) for the second taxable year shall be due and payable by the corporation on the due date of its return, without regard to extension, for that year.(f) (1) Notwithstanding subdivision (a), every corporation that incorporates or qualifies to do business in this state on or after January 1, 2000, and before January 1, 2020, shall not be subject to the minimum franchise tax for its first taxable year. Every corporation that incorporates or qualifies to do business in this state on or after January 1, 2020, shall not be subject to the minimum franchise tax.(2) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, and qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, to the extent applicable.(3) This subdivision shall not apply to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax.(g) (1) Notwithstanding subdivision (a), a domestic corporation, as defined in Section 167 of the Corporations Code, that files a certificate of dissolution in the office of the Secretary of State pursuant to subdivision (b) of Section 1905 of the Corporations Code, prior to its amendment by the act amending this subdivision, and that does not thereafter do business shall not be subject to the minimum franchise tax for taxable years beginning on or after the date of that filing.(2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state or to a corporation that files a certificate of dissolution, as specified in paragraph (1).(h) The minimum franchise tax imposed by paragraph (1) of subdivision (d) shall not be increased by the Legislature by more than 10 percent during any calendar year.(i)(1)Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 2020, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the minimum franchise tax for any taxable year the owner is deployed and the corporation operates at a loss or ceases operation.(2)The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this subdivision, including a definition for ceases operation.(3)For the purposes of this subdivision, all of the following definitions apply:(A)Deployed means being called to active duty or active service during a period when a Presidential Executive order specifies that the United States is engaged in combat or homeland defense. Deployed does not include either of the following:(i)Temporary duty for the sole purpose of training or processing.(ii)A permanent change of station.(B)Operates at a loss means negative net income as defined in Section 24341.(C)Small business means a corporation with total income from all sources derived from, or attributable to, the state of two hundred fifty thousand dollars ($250,000) or less.(4)This subdivision shall become inoperative for taxable years beginning on or after January 1, 2030. |
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| 91 | 91 | | |
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| 92 | 92 | | |
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| 93 | 93 | | |
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| 94 | 94 | | 23153. (a) Every corporation described in subdivision (b) shall be subject to the minimum franchise tax specified in subdivision (d) from the earlier of the date of incorporation, qualification, or commencing to do business within this state, until the effective date of dissolution or withdrawal as provided in Section 23331 or, if later, the date the corporation ceases to do business within the limits of this state. |
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| 95 | 95 | | |
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| 96 | 96 | | (b) Unless (1) For taxable years beginning before January 1, 2020, unless expressly exempted by this part or the California Constitution, subdivision (a) shall apply to each of the following: |
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| 97 | 97 | | |
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| 98 | 98 | | (1) |
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| 99 | 99 | | |
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| 100 | 100 | | |
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| 101 | 101 | | |
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| 102 | 102 | | (A) Every corporation that is incorporated under the laws of this state. |
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| 103 | 103 | | |
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| 104 | 104 | | (2) |
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| 105 | 105 | | |
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| 106 | 106 | | |
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| 107 | 107 | | |
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| 108 | 108 | | (B) Every corporation that is qualified to transact intrastate business in this state pursuant to Chapter 21 (commencing with Section 2100) of Division 1 of Title 1 of the Corporations Code. |
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| 109 | 109 | | |
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| 110 | 110 | | (3) |
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| 111 | 111 | | |
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| 112 | 112 | | |
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| 113 | 113 | | |
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| 114 | 114 | | (C) Every corporation that is doing business in this state. |
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| 115 | 115 | | |
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| 116 | 116 | | (2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state. All other entities subject to a tax in an amount that is in an amount equal to the minimum franchise tax shall continue to be subject to that annual tax. |
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| 117 | 117 | | |
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| 118 | 118 | | (c) The following entities are not subject to the minimum franchise tax specified in this section: |
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| 119 | 119 | | |
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| 120 | 120 | | (1) Credit unions. |
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| 121 | 121 | | |
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| 122 | 122 | | (2) Nonprofit cooperative associations organized pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code that have been issued the certificate of the board of supervisors prepared pursuant to Section 54042 of the Food and Agricultural Code. The association shall be exempt from the minimum franchise tax for five consecutive taxable years, commencing with the first taxable year for which the certificate is issued pursuant to subdivision (b) of Section 54042 of the Food and Agricultural Code. This paragraph only applies to nonprofit cooperative associations organized on or after January 1, 1994. |
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| 123 | 123 | | |
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| 124 | 124 | | (d) (1) Except as provided in paragraph (2), paragraph (1) of subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of Section 23181, and paragraph (1) of subdivision (c) of Section 23183, corporations subject to the minimum franchise tax under subdivision (b) shall pay annually to the state a minimum franchise tax of eight hundred dollars ($800). |
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| 125 | 125 | | |
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| 126 | 126 | | (2) The For taxable years beginning before January 1, 2020, the minimum franchise tax shall be twenty-five dollars ($25) for each of the following: |
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| 127 | 127 | | |
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| 128 | 128 | | (A) A corporation formed under the laws of this state whose principal business when formed was gold mining, which is inactive and has not done business within the limits of the state since 1950. |
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| 129 | 129 | | |
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| 130 | 130 | | (B) A corporation formed under the laws of this state whose principal business when formed was quicksilver mining, which is inactive and has not done business within the limits of the state since 1971, or has been inactive for a period of 24 consecutive months or more. |
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| 131 | 131 | | |
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| 132 | 132 | | (3) For purposes of paragraph (2), a corporation shall not be considered to have done business if it engages in business other than mining. |
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| 133 | 133 | | |
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| 134 | 134 | | (e) Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 1999, and before January 1, 2000, every qualified new corporation shall pay annually to the state a minimum franchise tax of five hundred dollars ($500) for the second taxable year. This subdivision shall apply to any corporation that is a qualified new corporation and is incorporated on or after January 1, 1999, and before January 1, 2000. |
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| 135 | 135 | | |
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| 136 | 136 | | (1) The determination of the gross receipts of a corporation, for purposes of this subdivision, shall be made by including the gross receipts of each member of the commonly controlled group, as defined in Section 25105, of which the corporation is a member. |
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| 137 | 137 | | |
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| 138 | 138 | | (2) Gross receipts, less returns and allowances reportable to this state, means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness income, as defined in subdivision (d) of Section 25120. |
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| 139 | 139 | | |
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| 140 | 140 | | (3) Qualified new corporation means a corporation that is incorporated under the laws of this state or has qualified to transact intrastate business in this state, that begins business operations at or after the time of its incorporation and that reasonably estimates that it will have gross receipts, less returns and allowances, reportable to this state for the taxable year of one million dollars ($1,000,000) or less. Qualified new corporation does not include any corporation that began business operations as a sole proprietorship, a partnership, or any other form of business entity prior to its incorporation. This subdivision shall not apply to any corporation that reorganizes solely for the purpose of reducing its minimum franchise tax. |
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| 141 | 141 | | |
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| 142 | 142 | | (4) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, or to the formation of any subsidiary corporation, to the extent applicable. |
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| 143 | 143 | | |
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| 144 | 144 | | (5) For any taxable year beginning on or after January 1, 1999, and before January 1, 2000, if a corporation has qualified to pay five hundred dollars ($500) for the second taxable year under this subdivision, but in its second taxable year, the corporations gross receipts, as determined under paragraphs (1) and (2), exceed one million dollars ($1,000,000), an additional tax in the amount equal to three hundred dollars ($300) for the second taxable year shall be due and payable by the corporation on the due date of its return, without regard to extension, for that year. |
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| 145 | 145 | | |
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| 146 | 146 | | (f) (1) Notwithstanding subdivision (a), every corporation that incorporates or qualifies to do business in this state on or after January 1, 2000, and before January 1, 2020, shall not be subject to the minimum franchise tax for its first taxable year. Every corporation that incorporates or qualifies to do business in this state on or after January 1, 2020, shall not be subject to the minimum franchise tax. |
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| 147 | 147 | | |
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| 148 | 148 | | (2) This subdivision shall not apply to limited partnerships, as defined in Section 17935, limited liability companies, as defined in Section 17941, limited liability partnerships, as described in Section 17948, charitable organizations, as described in Section 23703, regulated investment companies, as defined in Section 851 of the Internal Revenue Code, real estate investment trusts, as defined in Section 856 of the Internal Revenue Code, real estate mortgage investment conduits, as defined in Section 860D of the Internal Revenue Code, and qualified Subchapter S subsidiaries, as defined in Section 1361(b)(3) of the Internal Revenue Code, to the extent applicable. |
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| 149 | 149 | | |
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| 150 | 150 | | (3) This subdivision shall not apply to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax. |
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| 151 | 151 | | |
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| 152 | 152 | | (g) (1) Notwithstanding subdivision (a), a domestic corporation, as defined in Section 167 of the Corporations Code, that files a certificate of dissolution in the office of the Secretary of State pursuant to subdivision (b) of Section 1905 of the Corporations Code, prior to its amendment by the act amending this subdivision, and that does not thereafter do business shall not be subject to the minimum franchise tax for taxable years beginning on or after the date of that filing. |
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| 153 | 153 | | |
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| 154 | 154 | | (2) For taxable years beginning on and after January 1, 2020, the minimum franchise tax specified in subdivision (a) shall not apply to a corporation doing business in the state or to a corporation that files a certificate of dissolution, as specified in paragraph (1). |
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| 155 | 155 | | |
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| 156 | 156 | | (h) The minimum franchise tax imposed by paragraph (1) of subdivision (d) shall not be increased by the Legislature by more than 10 percent during any calendar year. |
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| 157 | 157 | | |
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| 158 | 158 | | (i)(1)Notwithstanding subdivision (a), for taxable years beginning on or after January 1, 2020, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the minimum franchise tax for any taxable year the owner is deployed and the corporation operates at a loss or ceases operation. |
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| 159 | 159 | | |
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| 160 | 160 | | |
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| 161 | 161 | | |
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| 162 | 162 | | (2)The Franchise Tax Board may promulgate regulations as necessary or appropriate to carry out the purposes of this subdivision, including a definition for ceases operation. |
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| 163 | 163 | | |
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| 164 | 164 | | |
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| 165 | 165 | | |
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| 166 | 166 | | (3)For the purposes of this subdivision, all of the following definitions apply: |
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| 167 | 167 | | |
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| 168 | 168 | | |
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| 169 | 169 | | |
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| 170 | 170 | | (A)Deployed means being called to active duty or active service during a period when a Presidential Executive order specifies that the United States is engaged in combat or homeland defense. Deployed does not include either of the following: |
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| 171 | 171 | | |
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| 172 | 172 | | |
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| 173 | 173 | | |
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| 174 | 174 | | (i)Temporary duty for the sole purpose of training or processing. |
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| 175 | 175 | | |
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| 176 | 176 | | |
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| 177 | 177 | | |
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| 178 | 178 | | (ii)A permanent change of station. |
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| 179 | 179 | | |
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| 180 | 180 | | |
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| 181 | 181 | | |
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| 182 | 182 | | (B)Operates at a loss means negative net income as defined in Section 24341. |
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| 183 | 183 | | |
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| 184 | 184 | | |
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| 185 | 185 | | |
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| 186 | 186 | | (C)Small business means a corporation with total income from all sources derived from, or attributable to, the state of two hundred fifty thousand dollars ($250,000) or less. |
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| 187 | 187 | | |
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| 188 | 188 | | |
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| 189 | 189 | | |
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| 190 | 190 | | (4)This subdivision shall become inoperative for taxable years beginning on or after January 1, 2030. |
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| 191 | 191 | | |
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| 192 | 192 | | |
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| 193 | 193 | | |
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| 194 | 194 | | SEC. 3. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect. |
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| 195 | 195 | | |
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| 196 | 196 | | SEC. 3. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect. |
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| 197 | 197 | | |
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| 198 | 198 | | SEC. 3. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect. |
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| 199 | 199 | | |
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| 200 | 200 | | ### SEC. 3. |
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