Amended in Assembly March 12, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 612


Introduced by Assembly Member Patterson

February 24, 2015


begin deleteAn act to amend Section 23453 of the Revenue and Taxation Code, relating to taxation. end deletebegin insertAn act to amend Sections 17935, 17941, 17948, and 23153 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 612, as amended, Patterson. begin deleteAlternative minimum tax. end deletebegin insertMinimum franchise tax: annual tax: small business.end insert

begin insert

Existing law imposes an annual minimum franchise tax, except as provided, on every corporation incorporated in this state, qualified to transact intrastate business in this state, or doing business in this state. Existing law exempts a corporation that incorporates or qualifies to do business in this state from the payment of the minimum franchise tax in its first taxable year.

end insert
begin insert

Existing law imposes an annual tax in an amount equal to the minimum franchise tax on every limited partnership, limited liability company, and limited liability partnership doing business in this state. In addition, existing law requires every limited partnership that has filed a certificate with the Secretary of State and every foreign limited partnership that has registered with the Secretary of State, every limited liability company if the articles of organization have been accepted by, or a certificate of registration has been issued by, the Secretary of State, and every registered limited liability partnership and every foreign limited liability partnership that has registered with the Secretary of State, to pay an annual tax in an amount equal to the minimum franchise tax.

end insert
begin insert

This bill would reduce that minimum franchise in the 2nd taxable year for a new corporation, and that annual tax in the first taxable year for a new limited partnership, new limited liability partnership, and new limited liability company that is a small business, which is defined as a business entity with gross receipts of $5,000 or less, as specified.

end insert
begin insert

This bill would take effect immediately as a tax levy.

end insert
begin delete

The Corporation Tax Law imposes an alternative minimum tax in substantial conformity to the alternative minimum tax imposed by the federal income tax laws, but provides an exception so that certain credits may reduce the regular tax, as defined, below the tentative minimum tax, as provided.

end delete
begin delete

This bill would make nonsubstantive changes to this provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 17935 of the end insertbegin insertRevenue and Taxation Codeend insert
2begin insert is amended to read:end insert

3

17935.  

(a) For each taxable year beginning on or after January
41, 1997, every limited partnership doing business in thisbegin delete state (asend delete
5begin insert state, asend insert defined by Sectionbegin delete 23101)end deletebegin insert 23101,end insert and required to file a
6return under Section 18633 shall pay annually to this state a tax
7for the privilege of doing business in this state in an amount equal
8to the applicable amount specified inbegin insert paragraph (1) of subdivision
9(d) ofend insert
Section 23153.

10(b) (1) In addition to any limited partnership that is doing
11business in this state and therefore is subject to the tax imposed
12by subdivision (a), for each taxable year beginning on or after
13January 1, 1997, every limited partnership that has executed,
14acknowledged, and filed a certificate of limited partnership with
15the Secretary of State pursuant to Section 15621 or 15902.01 of
16the Corporations Code, and every foreign limited partnership that
17has registered with the Secretary of State pursuant to Section 15692
18or 15909.01 of the Corporations Code, shall pay annually the tax
19prescribed in subdivision (a). The tax shall be paid for each taxable
20year, or part thereof, until a certificate of cancellation is filed on
21behalf of the limited partnership with the office of the Secretary
P3    1of State pursuant to Section 15623, 15696, 15902.03, or 15909.07
2of the Corporations Code.

3(2) If a taxpayer files a return with the Franchise Tax Board that
4is designated its final return, that board shall notify the taxpayer
5that the tax imposed by this chapter is due annually until a
6certificate of cancellation is filed with the Secretary of State
7pursuant to Section 15623, 15696, 15902.03, or 15909.07 of the
8Corporations Code.

9(c) The tax imposed by this chapter shall be due and payable
10on the date the return is required to be filed under former Section
1118432 or 18633.

12(d) For purposes of this section, “limited partnership” means
13any partnership formed by two or more persons under the laws of
14this state or any other jurisdiction and having one or more general
15partners and one or more limited partners.

16(e) Notwithstanding subdivision (b), any limited partnership
17that ceased doing business prior to January 1, 1997, filed a final
18return with the Franchise Tax Board for a taxable year ending
19before January 1, 1997, and filed a certificate of dissolution with
20the Secretary of State pursuant to Section 15623 of the
21Corporations Code prior to January 1, 1997, shall not be subject
22to the tax imposed by this chapter for any period following the
23date the certificate of dissolution was filed with the Secretary of
24State, but only if the limited partnership files a certificate of
25cancellation with the Secretary of State pursuant to Section 15623
26of the Corporations Code. In the case where a notice of proposed
27deficiency assessment of tax or a notice of tax due (whichever is
28applicable) is mailed after January 1, 2001, the first sentence of
29this subdivision shall not apply unless the certificate of cancellation
30is filed with the Secretary of State not later than 60 days after the
31date of the mailing of the notice.

begin insert

32(f) (1) Notwithstanding subdivisions (a) and (b), for taxable
33years beginning on or after January 1, 2016, every new limited
34partnership that is a small business shall pay to the state an annual
35tax of four hundred dollars ($400) for its first taxable year.

end insert
begin insert

36(2) For purposes of this subdivision:

end insert
begin insert

37(A) “Gross receipts, less returns and allowances reportable to
38this state,” means the sum of the gross receipts from the production
39of business income, as defined in subdivision (a) of Section 25120,
P4    1and the gross receipts from the production of nonbusiness income,
2as defined in subdivision (d) of Section 25120.

end insert
begin insert

3(B) “New limited partnership” means a limited partnership that
4on or after January 1, 2016, is organized under the laws of this
5state or has qualified to transact intrastate business in this state
6that begins business operations at or after the time of its
7organization. “New limited partnership” does not include any
8limited partnership that began business operations as, or acquired
9its business operations from, a sole proprietorship, a limited
10liability partnership, or any other form of business entity prior to
11its organization.

end insert
begin insert

12(C) “Small business” means a limited partnership that has gross
13receipts, less returns and allowances, reportable to this state for
14the taxable year of five thousand dollars ($5,000) or less.

end insert
begin insert

15(3) This subdivision shall not apply to a limited partnership that
16does not file a return on the due date of its return, without regard
17to extension, for that year.

end insert
begin insert

18(4) This subdivision shall not apply to any limited partnership
19that reorganizes solely for the purpose of reducing its annual tax.

end insert
20begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 17941 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
21amended to read:end insert

22

17941.  

(a) For each taxable year beginning on or after January
231, 1997, a limited liability company doing business in this state
24(as defined in Section 23101) shall pay annually to this state a tax
25for the privilege of doing business in this state in an amount equal
26to the applicable amount specified inbegin insert paragraph (1) ofend insert subdivision
27(d) of Section 23153 for the taxable year.

28(b) (1) In addition to any limited liability company that is doing
29business in this state and is therefore subject to the tax imposed
30by subdivision (a), for each taxable year beginning on or after
31January 1, 1997, a limited liability company shall pay annually
32the tax prescribed in subdivision (a) if articles of organization have
33been accepted, or a certificate of registration has been issued, by
34the office of the Secretary of State. The tax shall be paid for each
35taxable year, or part thereof, until a certificate of cancellation of
36registration or of articles of organization is filed on behalf of the
37limited liability company with the office of the Secretary of State.

38(2) If a taxpayer files a return with the Franchise Tax Board that
39is designated as its final return, the Franchise Tax Board shall
40notify the taxpayer that the annual tax shall continue to be due
P5    1annually until a certificate of dissolution is filed with the Secretary
2of State pursuant to Section 17707.08 of the Corporations Code
3or a certificate of cancellation is filed with the Secretary of State
4pursuant to Section 17708.06 of the Corporations Code.

5(c) The tax assessed under this section shall be due and payable
6on or before the 15th day of the fourth month of the taxable year.

7(d) For purposes of this section, “limited liability company”
8means an organization, other than a limited liability company that
9is exempt from the tax and fees imposed under this chapter
10pursuant to Section 23701h orbegin delete Sectionend delete 23701x, that is formed by
11one or more persons under the law of this state, any other country,
12or any other state, as a “limited liability company” and that is not
13taxable as a corporation for California tax purposes.

14(e) Notwithstanding anything in this section to the contrary, if
15the office of the Secretary of State files a certificate of cancellation
16pursuant to Section 17707.02 of the Corporations Code for any
17limited liability company, then paragraph (1) of subdivision (f) of
18Section 23153 shall apply to that limited liability company as if
19the limited liability company were properly treated as a corporation
20for that limited purpose only, and paragraph (2) of subdivision (f)
21of Section 23153 shall not apply. Nothing in this subdivision
22entitles a limited liability company to receive a reimbursement for
23any annual taxes or fees already paid.

24(f) (1) Notwithstanding any provision of this section to the
25contrary, a limited liability company that is a small business solely
26owned by a deployed member of the United States Armed Forces
27shall not be subject to the tax imposed under this section for any
28taxable year the owner is deployed and the limited liability
29company operates at a loss or ceases operation.

30(2) The Franchise Tax Board may promulgate regulations as
31necessary or appropriate to carry out the purposes of this
32subdivision, including a definition for “ceases operation.”

33(3) For the purposes of this subdivision, all of the following
34definitions apply:

35(A) “Deployed” means being called to active duty or active
36service during a period when a Presidential Executive order
37specifies that the United States is engaged in combat or homeland
38defense. “Deployed” does not include either of the following:

39(i) Temporary duty for the sole purpose of training or processing.

40(ii) A permanent change of station.

P6    1(B) “Operates at a loss” means a limited liability company’s
2expenses exceed its receipts.

3(C) “Small business” means a limited liability company with
4total income from all sources derived from, or attributable, to the
5state of two hundred fifty thousand dollars ($250,000) or less.

6(4) This subdivision shall become inoperative for taxable years
7beginning on or after January 1, 2018.

begin insert

8(g) (1) Notwithstanding any provision of this section to the
9contrary, for taxable years beginning on or after January 1, 2016,
10every new limited liability company that is a small business shall
11pay to the state an annual tax of four hundred dollars ($400) for
12its first taxable year.

end insert
begin insert

13(2) For purposes of this subdivision:

end insert
begin insert

14(A) “Gross receipts, less returns and allowances reportable to
15this state,” means the sum of the gross receipts from the production
16of business income, as defined in subdivision (a) of Section 25120,
17and the gross receipts from the production of nonbusiness income,
18as defined in subdivision (d) of Section 25120.

end insert
begin insert

19(B) “New limited liability company” means a limited liability
20company that on or after January 1, 2016, is organized under the
21laws of this state or has qualified to transact intrastate business
22in this state that begins business operations at or after the time of
23its organization. “New limited liability company” does not include
24any limited liability company that began business operations as,
25or acquired its business operations from, a sole proprietorship, a
26limited liability company or any other form of business entity prior
27to its organization.

end insert
begin insert

28(C) “Small business” means a limited liability company that
29reasonably estimates that it will have gross receipts, less returns
30and allowances, reportable to this state for the taxable year of five
31thousand dollars ($5,000) or less.

end insert
begin insert

32(3) This subdivision shall not apply to a limited liability company
33that does not file a return on the due date of its return, without
34regard to extension, for that year.

end insert
begin insert

35(4) If the limited liability company’s gross receipts, as
36determined by subparagraph (A) of paragraph (2), are not five
37thousand dollars ($5,000) or less, an additional tax in the amount
38equal to four hundred dollars ($400) for the taxable year shall be
39due and payable by the corporation on the due date of its return,
40without regard to extension, for that year.

end insert
begin insert

P7    1(5) This subdivision shall not apply to any limited liability
2company that reorganizes solely for the purpose of reducing its
3annual tax.

end insert
4begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 17948 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
5amended to read:end insert

6

17948.  

(a) For each taxable year beginning on or after January
71, 1997, every limited liability partnership doing business in this
8state (as defined in Section 23101) and required to file a return
9under Section 18633 shall pay annually to the Franchise Tax Board
10a tax for the privilege of doing business in this state in an amount
11equal to the applicable amount specified in paragraph (1) of
12subdivision (d) of Section 23153 for the taxable year.

13(b) In addition to any limited liability partnership that is doing
14business in this state and therefore is subject to the tax imposed
15by subdivision (a), for each taxable year beginning on or after
16January 1, 1997, every registered limited liability partnership that
17has registered with the Secretary of State pursuant to Section 16953
18of the Corporations Code and every foreign limited liability
19partnership that has registered with the Secretary of State pursuant
20to Section 16959 of the Corporations Code shall pay annually the
21tax prescribed in subdivision (a). The tax shall be paid for each
22taxable year, or part thereof, until any of the following occurs:

23(1) A notice of cessation is filed with the Secretary of State
24pursuant to subdivision (b) of Section 16954 or 16960 of the
25Corporations Code.

26(2) A foreign limited liability partnership withdraws its
27registration pursuant to subdivision (a) of Section 16960 of the
28Corporations Code.

29(3) The registered limited liability partnership or foreign limited
30liability partnership has been dissolved and finally wound up.

31(c) The tax assessed under this section shall be due and payable
32on the date the return is required to be filed under Section 18633.

33(d) If a taxpayer files a return with the Franchise Tax Board that
34is designated as its final return, the Franchise Tax Board shall
35notify the taxpayer that the annual tax shall continue to be due
36annually until a certificate of cancellation is filed with the Secretary
37of State pursuant to Section 16954 or 16960 of the Corporations
38Code.

begin insert

39(e) (1) Notwithstanding subdivisions (a) and (b), for taxable
40years beginning on or after January 1, 2016, a new limited liability
P8    1partnership that is a small business shall pay to the state an annual
2tax of four hundred dollars ($400) for its first taxable year.

end insert
begin insert

3(2) For purposes of this subdivision:

end insert
begin insert

4(A) “Gross receipts, less returns and allowances reportable to
5this state,” means the sum of the gross receipts from the production
6of business income, as defined in subdivision (a) of Section 25120,
7and the gross receipts from the production of nonbusiness income,
8as defined in subdivision (d) of Section 25120.

end insert
begin insert

9(B) “New limited liability partnership” means a limited liability
10partnership that on or after January 1, 2016, is organized under
11the laws of this state or has qualified to transact intrastate business
12in this state that begins business operations at or after the time of
13its organization. “New limited liability partnership” does not
14include any limited liability partnership that began business
15operations as, or acquired its business operations from, a sole
16 proprietorship, a limited liability partnership, or any other form
17of business entity prior to its organization.

end insert
begin insert

18(C) “Small business” means a limited partnership that has gross
19receipts, less returns and allowances, reportable to this state for
20the taxable year of five thousand dollars ($5,000) or less.

end insert
begin insert

21(3) This subdivision shall not apply to a limited liability
22partnership that does not file a return on the due date of its return,
23without regard to extension, for that year.

end insert
begin insert

24(4) This subdivision shall not apply to any limited partnership
25that reorganizes solely for the purpose of reducing its annual tax.

end insert
26begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 23153 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
27amended to read:end insert

28

23153.  

(a) Every corporation described in subdivision (b) shall
29be subject to the minimum franchise tax specified in subdivision
30(d) from the earlier of the date of incorporation, qualification, or
31commencing to do business within this state, until the effective
32date of dissolution or withdrawal as provided in Section 23331 or,
33if later, the date the corporation ceases to do business within the
34limits of this state.

35(b) Unless expressly exempted by this part or the California
36Constitution, subdivision (a) shall apply to each of the following:

37(1) Every corporation that is incorporated under the laws of this
38state.

P9    1(2) Every corporation that is qualified to transact intrastate
2business in this state pursuant to Chapter 21 (commencing with
3Section 2100) of Division 1 of Title 1 of the Corporations Code.

4(3) Every corporation that is doing business in this state.

5(c) The following entities are not subject to the minimum
6franchise tax specified in this section:

7(1) Credit unions.

8(2) Nonprofit cooperative associations organized pursuant to
9Chapter 1 (commencing with Section 54001) of Division 20 of the
10Food and Agricultural Code that have been issued the certificate
11of the board of supervisors prepared pursuant to Section 54042 of
12the Food and Agricultural Code. The association shall be exempt
13from the minimum franchise tax for five consecutive taxable years,
14commencing with the first taxable year for which the certificate
15is issued pursuant to subdivision (b) of Section 54042 of the Food
16and Agricultural Code. This paragraph only applies to nonprofit
17cooperative associations organized on or after January 1, 1994.

18(d) (1) Except as provided in paragraph (2), paragraph (1) of
19subdivision (f) of Section 23151, paragraph (1) of subdivision (f)
20of Section 23181, and paragraph (1) of subdivision (c) of Section
2123183, corporations subject to the minimum franchise tax shall
22pay annually to the state a minimum franchise tax of eight hundred
23dollars ($800).

24(2) The minimum franchise tax shall be twenty-five dollars
25($25) for each of the following:

26(A) A corporation formed under the laws of this state whose
27principal business when formed was gold mining, which is inactive
28and has not done business within the limits of the state since 1950.

29(B) A corporation formed under the laws of this state whose
30principal business when formed was quicksilver mining, which is
31inactive and has not done business within the limits of the state
32since 1971, or has been inactive for a period of 24 consecutive
33months or more.

34(3) For purposes of paragraph (2), a corporation shall not be
35considered to have done business if it engages in business other
36than mining.

37(e) Notwithstanding subdivision (a), for taxable years beginning
38on or after January 1, 1999, and before January 1, 2000, every
39“qualified new corporation” shall pay annually to the state a
40minimum franchise tax of five hundred dollars ($500) for the
P10   1second taxable year. This subdivision shall apply to any corporation
2that is a qualified new corporation and is incorporated on or after
3January 1, 1999, and before January 1, 2000.

4(1) The determination of the gross receipts of a corporation, for
5purposes of this subdivision, shall be made by including the gross
6receipts of each member of the commonly controlled group, as
7defined in Section 25105, of which the corporation is a member.

8(2) “Gross receipts, less returns and allowances reportable to
9this state,” means the sum of the gross receipts from the production
10of business income, as defined in subdivision (a) of Section 25120,
11and the gross receipts from the production of nonbusiness income,
12as defined in subdivision (d) of Section 25120.

13(3) “Qualified new corporation” means a corporation that is
14incorporated under the laws of this state or has qualified to transact
15intrastate business in this state, that begins business operations at
16or after the time of its incorporation and that reasonably estimates
17that it will have gross receipts, less returns and allowances,
18reportable to this state for the taxable year of one million dollars
19($1,000,000) or less. “Qualified new corporation” does not include
20any corporation that began business operations as a sole
21proprietorship, a partnership, or any other form of business entity
22prior to its incorporation. This subdivision shall not apply to any
23corporation that reorganizes solely for the purpose of reducing its
24minimum franchise tax.

25(4) This subdivision shall not apply to limited partnerships, as
26defined in Section 17935, limited liability companies, as defined
27in Section 17941, limited liability partnerships, as described in
28Section 17948, charitable organizations, as described in Section
2923703, regulated investment companies, as defined in Section 851
30of the Internal Revenue Code, real estate investment trusts, as
31 defined in Section 856 of the Internal Revenue Code, real estate
32mortgage investment conduits, as defined in Section 860D of the
33Internal Revenue Code, qualified Subchapter S subsidiaries, as
34defined in Section 1361(b)(3) of the Internal Revenue Code, or to
35the formation of any subsidiary corporation, to the extent
36applicable.

37(5) For any taxable year beginning on or after January 1, 1999,
38and before January 1, 2000, if a corporation has qualified to pay
39five hundred dollars ($500) for the second taxable year under this
40subdivision, but in its second taxable year, the corporation’s gross
P11   1receipts, as determined under paragraphs (1) and (2), exceed one
2million dollars ($1,000,000), an additional tax in the amount equal
3to three hundred dollars ($300) for the second taxable year shall
4be due and payable by the corporation on the due date of its return,
5without regard to extension, for that year.

6(f) (1) begin insert(A)end insertbegin insertend insert Notwithstanding subdivision (a), every corporation
7that incorporates or qualifies to do business in this state on or after
8January 1, 2000, shall not be subject to the minimum franchise tax
9for its first taxable year.

begin insert

10(B) Notwithstanding subdivision (a), every corporation that is
11a new corporation in taxable years beginning on or after January
121, 2016, and is a small business in its second taxable year shall
13pay to the state a minimum franchise tax of four hundred dollars
14($400) for its second taxable year.

end insert
begin insert

15(i) For purposes of this subparagraph:

end insert
begin insert

16(I) “Gross receipts, less returns and allowances reportable to
17this state,” means the sum of the gross receipts from the production
18of business income, as defined in subdivision (a) of Section 25120,
19and the gross receipts from the production of nonbusiness income,
20as defined in subdivision (d) of Section 25120.

end insert
begin insert

21(II) “New corporation” means a corporation that on or after
22January 1, 2016, is incorporated under the laws of this state or
23has qualified to transact intrastate business in this state that begins
24business operations at or after the time of its incorporation. “New
25corporation” does not include any corporation that began business
26operations as, or acquired its business operations from, a sole
27proprietorship, a corporation or any other form of business entity
28prior to its incorporation.

end insert
begin insert

29(III) “Small business” means a corporation that reasonably
30estimates that it will have gross receipts, less returns and
31allowances, reportable to this state for the taxable year of five
32thousand dollars ($5,000) or less.

end insert
begin insert

33(ii) (I) This subparagraph shall not apply to a corporation that
34does not file a return on the due date of its return, without regard
35to extension, for that year.

end insert
begin insert

36(II) If the corporation’s gross receipts, as determined by
37subclause (I) of clause (i) of subparagraph (B), are not five
38thousand dollars ($5,000) or less, an additional tax in the amount
39equal to four hundred dollars ($400) for the taxable year shall be
P12   1due and payable on the due date of its return, without regard to
2extension, for that year.

end insert

3(2) This subdivision shall not apply to limited partnerships, as
4defined in Section 17935, limited liability companies, as defined
5in Section 17941, limited liability partnerships, as described in
6Section 17948, charitablebegin delete organizationsend deletebegin insert corporationsend insert, as described
7in Section 23703, regulated investment companies, as defined in
8Section 851 of the Internal Revenue Code, real estate investment
9trusts, as defined in Section 856 of the Internal Revenue Code,
10real estate mortgage investment conduits, as defined in Section
11860D of the Internal Revenue Code, and qualified Subchapter S
12subsidiaries, as defined in Section 1361(b)(3) of the Internal
13Revenue Code, to the extent applicable.

14(3) This subdivision shall not apply to any corporation that
15reorganizes solely for the purpose of avoiding payment of its
16minimum franchise tax.

17(g) Notwithstanding subdivision (a), a domestic corporation, as
18defined in Section 167 of the Corporations Code, that files a
19certificate of dissolution in the office of the Secretary of State
20pursuant to subdivision (b) of Section 1905 of the Corporations
21Code, prior to its amendment by the act amending this subdivision,
22and that does not thereafter do business shall not be subject to the
23minimum franchise tax for taxable years beginning on or after the
24date of that filing.

25(h) The minimum franchise tax imposed by paragraph (1) of
26subdivision (d) shall not be increased by the Legislature by more
27than 10 percent during any calendar year.

28(i) (1) Notwithstanding subdivision (a), a corporation that is a
29small business solely owned by a deployed member of the United
30States Armed Forces shall not be subject to the minimum franchise
31tax for any taxable year the owner is deployed and the corporation
32operates at a loss or ceases operation.

33(2) The Franchise Tax Board may promulgate regulations as
34necessary or appropriate to carry out the purposes of this
35subdivision, including a definition for “ceases operation.”

36(3) For the purposes of this subdivision, all of the following
37definitions apply:

38(A) “Deployed” means being called to active duty or active
39service during a period when a Presidential Executive order
P13   1specifies that the United States is engaged in combat or homeland
2defense. “Deployed” does not include either of the following:

3(i) Temporary duty for the sole purpose of training or processing.

4(ii) A permanent change of station.

5(B) “Operates at a loss” means negative net income as defined
6in Section 24341.

7(C) “Small business” means a corporation with total income
8from all sources derived from, or attributable, to the state of two
9hundred fifty thousand dollars ($250,000) or less.

10(4) This subdivision shall become inoperative for taxable years
11beginning on or after January 1, 2018.

12begin insert

begin insertSEC. 5.end insert  

end insert
begin insert

This act provides for a tax levy within the meaning of
13Article IV of the Constitution and shall go into immediate effect.

end insert
begin delete
14

SECTION 1.  

Section 23453 of the Revenue and Taxation Code
15 is amended to read:

16

23453.  

(a) There shall be allowed as a credit against the regular
17tax, as defined by subdivision (c) of Section 23455, for any taxable
18year, an amount equal to the minimum tax credit for that taxable
19year.

20(b) For purposes of subdivision (a), the minimum tax credit
21shall be determined in accordance with Section 53 of the Internal
22Revenue Code, relating to credit for the prior year minimum tax
23liability, except as otherwise provided in this part.

24(c) For purposes of this chapter, the amount determined under
25Section 53(c)(1) of the Internal Revenue Code shall be the regular
26tax, as defined by subdivision (c) of Section 23455, reduced by
27the sum of the credits allowable under this part other than any
28credit which reduces the tax below the tentative minimum tax, as
29defined by Section 23455.

end delete


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